Poster for the Introduction of the Social Insurance Premium Settlement System in Forestry Projects. Provided by the Korea Forest Service
[Asia Economy (Daejeon) Reporter Jeong Il-woong] A post-settlement system for social insurance premiums will be introduced and applied to forestry projects.
The Korea Forest Service announced on the 25th that it will amend and enforce the "Act on the Creation and Management of Forest Resources" to introduce the post-settlement system. According to the amendment, forestry projects will be subject to the post-settlement system starting from the 27th of this month.
The post-settlement system allows construction companies to first pay social insurance premiums (health and pension), then submit the payment receipts to the ordering agency, and receive final settlement within the range of the insurance premiums accounted for in the estimated price upon completion of the construction.
Until now, all forestry projects have reflected the National Health and Pension insurance premiums in the construction costs. However, since forestry projects were not included in the post-settlement target projects according to the National Health Insurance Corporation's operational guidelines (Health Insurance Practical Guide for Construction Sites), post-settlement was not possible.
As a result, on-site forestry cooperatives and other contractors executing forestry projects avoided enrolling daily workers in insurance, causing a side effect where workers were not effectively guaranteed social insurance benefits.
Due to the lack of post-settlement reflection, contractors had to return the full insurance premiums to the ordering party or only partially settle, effectively bearing the insurance premiums themselves, which led to reluctance to enroll workers in social insurance.
Moreover, during the National Health Insurance Corporation's on-site inspections conducted every three years, if it was found that health and pension insurance were not subscribed to (at the workplace), penalties such as retroactive insurance premium collection for three years and fines were imposed, increasing the burden on business owners, according to the Korea Forest Service.
Poster for the Introduction of the Social Insurance Premium Settlement System for Forestry Projects. Provided by the Korea Forest Service
However, with the amendment of the related law including forestry projects as post-settlement target projects, these issues are expected to be mostly resolved.
Daily workers engaged in forestry projects will be able to enroll in social insurance stably, and the insurance premiums previously borne by business owners and workers will be reimbursed by the ordering party, significantly improving on-site working conditions.
The Korea Forest Service estimates that a total of 3,852 companies and about 60,000 workers will benefit from the post-settlement system. The benefits they will receive are expected to amount to approximately 17.6 billion KRW.
Imira, Director of the Forest Industry Policy Bureau at the Korea Forest Service, said, "With the introduction of the post-settlement system, we can expect both improvements in working conditions and alleviation of economic burdens for forestry project workers," adding, "The Korea Forest Service will continue to gather diverse opinions from stakeholders in the forest industry and focus on improving unreasonable systems through proactive administration."
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