Departure Guarantee Insurance for E-9 and H-2 Workers

Departure guarantee insurance is one of the most misdescribed things in Korean employment. It is called the foreigners’ severance, treated as a pension, and assumed to settle the account on the way out.

It is none of those. It is an insurance policy an employer takes out under the Employment Permit System, and its relationship to your statutory severance is arithmetic — not identity.

Two claims, two counterparties, two timetables.

Who is actually in the scheme

Departure guarantee insurance sits under the Act on the Employment of Foreign Workers, which means the Employment Permit System — principally E-9 and H-2.

If you are outside it, nothing has gone missing. Your entitlement runs through the ordinary route — statutory severance, or your workplace’s DB or DC plan — which is set out in Korean severance pay: what you are actually owed.

The accrual, and why the number comes out different

The employer accrues monthly at 8.3% of your monthly ordinary wage. A payout event can arise where you have been employed a year or more and depart, or on certain changes of status.

Statutory severance is not computed that way. It uses average wage — total wages over the final three months divided by the calendar days in that period, with regular bonuses entering as three twelfths of the prior twelve months. The severance calculator works on that basis, which is the one that decides whether the insurance covers what you are owed.

Two bases, two answers. Nothing has gone wrong when they differ — but something goes wrong when nobody compares them.

The shortfall is the whole point

statutory severance        ₩10,000,000
departure insurance payout  ₩8,700,000
                            ──────────
employer still owes          ₩1,300,000

Ask for the accrued amount before your last day, not after. Once you have the statutory calculation and the policy figure side by side, the shortfall is a number rather than an argument.

Claiming: before departure is the easy version

You can claim before you leave and confirm the amount while you are still in the country. Operating routes include remittance to an overseas account and payment at the airport after immigration.

If you have already flown without claiming, a claim can still be made after departure through the prescribed procedure. What becomes genuinely hard from abroad is the other half — pursuing an employer for the shortfall.

The two timetables do not line up

Statutory retirement benefits are payable within 14 days of the entitlement arising, extendable by agreement. The insurance claim runs on its own process, with its own timing and its own payer.

Fourteen days can also outlast your flight. If you leave a week after your last working day, the statutory deadline expires while you are already home — which is a reason to fix the destination account and the shortfall before you go.

Before your last day

• the accrued departure insurance amount, in writing
• your statutory severance calculation, done properly on average wage
• the difference between them, raised with the employer while you are here
• an overseas account that can receive both
• the employer’s loss-of-coverage and departure filings, confirmed done

The rest of the exit — the tax return that can fall due the day before you fly, and the national pension lump-sum refund, which is a different scheme again with its own country conditions — is in leaving Korea: tax, pension and refunds.

For a shortfall an employer will not pay, the Ministry of Employment and Labor’s counselling line is 1350, and it is far easier to use from inside Korea than from outside it.