The draft Law on Social Insurance of Vietnam adds specific provisions on acts of evasion of payment of Vietnamese social insurance contributions. If approved, these provisions will be applied in practice, serving as a legal basis to sue the violating party for evading social insurance contributions.
By the end of January 2023, Vietnam Social Security VSS reported that currently, the total amount of late payment of social insurance by Vietnamese enterprises has reached VND 25,940 billion, an increase of nearly 3,900 billion compared to the same period last year.
In early February, the Vietnam General Confederation of Labor asked the Government to soon report to the Politburo and submit to the National Assembly a solution to more than 206,000 workers whose insurance benefits were suspended due to the enterprises' fault, because of their action of evasion of payment of social insurance, fail to fulfill their responsibilities towards employees.
More than 200,000 of these employees belong to nearly 30,000 enterprises that have disappeared, gone bankrupt, dissolved, foreign owners have fled, have arrears for many years with a social insurance debt of about VND 3,500 billion (until September 2022) and most of them are irrevocable.
In 2022, Vietnam has about 17.5 million people paying social insurance, accounting for 38% of the labor force in the working age, an increase of more than 950,000 people compared to 2021. In which, 16 million people pay compulsory social insurance and nearly 1.5 million people participate in voluntary social insurance.
Acts of evasion of social insurance payment under the Draft Law on Vietnam Social Insurance 2023
Article 43 of the Draft Law on Social Insurance of Vietnam 2023 promulgates three new regulations on acts of evading compulsory social insurance contributions, including:
- Employers who do not register to participate in compulsory social insurance or register for participation in compulsory social insurance after the time limit specified in Clause 1, Article 34 of the Draft Law, i.e. 05 working days from the date of signing of the labor contract.
- Employers have registered to participate in compulsory social insurance for employees but by the time limit specified in Clause 6, Article 40 of the Draft Law, have not yet paid or have not paid enough compulsory social insurance amount according to regulations (For the common monthly payment method, the payment deadline is the 10th day of the following month).
- Employers register and pay compulsory social insurance which is lower than the salary as the basis for paying compulsory social insurance according to regulations.
In which, there are other methods of social insurance contributions than the monthly payment method, if the employer chooses to pay every three months, the deadline is the last day of the payment cycle; if the employer chooses to pay every six months, the deadline is the last day of the 4th month; if the employer chooses to pay every 12 months, the deadline is the last day of the 7th month.
According to the Draft Law, if the employer is determined to have committed the act of evasion of social insurance contributions, in addition to having to pay the full amount of evaded payment, he/she shall be administratively sanctioned as prescribed by law and also be subject to additional fines, an amount of 0.03% of the evaded payment for each day of payment evasion.
Thereby, if late payment is more than 1 month, the fine will be approximately 1% of the amount to be paid. If payment is delayed for 1 year, the fine will be approximately 12% of the amount to be paid.
In addition to administrative sanctions, the competent authority may also issue a decision to stop using invoices for employers who have evaded social insurance contributions for 6 months or more; delaying exit in case the employer has evaded payment for 12 months or more to prevent the situation of debt running abroad.
If all the above measures are not effective, the union and the Social Insurance agency will sue the employer in court. When there are signs of crime of evading social insurance contributions under the provisions of the Penal Code, the Social Insurance agency will propose to prosecute.
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