In the Vietnamese social insurance system, ensuring the issuance of social insurance books to employees is a crucial responsibility often underestimated by businesses. Failure to fulfill this responsibility can lead to legal penalties under social insurance laws, jeopardizing the rights of employees and significantly impacting their livelihoods.
According to Article 18(2) and Article 19(3) of the 2014 Social Insurance Law, employees are entitled to possess and safeguard their own social insurance books. However, in reality, due to the risks of loss, damage, and inadequate protection, employees often delegate this responsibility to their employers.
To avoid complex situations such as the need for reissuing social insurance books, many Vietnamese businesses agree to hold these documents on behalf of their employees. This practice has become customary and is widely accepted, to the extent that many employees, even after several years of service, have limited contact with their social insurance books.
This arrangement is mutually beneficial; however, complications arise when employees terminate their labor contracts. Regardless of who holds the social insurance book, upon contract termination, the book must be handed over to the employee for the finalization of social insurance procedures. This includes discontinuing insurance payments jointly made by the business and the employee at that particular workplace.
Based on Article 48(3) of the 2019 Labor Code and Article 21(5) of the 2014 Social Insurance Law, upon terminating a labor contract, the employer is responsible for completing the procedures to confirm the period of social insurance contributions and unemployment insurance and returning these documents to the departing employee.
Although the law mandates businesses to finalize and return social insurance books to employees, there is no specific provision regarding the deadline within which companies must complete this process. This legal loophole is exploited by businesses, leading to undue pressure on employees, especially in situations where labor contracts end amid disputes.
Due to these unlawful and unreasonable practices, such as delaying book finalization until the entire company-wide process is completed or facing challenges in coordinating the process with state social insurance agencies, businesses often attempt to prolong the deadline despite it being their obligatory responsibility.
The lack of access to their social insurance books significantly affects the rights of employees, preventing them from officially working for other entities or qualifying for social insurance benefits, such as unemployment benefits. According to Article 46(1) of the 2013 Law on Employment, within three months from the contract termination date, employees without direct employment must submit a complete set of documents to request unemployment benefits at the job placement center where they intend to receive the support.
Therefore, if businesses fail to return social insurance books to employees within the three-month period, the employees lose eligibility for unemployment benefits. They must wait until they are re-employed, leave their job again, and then receive the social insurance book to be eligible to apply for unemployment benefits.
Penalties for Businesses Holding Social Insurance Books
According to Article 12(2) of Decree No. 12/2022/ND-CP, employers who fail to complete the procedures for confirming the period of social insurance contributions and return these documents along with other essential papers held from the employee upon contract termination will face fines ranging from 1 to 15 million VND, depending on the number of employees violating these regulations.
Furthermore, employers are obliged to finalize the procedures to confirm and return the documents to the respective employees.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
