FOUR BIG CHANGES REGARDING THE COMPULSORY SOCIAL INSURANCE POLICY FROM JANUARY 1st, 2018

I. LEGAL BASIS

 II. THE CHANGES OF COMPULSORY INSURANCE POLICY

1. Two subjects are required to participate in compulsory social insurance:

From January 1^st, 2018, besides the subjects must  participate in compulsory social insurance by the current regulations, the following two subjects must also participate, specifically:

– Persons working under labor contracts is a team ranging from one month to less than three months;

– Employee means foreign nationals working in Vietnam have a work permit or a practicing certificate or a practicing certificate granted by a competent Vietnamese authority to participate in compulsory social insurance in accordance with the regulations of the Government.

2. Supplementation of other incomes are required to calculate compulsory social insurance:

a. Currently: Monthly salary for paying of compulsory social insurance = Salary + Salary allowance.

b. From January 1^st, 2018:

Monthly salary for paying of compulsory social insurance = Salary + Salary allowance + Additional amounts.

In which: The addition amounts must determine a specific amount of money together with the salary agreed in the labor contract, and it must regularly pay in each payment period.

3. To fine up to 07 years of imprisonment as for the employer who fails to pay the social insurance to the employee:

With the aim of limiting the state of arrears and evade compulsory social insurance for employees, the Criminal Code 2015 has supplemented the crime related to the acts above, specifically as follows:

a. A person who is responsible for paying social insurance, health insurance and unemployment insurance for his/her workers but fails to pay or pays insufficiently for 06 months or more in any of the following circumstances despite the fact that he/she has incurred an administrative penalty for the same offence shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 01 year’s community sentence or 03 – 12 months’ imprisonment:

• The amount of insurance contribution evaded is from VND 50,000,000 to under VND 300,000,000;
• The offenders evades paying pay insurance for 10 – 49 workers.

b. This offense committed in any of the following circumstances carries a fine of from VND 200,000,000 to VND 500,000,000 or a penalty of 06 – 36 months’ imprisonment:

• The offense has been committed more than once;
• The amount of insurance contribution evaded is from VND 300,000,000 to under VND 1,000,000,000;
• The offenders fail to pay insurance for 50 – 199 workers;
• The offenders collect or deducts insurance contribution from the workers as prescribed in Point a or Point b Clause 1 of this Article but fail to pay insurance.

c. This offense committed in any of the following circumstances carries a fine of from VND 500,000,000 to VND 1,000,000,000 or a penalty of 02 – 07 years’ imprisonment:

• The amount of insurance contribution evaded is ≥ VND 1,000,000,000;
• The offender fails to pay insurance for ≥ 200 workers;
• The offenders collect or deducts insurance contribution from the workers as prescribed in Point b or Point c Clause 2, Article 216 of Criminal Code 2015 but fail to pay insurance.

In conclusion, from January 1^st, 2018, the date of the criminal code 2015 takes effect, those who are obliged not to pay social insurance for employees will be punished by imprisonment for up to 07 years.

4. Increase the number of years to pay social insurance to get the maximum levels of social insurance allowances:

According to the provisions of the Law on Social Insurance 2014, the maximum levels of social insurance allowances is 75% of the monthly salary for social insurance contribution.

The comparison of regulations on the number of years the employees must pay social insurance to get the maximum levels of social insurance allowances: