07:38 | 06/12/2022

Vietnam: If the employers fail to pay compulsory social insurance for employees within 2 months of the probationary period, is it compulsory for them to increase the salary of employees?

Is it compulsory for Vietnamese employers to pay compulsory social insurance for employees within 2 months of the probationary period? If the employers fail to do so, is it compulsory for them to increase the salary of employees? - asked Tram (Lam Dong, Vietnam)

What are the obligations of Vietnamese employees in participation in social insurance?

According to the provisions of Clause 2, Article 5 of the Labor Code 2019, the obligations of an employee are determined as follows:

Rights and obligations of employees
...
2. An employee has the obligations to:
a) implement the employment contract, collective bargaining agreement and other lawful agreements;
c) obey internal labor regulations, the lawful management, administration and supervision by the employer;
c) implement regulations of laws on labor, employments, vocational education, social insurance, health insurance, unemployment insurance, occupational safety and health.

At the same time, Article 168 of the Labor Code 2019 provides for participation in social insurance as follows:

Participation in social insurance, health insurance and unemployment insurance
1. Employers and employees shall participate in compulsory social insurance, compulsory health insurance and unemployment insurance and enjoy the benefits in accordance with provisions of the law on social insurance, health insurance and unemployment insurance.
Employers and employees are encouraged to obtain other kinds of insurance for employees.
2. The employer shall not be required to pay salary for an employee when the employee is on leave and receiving social insurance benefits, unless otherwise agreed by both parties.
3. Where an employee is not covered by compulsory social insurance, compulsory health insurance or unemployment insurance, the employer shall, in addition to and at the same time with salary payment, pay the employee an amount equal to the compulsory social insurance, compulsory health insurance, unemployment insurance premiums payable by the employer in accordance with regulations of law on social insurance, health insurance and unemployment insurance.

Accordingly, employees are responsible for participating in compulsory social insurance.

Regarding the payment rate, based on Clause 1, Article 5 of the Process promulgated together with Decision 595/QD-BHXH in 2015, the employee shall pay 8% of the monthly salary to the retirement and survivorship fund every month.

Thus, according to the above regulations, employees are responsible for deducting 8% of their monthly salary to pay social insurance premiums. Employers will be responsible for paying social insurance premiums for employees.

Vietnam: If the employers fail to pay compulsory social insurance for employees within 2 months of the probationary period, is it compulsory for them to increase the salary of employees?

Is it compulsory for Vietnamese employers to pay compulsory social insurance for employees within 2 months of the probationary period?

Based on the content specified in Clause 1, Article 2 of the Law on Social Insurance 2014, the subjects participating in compulsory social insurance are determined as follows:

Subjects of application
1. Employees being Vietnamese citizens shall be covered by compulsory social insurance, including:
a/ Persons working under indefinite-term employment contracts, definite-term employment contracts, seasonal employment contracts or contracts for given jobs with a term of between full 3 months and under 12 months, including also employment contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law;
b/ Persons working under employment contracts with a term of between full 1 month and under 3 months;
c/ Cadres, civil servants and public employees;
d/ Defense workers, public security workers and persons doing other jobs in cipher organizations;
dd/ Officers and professional army men of the people's army; officers and professional non-commissioned officers and officers and technical non- commissioned officers of the people's public security; and persons engaged in cipher work and enjoying salaries like army men;
e/ Non-commissioned officers and soldiers of the people’s army; non- commissioned officers and soldiers on definite-term service in the people’s public security; army, public security and cipher cadets who are entitled to cost- of-living allowance;
g/ Vietnamese guest workers defined in the Law on Vietnamese Guest Workers;
h/ Salaried managers of enterprises and cooperatives;
i/ Part-time staffs in communes, wards and townships.

According to the above regulations, the first factor for employees to participate in compulsory social insurance is the conclusion of an employment contract between the employee and the employer.

Therefore, a 2-month probationary period under a probationary contract is not subject to compulsory social insurance participation. However, if the probationer is under an employment contract (with probationary content), he/she will have to participate in compulsory social insurance.

Shall Vietnamese employees receive extra payment in case the employers fail to pay the compulsory social insurance?

In this regard, Clause 3, Article 168 of the Labor Code 2019 provides as follows:

Participation in social insurance, health insurance and unemployment insurance
...
3. Where an employee is not covered by compulsory social insurance, compulsory health insurance or unemployment insurance, the employer shall, in addition to and at the same time with salary payment, pay the employee an amount equal to the compulsory social insurance, compulsory health insurance, unemployment insurance premiums payable by the employer in accordance with regulations of law on social insurance, health insurance and unemployment insurance.

Thus, if the probationary period is not subject to compulsory social insurance payment, when receiving the salary, they will receive an additional amount equal to the level of the employer paying compulsory social insurance for employees according to regulations. provisions of the law on social insurance.

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