02 notes on paying social insurance to the occupational accident and disease benefit fund in accordance with Vietnam’s regulations that employees should know

1. Subjects eligible to contribution to the occupational accident and disease benefit fund

According to Article 4 of the Decree No. 58/2020/NĐ-CP of Vietnam’s Government (effective from July 15, 2020), the following subjects shall be paid social insurance contributions to the occupational accident and disease benefit fund by their employers, including:

- Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts or contracts for given jobs with a term of between full 3 months and under 12 months, including also labor contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law;

- Persons working under labor contracts with a term of between full 1 month and under 3 months;

- Cadres, civil servants and public employees;

- Defense workers, public security workers and persons doing other jobs in cipher organizations;

- 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;

- Salaried managers of enterprises and cooperatives;

- Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licenses granted by competent Vietnamese agencies shall be covered by compulsory social insurance under the Government’s regulations;

- 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;

- Employees working in enterprises, cooperatives, sole proprietary business households or cooperative alliances operating in such fields as agriculture, forestry, fishery or salt production, receiving piecework or lump-sum pay.

Note: Domestic workers shall not be paid social insurance contributions to the occupational accident and disease benefit fund.

2. Rates of contribution to the occupational accident and disease benefit fund

For employees subject to (1), (2), (3), (4), (5), (6), (7):

According to Article 4 of the Decree No. 58/2020/NĐ-CP of Vietnam’s Government, based on the statutory base payroll, the employer shall pay monthly social insurance contributions for the benefit of their insured employees subject to (1), (2), (3), (4), (5), (6), (7) as follows:

Rate 1: Normal contribution rate shall be equal to 0.5% of the statutory base payroll (similar to provision of Article 3 of Decree No. 44/2017/NĐ-CP of Vietnam’s Government, expired from July 15, 2020).

Note: Applicable to employees who are public officials, civil servants or public employees, and members of the armed forces under the control of authorities of the Party and State, socio-political organizations, military, public security forces or public service units funded by the state budget.

Rate 2: The contribution rate equaling 0.3% of the statutory base payroll (completely new provision) shall be applicable to enterprises that satisfy the 03 following conditions:

- Within three years prior to the submission date, they have not been subject to any administrative monetary fine or any criminal prosecution for their violation against laws on occupational safety, hygiene and social insurance;

- They have submitted periodic reports on workplace accidents, occupational safety and hygiene in an accurate, sufficient and timely manner within three consecutive years prior to the submission year;

- Frequency rate of occupational accidents in the year preceding the submission year must drop by at least 15% of the average frequency of workplace accidents in 3 consecutive years prior to the submission year, or have not had any occupational accident 3 years preceding the submission year.

For employees subject to (9):

According to Article 4 of the Decree No. 58/2020/NĐ-CP of Vietnam’s Government, enterprises, cooperatives, sole proprietary business households or cooperative alliances operating in such fields as agriculture, forestry, fishery or salt production, if they receive piecework or lump-sum pay, the monthly contribution rate shall be bound to corresponding requirements imposed for employees subject to (9).

Note: Contributions shall be made on a monthly, quarterly or biannual basis.

For employees subject to (8):
According to Article 4 of the Decree No. 58/2020/NĐ-CP of Vietnam’s Government, employers shall make monthly contributions to the occupational accident and disease benefit fund at the rate equaling 0.5% of the base pay rate for the benefit of employees subject to (8) (similar to provision of Article 3 of Decree No. 44/2017/NĐ-CP of Vietnam’s Government, expired from July 15, 2020).

Thus, from July 15, 2020, the employer, if eligible, will be entitled to a lower rate of contributions to the occupational accident and disease benefit fund than the normal rate according to Decree No. 58/2020/NĐ-CP of Vietnam’s Government. This is considered one of the solutions of the State to support businesses, promote production and business, especially in the period when the economy is facing many difficulties.

Le Vy

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