What are penalties for shirking social insurance premiums in Vietnam?

What are penalties for shirking social insurance premiums in Vietnam?

1. Shirking social insurance preniums is a prohibited act in Vietnam

Prohibited acts include:

- Shirking the payment of compulsory social insurance or unemployment insurance premiums.

- Delaying the payment of social insurance or unemployment insurance premiums.

- Appropriating social insurance or unemployment insurance premiums or allowances.

- Falsifying or forging dossiers in the implementation of social insurance or unemployment insurance.

- Illegally using the social insurance fund or unemployment insurance fund.

- Causing obstacles or troubles to, or harming the lawful and legitimate rights and interests of, employees or employers.

- Illegally accessing or exploiting the database on social insurance or unemployment insurance.

- Making untruthful reports or providing inaccurate information or data on social insurance or unemployment insurance.

As mentioned above, the act of shirking social insurance contributions is strictly prohibited by law.

(Clause 1, Article 17 of the Law on Social Insurance 2014).

2. What are penalties for shirking social insurance preniums in Vietnam?

2.1 Administrative penalties

A fine ranging from VND 50.00.000 to VND 75.000.000 shall be imposed upon an employee for shirking the payment of compulsory social insurance and unemployment insurance premiums

In addition, in Clause 10, Article 39 of Decree 12/2022/ND-CP stipulates remedial measures as follows:

- The employer that commits any of the violations is compelled to pay total amount of compulsory social insurance and unemployment insurance premiums payable to social insurance authorities;

- The employer that commits any of the violations is compelled to pay an amount of interest charged on insurance premiums accrued due to late payment, non-payment, evasion of payment or appropriation of payments, which is calculated by using the interest rate that is 02 times higher than the average interest rate of investment made by the social insurance fund in the previous year.

If not doing so, at the request of competent persons, banks, other credit institutions or state treasuries shall withdraw money from the violating employer’s deposit accounts to transfer deferred amounts or outstanding amounts of insurance premiums plus the interest on such amounts, which is calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to the account of the relevant social insurance authority.

Thus, individuals who commit acts of shirking payments of social insurance premiums will be fined from VND 50 million to VND 75 million. In addition, the shirked payment amount and interest must also be repaid.

*Note: For organizations, the fine will be 2 times that of individuals, according to Clause 1, Article 5 of Decree 12/2022/ND-CP.

(Article 39, Decree 12/2022/ND-CP)

2.2. Criminal charges

The criminal prosecution for evasion of payment of social insurance, health insurance, and unemployment insurance for employees is as follows:

(1) 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.

(2) This offence 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 offence 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 fails to pay insurance for 50 - 199 workers;

- The offenders collects or deducts insurance contribution from the workers as prescribed in Point a or Point b Clause 1 of this Article but fails to pay insurance.

(3) This offence 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 collects or deducts insurance contribution from the workers as prescribed in Point b or Point c Clause 2 of this Article but fails to pay insurance.

Thus, the violation of social insurance payment evasion can also be prosecuted for criminal responsibility for up to 07 years in prison. In addition, they are also banned from holding certain posts and practicing certain practices for up to five years.

(Article 216, Criminal Code 2015).

3. Interest payable by businesses that fail to pay social insurance contributions in Vietnam

In the event of shirking payment, late payment, misappropriation of payment or enjoyment of social insurance and unemployment insurance benefits for 30 days or more, the interest to be collected is equal to 2 times the average investment interest rate of the social insurance and unemployment insurance funds for the year. The previous one is calculated on the amount and time of late payment.

The interest rate for late payment of social insurance in Ho Chi Minh City is 0.7%/month.

(Clause 3, Article 6 of Decision 60/2015/QD-TTg; Notice 230/TB-BHXH).

Ngoc Nhi

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