October 15, 2018 the Government of Vietnam issued Decree No. 143/2018/ND-CP detailing the Law on Social Insurance and the Law on Occupational Safety and Hygiene regarding compulsory Social Insurance for employees working in Vietnam who are foreign nationals. Below are 7 notable points highlighted by EFY Vietnam.
Article table of contents
Decree No. 143/2018/ND-CP has detailed and specific regulations on the rights and obligations of foreign workers, ensuring the benefits for foreign workers in Vietnam.
1. Participants:
From December 1, 2018, employees who are foreign nationals working in Vietnam are subject to mandatory social insurance participation if: They hold a work permit or a practice certificate or a practice license issued by a competent authority in Vietnam and have an indefinite-term labor contract, or a definite-term labor contract of at least 1 year with employers in Vietnam.
2. Non-participants in Social Insurance:
Foreign employees who move within an enterprise as regulated in Clause 1, Article 3 of Decree No. 11/2016/ND-CP are not subject to mandatory social insurance participation.
3. Contribution Rate and Monthly Wage for Contribution:
Employers specified in Clause 3, Article 2 of this Decree must contribute monthly based on the social insurance-covered monthly wage of employees as follows:
+ Sickness and maternity fund (3%)
+ Labor accident and occupational disease insurance fund (0.5%)
+ From January 1, 2022, retirement and survivorship fund (14%).
Employees contribute 8% of the monthly wage to the retirement and survivorship fund from January 1, 2022.
The monthly wage for social insurance contribution is regulated as the salary, salary allowance, and other additional amounts according to the labor laws. If the monthly wage is higher than 20 times the statutory pay rate, the monthly wage for social insurance contribution is capped at 20 times the statutory pay rate.
4. Multiple Employers:
Employees who enter into labor contracts with multiple employers and are subject to mandatory social insurance participation must contribute social insurance with the first labor contract. However, for labor accident and occupational disease insurance, each employer must contribute for the respective labor contracts.
5. Social Insurance Policies:
Foreign employees subject to social insurance participation will implement the mandatory social insurance policies including:
+ Sickness;
+ Maternity;
+ Labor accidents, occupational diseases;
+ Retirement and survivorship.
6. Lump-Sum Social Insurance Benefit:
Employees are entitled to a lump-sum social insurance benefit without any conditions after 1 year of non-participation in social insurance from the termination date of the labor contract.
7. Foreign Employees Receiving Monthly Pension:
Individuals receiving monthly pensions or social insurance benefits who no longer reside in Vietnam can authorize others to receive the pension or social insurance benefits on their behalf. Employees can enjoy a lump-sum allowance if they wish.
Source: Electronic Social Insurance
