Vietnam: Are employers subject to penalties for late reporting of increases or decreases in total employees?

Vietnam: Are employers subject to penalties for late reporting of increases or decreases in total employees? (Illustrative Image)

Pursuant to the provisions stipulated in Article 98 of the Law on Social Insurance 2014, employers must notify the social insurance agency in writing when there is a change in the information on social insurance participation. Additionally, point a, clause 1 of Article 99 of the Law on Social Insurance 2014 stipulates that within 30 days from the date of concluding a labor contract, working contract, or recruitment, the employer must submit the initial social insurance registration dossier to the social insurance agency.

In addition, clause 3 of Article 10, Official Dispatch 1734/BHXH-QLT in 2017 stipulates that when there is a decrease in labor, the unit must report the decrease from the 1st day of the following month, however, they must pay the value of the health insurance card for the following month. To avoid paying an additional value for the health insurance card of the following month, the unit can submit the decrease report starting from the 28th day of the previous month, but after reporting the decrease, they cannot report any changes for the previous month.

Thus, according to the above regulations, the enterprise must carry out the procedures for reporting an increase/decrease in labor contributing to Social Insurance, Health Insurance, and Unemployment Insurance to the social insurance agency. For the case of an increase in employees contributing to Social Insurance, within 30 days from the date of the increase, the enterprise must submit a social insurance registration dossier to the social insurance agency. For the case of a decrease in employees (when an employee leaves), the enterprise must prepare a decrease report for social insurance of the following month starting from the 28th of the previous month, and after reporting the decrease, no changes for the previous month are allowed to be reported. (The unit can also report the decrease from the 1st day of the following month but must pay the value of the health insurance card of the following month.)

Therefore, if the enterprise fails to report an increase/decrease in labor contributing to Social Insurance, Health Insurance, and Unemployment Insurance to the social insurance agency within the prescribed time, the enterprise will be fined as follows:

First: In case the enterprise reports an increase in labor late

According to clause 3 of Article 122 of the Law on Social Insurance 2014, employers who delay paying Social Insurance, Unemployment Insurance from 30 days or more will be fined as follows:

- Must pay the full amount due, the late payment, and be dealt with according to legal provisions;- Must pay an interest amount equal to twice the average investment interest rate of the social insurance fund of the preceding year on the amount and duration of the late payment;- In case of non-compliance, upon request by the competent authority, banks, other credit institutions, and the state treasury are responsible for deducting from the employer's deposit account to pay the due amount, late amount, and interest on this amount to the social insurance agency’s account.

Furthermore, point a, clause 4 of Article 38 of Decree 28/2020/ND-CP stipulates fines ranging from 12% to 15% of the total amount of mandatory social insurance, unemployment insurance that must be paid at the time of compiling the administrative violation record, but not exceeding 75,000,000 VND for employers who delay paying mandatory social insurance, unemployment insurance.

Thus, according to the above regulations, in case the enterprise reports a late increase in labor contributing to Social Insurance, leading to delayed payment of Social Insurance, Unemployment Insurance from 30 days or more, the enterprise will be fined interest equal to twice the average investment interest rate of the social insurance fund of the preceding year on the amount and duration of the late payment and shall be fined from 12% to 15% of the total amount of mandatory Social Insurance, Unemployment Insurance at the time of compiling the administrative violation record, but not exceeding 75,000,000 VND.

Second: In case the enterprise reports a decrease in labor late

According to point a, clause 2.1 of Article 50 of Decision 595/QD-BHXH in 2017, the unit must prepare and submit the dossier, deduct and pay Social Insurance, Health Insurance, Unemployment Insurance, Labor Accident Insurance, Occupational Disease Insurance according to the procedures and regulations in this document and legal provisions on Social Insurance, Health Insurance, Unemployment Insurance, Labor Accident Insurance, Occupational Disease Insurance. In case the unit prepares the decrease list late, the unit must pay the health insurance amount for the delayed decrease months, and the health insurance card is valid until the end of those months.

In addition, point 9.7, Section 9 of Official Dispatch 1734/BHXH-QLT in 2017 stipulates that when there is a decrease in labor, the unit must promptly prepare a decrease list and send it to the social insurance agency via the electronic transaction system within the month (up to the last day of that month). If the decrease is reported after the end of the month of decrease, the unit must pay the full value of the health insurance card for the next month, and the card is valid until the end of that month. The social insurance agency does not revoke the card in cases of late decrease reporting. (For example: An employee quits on July 28, 2020, but the unit reports the decrease on August 1, 2020, then the unit must pay Health Insurance for the whole of August 2020, but does not pay Social Insurance, Unemployment Insurance for August 2020)

Thus, as per above regulations, when an employee quits, the enterprise must promptly prepare a decrease list and send it to the social insurance agency via the electronic transaction system within the month (up to the last day of that month). If the enterprise prepares the decrease list late, the unit must pay the health insurance amount for the delayed decrease months, and the health insurance card is valid until the end of those months.

It can be seen that if the enterprise reports a delay in increasing labor contributing to Social Insurance, Health Insurance, and Unemployment Insurance, they will be fined administratively and must pay interest for the late payment period. However, if the enterprise reports a delay in decreasing labor contributing to Social Insurance, they only need to pay the health insurance amount for the delayed decrease months and are not subject to administrative fines as per legal regulations. Therefore, enterprises need to be mindful of the time frame for reporting labor increase/decrease to the state authorities to avoid fines as per the regulations.

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE