Enterprises must pay an additional amount if employees do not participate in compulsory social insurance in Vietnam

Enterprises must pay an additional amount if employees do not participate in compulsory social insurance in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Enterprises must pay an additional amount if employees do not participate in compulsory social insurance in Vietnam

According to Article 168 of the Labor Code 2019, regulations on participation in social insurance, health insurance and unemployment insurance are as follows:

- 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.

- 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.

- 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, according to the above regulations, 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

2. Who does not have to participate in compulsory social insurance and receive additional payments in Vietnam?

In Clause 4, Article 4, Decision 595/QD-BHXH 2017 stipulates that entities that are not subject to participate in compulsory social insurance, health insurance, and unemployment insurance as follows:

(1) Household helper;

(2) People receiving monthly pension;

(3) People who are receiving monthly benefits according to the provisions of Decree 09/1998/ND-CP amending Decree 50/CP on living expenses for commune, ward and town officials;

(4) People receiving monthly disability benefits

(5) People who are receiving monthly benefits as prescribed in Decision 91/2000/QĐ-TTg; Decision 613/QĐ-TTg in 2010

(6) Military personnel, People's Police, and people doing cipher work are receiving monthly benefits as prescribed in Decision 142/2008/QĐ-TTg ; Decision 38/2010/QĐ-TTg sửa đổi Decision 142/2008/QĐ-TTg; Decision 53/2010/QĐ-TTg; Decision 62/2011/QD-TTg

Thus, the above subjects are paid an additional amount of money equivalent to the amount the employer pays for compulsory social insurance, health insurance, and unemployment insurance for employees according to the provisions of law. on social insurance, health insurance, unemployment insurance.

3. Calculation method and additional amount received when not participating in compulsory social insurance in Vietnam

According to the instructions in Decision 595/QD-BHXH 2017, every month, employees will have to make insurance contributions with certain percentages of their salary as a basis for paying compulsory social insurance:

With labor accident and occupational disease insurance, businesses that are eligible to contribute to the labor accident and occupational disease fund at a lower rate and are approved by the Ministry of Labor, War Invalids, and Social Affairs can pay 0.3% (according to point b, clause 1, Article 4, Article 5 of Decree 58/2020/ND-CP). The rest must pay 0.5%.

Thus, if the employee is not subject to compulsory insurance for the company to pay insurance, the employee will receive the following amount: Amount in lieu of social insurance payment = (equal to) 21.5% or 21.3% x (multiply) salary as the basis for social insurance payment.

In particular, according to Clause 26, Article 1 of Circular 06/2021/TT-BLDTBXH, the salary used as the basis for paying social insurance to employees includes: Salary according to job or title; Salary allowances to compensate for working conditions, work complexity, living conditions, and level of labor attraction for which the salary in the contract has not been taken into account or has been taken into account but is not complete; Additional payments have a specific amount of money determined and are paid regularly during each pay period.

Nguyen Ngoc Que Anh

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