Vietnam: Enterprises must pay social insurance for probationary employees from January 01, 2021?

Currently, according to the Labor Code 2012 of Vietnam probation is not a labor relationship but just a trial job of an employee. At that time, the parties can enter into a probationary contract with a number of contents according to Article 26 of this Law, including:

- Name and address of the employer or the lawful representative of the employer;

- Full name, date of birth, gender, residence address, identity card number or other lawful documents of the employee;

- Job and workplace;

- Term of the labor contract;

- Wage, form of wage payment, deadline for wage payment, wage-based allowances and other additional payments;

- Working time, rest time;

- Labor protection equipment for the employee.

Particularly, the probationary contract does not have the social insurance content as the labor contract as prescribed in Article 23 of the Labor Code 2012 of Vietnam.

However, from January 01, 2021 (effective date of the Labor Code 2019 of Vietnam), there have been changes in the regulations on probation contracts between the parties. Specifically, according to Article 24 of the Labor Code 2019 of Vietnam, employer and employee can agree on the content of the probationary period in one of two ways:

- Include the contents of the probation in the employment contract;

- Enter into a separate probation contract.

It can be seen that in case the enterprise and the employee have agreed on the content of the probationary period and recorded in the labor contract, the two parties have entered into a labor contract including the probationary period.

According to Article 2 of the Law on Social Insurance 2014 of Vietnam (effective), subjects participating in compulsory social insurance include persons working under labor contracts with a term of at least 1 month. Thus, if the employer and employee agree on the content of the probationary period and write it in the labor contract, the employee will be subject to participation in compulsory social insurance, including the above probationary period, and the enterprise must have responsibility to pay social insurance for employees at the prescribed rate.

The above are the provisions of the labor law on the probationary relationship between the parties applied from January 01, 2021 in Vietnam. Employers and employees need to pay attention in agreeing and establishing a probationary relationship to ensure the interests of the parties in accordance with regulations.

Hoa Hong

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