Khanh Hoa Social Insurance
Company has just given guidance to local agencies and enterprises on
compulsory social insurance for foreign employees in Vietnam as of
December 1.
The implementation of the Social
Insurance Law 2014 and the Decree No. 143/2018/ND-CP defining details of
the Law on Social Insurance regarding compulsory social insurance for
foreign employees in Vietnam is necessary in accordance with the
International Practice and regulations of the International Labor
Organization. The compulsory social insurance covers sickness,
maternity, occupational accidents, occupational diseases, retirement and
death, the same for Vietnamese employees.
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In addition, the provision is to
protect the rights and interests of not only foreign employees but also
Vietnamese people working abroad through bilateral agreements on social
insurance, contributing to strengthening the employment management and
preventing illegal foreign workers.
The Social Insurance Law 2014 and the
Decree No. 143/2018/ND-CP defining details of the Law on Social
Insurance regarding compulsory social insurance for foreign employees in
Vietnam will be applied to foreigners who are granted work permits by
competent Vietnam authorities under indefinite-term labor contracts or
1-year contracts.
The compulsory insurance policy does
not apply for employees with work change within their companies as
stipulated in the Clause 1 Article 3 of the Government’s Decree No. 11
dated February 3, 2016 and workers reaching retirement ages as
stipulated in the Clause 1, article 187 of the labor Code.
From December 1, 2018 to December 31,
2021, a monthly premium of 3.5% of salary will be paid. Foreign
employees will have to pay 0% of their income and employers of foreign
workers are required to pay 3.5%, including 3% to a sickness and
maternity fund and 0.5% to cover occupational diseases or accidents.
From January 1, 2022 until further
notice, a monthly premium of 25.5% of salary will be paid. Specifically,
foreign employees will have to pay a monthly premium of 8% of their
income to the retirement and death fund. Employers of foreign workers
are required to pay 17.5%, including 3.5% of an employee’s monthly
salary (3% to a sickness and maternity fund and 0.5% to cover
occupational diseases or accidents); and 14% to the retirement and death
fund.
The income the monthly premium is
based on includes the monthly salary, allowance and other pays as
regulated by the law as stated in the labor contract. The income is
decided by employers.
The Government shall consider
adjusting the aforesaid premium rate from January 1st, 2020, based on
the capacity for balancing the insurance Fund for occupational accidents
and occupational diseases.
Those eligible to receive a one-time
benefit pay-out include those reaching retirement age but whose premium
payment period is less than 20 years; people with terminal illnesses;
those eligible to receive retirement insurance but no longer living in
Vietnam, or those whose practice licensees and work permits are expired
and not extended, says Le Hung Chinh, Vice-Director of Khanh Hoa Social
Insurance Company.
Van Giang
Translated by N.T