Compulsory social insurance for foreign workers

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.

 

 

A foreigner working at Suoi Dau Industrial Zone donate blood.

 

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