Social insurance proposed to be compulsory for informal workers

14/06/2022 02:17 PM

HCM CITY — Social insurance participation should be mandatory for informal workers, heard the symposium "Developing a stable labour supply chain after the COVID-19 pandemic", which was part of the 4th Vietnam Economic Forum 2022.

The symposium was chaired by Deputy Head of the Central Economic Commission Do Ngoc An; Deputy Minister of Labour, War Invalids and Social Affairs Le Van Thanh; Vice Chairman of the Vietnam General Confederation of Labour Ngo Duy Hieu and ILO Director in Viet Nam Ingrid Christensen.

During the symposium, participants focused on solutions to develop Viet Nam's labour market in integration, completing the national labour management policy after the COVID-19 pandemic and perfecting the law to reduce the rate of informal workers after the pandemic.


People attend the symposium "Developing a stable labour supply chain after the COVID-19 pandemic", part of the 4th Vietnam Economic Forum 2022.

At the symposium, Le Duy Binh, an economic expert, Director of Economica Vietnam, said that there was a growing number of labourers who have never had an employment relationship expressed in the form of stable and long-term labour contracts.

At the same time, the number of highly qualified and skilled workers who work on technology platforms will increase. Therefore, the approach to informal workers should be changed, for example, requirements for social insurance participation should not depend on a labour contract.

"In other words, we can "formalise" informal workers via social insurance participation and protect their rights without having to move them into the formal economic sector. With this solution, the social insurance industry needs to continue to promote services with more suitable, attractive and diversified products and benefits," he said.

According to Binh, low-income earners, social protection beneficiaries and low-income self-employed workers should be supported to participate in voluntary social insurance. This contributes to the expansion of social insurance participation, enhances the formality of self-employed workers and helps them enter the labour market with better protection under the social safety net.

However, the expansion of formal labour and the expansion of social insurance also requires the participation of other laws such as the Tax Law, the Enterprise Law and other specialised laws. The approach to the expansion of formal labour therefore needs to be based on systematic principles and requires the participation of many ministries and branches as well as legal documents, Binh said.

Le Duy Binh, an economic expert, Director of Economica Vietnam, speaks at the symposium.

“Informal workers are playing an important role in the Vietnamese economy, from the perspective of job creation to making a significant contribution to the country's GDP. Of which, the largest contribution of the informal sector is to create jobs for about 70 per cent of working people. To reduce the situation of informal workers, all levels and sectors should take measures to expand social insurance coverage, expand the formal economic sector, and improve workers' rights. It is necessary to make social insurance participation a mandatory condition, not a voluntary one as it is now," emphasised Binh.

Bui Sy Loi, former Vice Chairman of the Social Affairs Committee of the National Assembly, citing analytical data, said 53.4 per cent ​​of informal workers nationwide are wage earners (equivalent to 9.6 million people), 32.1 per cent (equivalent to 5.8 million people) are self-employed and 11.8 per cent (equivalent to 2.2 million people) are family workers. Up to 43.9 per cent of informal workers are classified as vulnerable workers (of which 32.1 per cent are self-employed and 11.8 per cent are unpaid family workers), while only 14 per cent of formal workers are classified in this group.

In addition, the average monthly salary of informal workers is lower than that of formal workers in all employment positions. The average salary of the formal group of workers is about VND6.7 million per month, and the average salary of the informal group is just over half of that figure (VND4.4 million per month). In addition, only 1.7 per cent of formal workers did not have a labour contract, while 76.7 per cent of informal workers work without any written labour contract related to their current jobs.

According to Loi, it is worth mentioning that most informal workers do not have social insurance (accounting for 97.9 per cent), only 0.2 per cent pay compulsory social insurance, the remaining 1.9 per cent pay voluntary social insurance.

Meanwhile, the percentage of formal workers with compulsory social insurance is very high (80.5 per cent). This practice shows that informal sector workers and their families are often disadvantaged because they are not regulated by the legal system on labour.

"For example, for health and safety requirements related to working conditions, they do not receive support from social welfare programmes. In addition, the voice of workers in the informal sector is rarely mentioned in the policy decision-making process because they do not contribute to social insurance or taxes. Therefore, the issue of protecting informal workers participating in social insurance and health insurance needs to continue to be promoted,” said Loi.

At the workshop, Mr. Bui Sy Loi also proposed seven issues to reduce the rate of informal workers when amending a number of laws. For example, there should be regulations to support vocational skills training for workers, financial support, tax reduction for small, medium and micro enterprises (Employment Law); and promote the development of voluntary social insurance programs in the informal economy (Law on Social Insurance)./.