(Source: Viet Nam News) 

The Ministry of Labour, Invalids and Social Affairs is currently drafting a decree providing detailed regulations and guiding the implementation of the Law on Social Insurance on compulsory social insurance for employees who are foreign citizens working in Vietnam and collecting  feedback. The decree is scheduled to take effect from January 1, 2018.

The Law on Social Insurance (SI) 2014 stipulates that: “Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licences granted by competent Vietnamese agencies shall be covered by compulsory social insurance under the Government’s regulations."

According to statistics, the number of foreign employees working in Vietnam has rapidly increased and gradually stabilised in recent years. In 2016, there were 83,046 foreign employees and this number has increased in the context that Vietnam has step up international integration and commitments as well as new-generation free trade agreements.

The draft decree regulates conditions for those subject to the decree as following: foreign employees working under indefinite-term contracts, definite-term contracts, seasonal contracts, or  specific jobs with one month term or above with employers in Vietnam are subject to compulsory SI and have one of three documents (Work permit, Practice Certificate, Practice Licence) granted by Vietnamese agencies under the provisions of Clause 3, Article 2 of the Law on Social Insurance; agencies, organisations, and individuals that relate to compulsory SI for foreign employees.

The decree also proposes that foreign employees working in Vietnam who participate in compulsory SI will be provided five benefits: sickness, maternity, work injury and occupational diseases, retirement and death gratuity.

Relating to the accumulation of time participating in SI, according to the principle of international law, the accumulation of time participating in SI in both receiving and sending countries will help employees meet the qualifying conditions to receive monthly old age benefits. However, for the time being, this accumulation only applies for countries which have signed comprehensive bilateral agreements with Vietnam including provisions on the accumulation of time participating in SI.

On the rate and method of contribution: For foreign employees working under indefinite-term labour contracts, definite labour contracts, seasonal or a specific job contracts with a one month term or above with employers in Vietnam who applied compulsory SI and have one among three documents (Work permit, Practice Certificate, Practice Licence) granted by competent Vietnamese agencies, the contribution rate will be 8 percnet of monthly salary for pension and survivor fund. Employees who do not work and receive salary for 14 working days or more in a month will not pay social insurance contribution for that month. This period will not be calculated for SI benefits, except for maternity leave.

Employers participating in compulsory SI under the provisions in Clause 3, Article 2 of the Law on SI have to pay monthly contribution for employees based on the payroll as follows: 3 percent to the sickness and maternity fund; a maximum of 1 percent to the work injury and occupational diseases fund, the specific rates shall be set by the Government; 14 percent to retirement and survivors fund. Employers do not have to pay SI for employees who do not work and receive salary from 14 working days upwards in a month.

International Cooperation Department