Mr Dinh Duy Hung, deputy head of Vietnam Social Security’s Department of Collection.

Reporter: Since the implementation of Government Decree No 143/2018/ND-CP, dated October 15, 2018, which specified the Law on Social Insurance and the Law on Occupational Safety and Health’s regulations on compulsory social insurance for employees who are foreigners in Vietnam, how much have businesses employing foreign workers in Vietnam paid in terms of social and health insurance? 

Dinh Duy Hung: Pursuant to Decree No 143/2018/NĐ-CP, starting from December 1, 2018, foreign workers in Vietnam will be subject to participation in compulsory State social insurance. This is the first time Vietnam has introduced legislation that enforces social insurance for expatriate labourer. The new law is implemented in phases, as follows:

• From December 1, 2018 to December 31, 2021, each month, the employer will contribute an amount equal to 3.5% of the employee’s monthly salary into the sickness, maternity, labour accidents and occupational diseases insurance funds.
• From January 1, 2022 onwards, the employer’s contribution rate will increase to 17.5%, while the employee contributes 8% of their monthly salary (totaling 24.5%) into sickness, maternity, labour accidents and occupational diseases funds, as well as pension and survivors’ benefits.

According to the Vietnam Social Security, by the end of February 2019, the total collection of social insurance premiums paid by foreign workers in the country reached VNĐ100.792 billion (US$4.3 million)

Reporter: Currently, how many businesses are supposed to pay insurance for their foreign workers in Vietnam? How many foreign workers in Vietnam are subject to the new insurance law?

Dinh Duy Hung: Three months after the Decree 143 took effect, the total number of businesses participating in State social insurance reached 8,730, with a total of 51,524 foreign employees.

According to the Ministry of Labour, Invalids and Social Affairs, the country currently has over 80,000 foreign workers, with 90 per cent of them having obtained proper permits.

This means that just three months after implementing Government Decree 143/2018, 64 per cent of applicable workers have taken part in the social insurance scheme, which is a positive result for a new policy.

In the future, in line with Decree 143/2018 and Document No 5300/LĐTBXH-BHXH dated December 17, 2018 by the labour ministry on the implementation of Decree 143, Việt Nam Social Security will continue to instruct local social security agencies to actively cooperate with State labour agencies to take stock of the foreign workers subject to the new insurance law, as well as to instruct employers of foreign workers in following the new law.​

Reporter: How do you think the obligatory insurance for foreign workers in Vietnam will impact the business environment in the country, and how it could affect efforts to attract a high quality workforce to Vietnam? What are the difficulties in collection and payment of insurance premiums for foreign workers in Vietnam?

Dinh Duy Hung: Social insurance policies for expatriate workers have been enacted in many countries already. Given Vietnam's increasing integration with the global economy, making social insurance mandatory for foreign workers in Vietnam is a necessity that creates fairness between Vietnamese workers and foreign workers in Vietnam, and ensures foreign workers' benefits and interests, creating peace of mind for them during their time working in Vietnam. I think this is a positive factor in the making of a conducive business environment – one that draws a high-quality workforce to Vietnam.

As a new policy, the implementation has encountered a number of obstacles.

First, the Government's Decree No 143/2018, which went into effect on December 1, 2018, is a new policy without an accompanying decree that provides instructions and guidelines for it. Recently, Vietnam Social Security has been receiving feedback from businesses employing foreign workers in Vietnam and are instructing local social security agencies to work with local labour agencies to grasp the exact number of foreign workers in their jurisdiction that would be subject to the new insurance programme and help businesses follow the new policy.

Second, the language barrier. Foreign workers in Vietnam come from many countries while their identity documents are available only in their native language, which causes trouble during insurance registration, verification and transactions.

Third, the possibility of double payment. Foreign workers working in Vietnam might have already participated in a social insurance scheme in their own country or vice versa. To address this issue, the Government is instructing the labour ministry to expedite negotiations and signing of bilateral totalisation agreements to avoid dual social insurance coverage.

Reporter: Thank you for your time!