Question 1:
Q: Would you explain in detail the new points of Decree No.143/2018/ND-CP on mandatory insurance contribution by foreign labourers in Vietnam? Why are these new policies formed? How are foreign labourers’ rights ensured following the adjustments? Are there overlapping insurance contributions by foreign labourers in Vietnam and in their home countries? How do foreign labourers and their employers respond to the decree?

Answer:

(1) Clause 2, Article 3 of the 2014 Social Insurance Law stipulates that foreign labourers in Vietnam who have work permits, practicing certificates, or practicing licences granted by authorised Vietnamese agencies are eligible to participate in mandatory social insurance in line with the Vietnamese Government’s regulations.

On October 15, 2018, the Government issued Decree No.143/2018/ND-CP giving details of the Social Insurance Law and the Law on Labour Safety and Hygiene, regarding mandatory social insurance towards foreign labourers in Vietnam. The decree stipulates subjects and contributions to social insurance as follows:

- Subjects:
Foreign labourers in Vietnam will be subject to mandatory social insurance if they have work permits, practicing certificates, or practicing licences granted by authorised Vietnamese agencies; unlimited term labour contracts or limited term labour contracts which have lasted for one year or more, except:
+ Labourers who are intra-corporate transferees in line with Clause 1, Article 3 of the Government’s Decree No.11/2016/ND-CP dated February 3, 2016, which details the implementation of some articles of the Labour Code regarding foreign labourers in Vietnam, and
+ Employees who reach the retirement age in accordance with Clause 1, Article 187 of the Labour Code.
- Contribution rates and alternative payment:
+ From December 1, 2018 to December 31, 2018, employers must make contributions for foreign employees at 3.5 percent of their monthly salary.
+ As from January 1, 2022, the rate will increase to 25.5 percent, with 17.5 percent by employers and 8 percent by employees.
Each month, employers contribute part of their employees’ salary to the social insurance fund.
(2) There have been no documents on the implementation of social insurance policies between countries. Decree No.143/2018/CD-CP also stipulates that if the decree’s regulations and international treaties to which Vietnam is a member prescribe the same issue differently, the international treaty will be applied.
To support foreign labourers in joining social insurance in Vietnam, the Government has instructed the Ministry of Labour, Invalids, and Social Affairs and the Vietnam Social Security to negotiate bilateral agreements on social insurance to avoid overlapping contributions.

Question 2: What are the advantages and difficulties in the implementation process?

Answer:

1.       The advantages include:

-        The social insurance sector, having performed its function and task of organising the collection of compulsory social insurance and managing the social insurance fund since 1995, has gained rich experience and professional capacity in collecting compulsory social insurance. This is one of the sector’s advantages in the task of collecting the compulsory insurance of foreign labourers in Vietnam.

-        The majority of foreign labourers in Vietnam are working for agencies, organisations, and companies based in the Vietnamese territories which also employ Vietnamese employees covered by compulsory social insurance. Therefore, there is no need to organise new agencies or personnel for the work, thus saving insurance collection costs.

-        The documents, procedures, and management methods are essentially the same for foreign workers as those applied to Vietnamese labourers who are subject to compulsory social insurance.

2.       Difficulties: The decree became effective on December 1, 2018 and is being implemented by the Vietnam Social Security through many measures, including communications on policies and giving guidelines in implementation to social insurance agencies of localities. Initially, no major difficulty or obstacle has been reported. The Vietnam Social Security has also answered questions raised by businesses on defining the subjects of social insurance, such as those who are not eligible for receiving work permits under the current regulations of the Labour Code.

Question 3: Social insurance regulations regarding pension and survivor benefit will take effect from January 1, 2022. Currently, foreign labourers are paying great attention to retirement issue, due to the concern that they may return to their homeland before reaching retirement age. So, in that case, how will they receive benefit payment?

Answer:

Clause 6, Article 9 of Decree No.143/2018/ND-CP stipulates in detail cases that can enjoy social insurance payment in lump sums, under which labourers who are citizens of a foreign country, work in Vietnam, and are subject to compulsory social insurance will enjoy a lump sum payment if they belong to one of the following cases:

-        Those who have reached the age of retirement but have not participated in social insurance for full 20 years.

-        Those who suffer from fatal diseases such as cancer, paralytics, cirrhosis, leprosy, fatal tuberculosis, AIDS, and other diseases under the regulations given by the Ministry of Health.

-        Labourers with full conditions to enjoy their pensions in line with regulations but do not continue to reside in Vietnam.

-        Labourers who end their labour contracts or have their work permit or professional certificate expired without extension.

Therefore, in cases where labourers who are foreign citizens fail to meet the requirement in age to enjoy pension and do not continue to reside in Vietnam will be given a lump sum payment of social insurance benefit.

Question 4: What are the solutions for effectively carrying out social insurance schemes for foreigners working in Viet Nam?

Answer:

- Raising public awareness of policies and legal regulations on compulsory social insurance for foreign workers in Vietnam is put at the first line of priority. Thus, communications work must be carried out to ensure that State agencies, businesses, and organisations which employ foreign labourers gain a deeper insight into social insurance policies. Companies should receive instructions to carry out necessary procedures.

- Businesses and organisations recruiting foreigners have to abide by the legal regulations, and join hands with the social security organisations to register, pay contributions, and handle procedures and  benefits for their labourers in a timely manner.

- The various chapters of the Vietnam Social Security (VSS) must realise state regulations and follow the instructions of the VSS, from communications work and procedure instructions to document reception and settlement. They must also coordinate with competent authorities in localities to manage foreign workers.

- The VSS must serve organisations and individuals involved in the social security scheme with a positive attitude and high standard of service.