Through the system of receiving and responding to enterprises’ questions, the THP Travel Co., Ltd. asked competent agencies to clarify some issues pertaining to salary and social insurance policies for labourers in the company as follows:

- For people who have retired with pension but are now taking extra work such as a regular watchman at the company, is it all right for our company not to continue registering social insurance for them?

- The participation in compulsory social insurance for employees who are over 60 years old but do not make social insurance contributions at our company, or who have joined voluntary social insurance in their localities.

- If a person is working in two companies and has paid social insurance premium in a company, how are his/her social insurance benefits in the other company calculated?

- Are unexpected rewards such as those for initiatives and production materials and time saving ideas, along with quarterly and annual bonuses included in the amount of income to calculate social insurance premiums?

- What should we do in the case of an employee who cannot transfer his/her social insurance book from the old company to our company because the old company owes social insurance contributions? What does this employee need to do to claim their benefits when health insurance contributions haven’t been made in five consecutive years in the new company, and the social insurance premium in the new company is different from the amount in the old company.

- In the case members of the Board of Directors, Members' Council, Supervisory Board directly engage in management activities at the company with records on workdays, is the salary paid for those persons included in cost price?

The MOLISA replies to those questions as follows:

For recipients of retirement pension and persons who are over 60 years old and don'tdonot participate in compulsory social insurance:

According to Clause 9, Article 123 of the Law on Social Insurance, recipients of retirement pension, social insurance allowance or monthly allowance who are working under signed labour contracts are not required to join compulsory social insurance.

Thus, an employee who has retired and is receiving monthly pension continues to work at the company, he/she is not subject to compulsory social insurance.

With regard to employees who are over 60 years old, if they are subject to compulsory social insurance under Points a and b in Clause 1 of Article 2 of the Law on Social Insurance, but not among the cases prescribed in Clause 9 of Article 123 of the Law on Social Insurance, but are among the cases stipulated in Clause 4, Article 2 of the Government's Decree No. 115/2015 / ND-CP, dated November 11, 2015, the employees and their employers must participate in compulsory social insurance. Employers are responsible for paying their share of social insurance contributions for the employees and for deducting social insurance premium from the employees’ salary to contribute to the social insurance fund in conformity with the Law on Social Insurance.

In the case workers who already participated in voluntary social insurance, they should cease their engagement in voluntary social insurance to switch to compulsory social insurance at the date they became subject to compulsory social insurance.

Social insurance benefits when working in many companies

According to Clause 4, Article 85 of the Law on Social Insurance, an employee who sign labour contracts with many employers and is subject to compulsory social insurance shall only pay social insurance premiums under the first-signed labour contract.

Regarding the labour accident and occupational disease insurance, under Clause 2 of Article 43 in the Law on Occupational Safety and Health, in case an employee signs labour contracts with many employers, employers shall pay occupational accident and disease insurance premiums under each labour contract if that employee is subject to compulsory social insurance.

At that time, if the employee is sick, give birth, retire or die, social insurance benefits will be paid in accordance with the labour relations between the employee and the company where he/she joins social insurance. In terms of occupational accident and occupational disease insurance, occupational accident and occupational disease insurance benefits are based on labour relations in the company where the occupational accident or occupational disease occurs. The benefits are based on total social insurance premiums in all labour contracts covered by social insurance.

Income level as basis for calculating social insurance premium

According to Clause 2, Article 89 of the Law on Social Insurance, as from January 1, 2018 onwards, the monthly income basing on which social insurance contribution is calculated shall include the salary, allowances and other extra payments in accordance with laws on labour.

Under Clauses 2 and 3 of Article 30 in the MOLISA's Circular No. 59/2015 / TT-BLDTBXH, dated December 29, 2015, which details and guide the enforcement of some articles on compulsory social insurance in the Social Insurance Law: The salary allowances defined in Point a, Clause 2 of Article 4 in Circular No. 47/2015/TT-BLDTBXH are the salary allowances to offset the labour conditions, work complexity, living conditions and level of labour attractiveness which were not included or not fully included in the salary stated in labour contracts, such as allowance for position and title; responsibility allowance; allowances for heavy, hazardous or dangerous works; seniority allowances; region-based allowances; allowances for those doing jobs with unstable workplace and residence; allowances for those working in particularly disadvantaged areas, and similar allowances.

Other extra payments under Point a, Clause 3 of Article 4 in Circular No. 47/2015/TT-BLDTBXH include additional payments of specific amount along with the salary level agreed in labour contracts and are paid regularly in each pay period; and additional payments with no specific amount along with the salary level agreed in labour contracts and are paid regularly or irregularly in each pay period associated with employees’ work process or performance results.

The monthly income basing on which compulsory social insurance contributions are calculated shall not include other allowances and benefits such as bonuses as stipulated in Article 103 of the Labour Code, rewards for initiatives, mid-shift meal; aid for petrol, telephone, travel, housing, child care, child raising expenses; aid for employees whose relatives died or get married, gift for employees’ birthdays, support for employees who are in a plight as a result of workplace accidents or occupational diseases, along with other allowances and subsidies stated separately in labour contracts.

According to the above mentionedabovementioned provisions, unexpected bonuses such as rewards for initiatives, production materials and time saving idea, as well as quarterly and annual bonuses shall not be used as basis for calculating compulsory social insurance contribution.

Finalising social insurance books for labourers changing their jobs

Under Clause 3, Article 18 of the Government's Decree No. 115/2015/ND-CP, dated November 11, 2015, which details some articles on compulsory social insurance of the Law on Social Insurance, employers are responsible for paying full their share of social insurance and unemployment insurance premiums, including interests on late payment of insurance premiums, as stipulated, for employees who are eligible for social insurance benefits or terminate labour contracts or work contracts, so as to ensure the timely payment of social and unemployment insurance benefits for the employees. Additionally, under Clause 2, Article 18 of the Law on Social Insurance, labourers participating in social insurance shall be granted with and manage their social insurance books.

Basing on the abovementioned provisions, if the labourers have not had procedures relating to their social insurance books completed and have not received their social insurance books because the old company still owes social insurance premiums, the laborers should contact their old company to comply with legal regulations. For the THP Travel Co. Ltd, when it signs labour contracts with employees subject to compulsory social insurance, it still has to adhere to regulations on registering for and paying social insurance premiums for its employees.

Inclusion of company managers’ salary in cost price

Under Clause 2 of Article 66 and Clause 2 of Article 84 in the 2014 Law on Enterprises, wage and remuneration of managers of limited liability companies (including: chairman or members of the Members' Council, Chairman of the company, head of the Control Board, supervisor, General Director, Director, Deputy General Director, Deputy Director and Chief Accountant) are included in business costs and recorded separately in annual financial reports of the company.