Effectively implementing compulsory social insurance for foreign workers

Tuesday, 2019-03-19 17:51:18
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A foreign teacher and Vietnamese students participating in an outdoor activity (Photo: NGUYEN DANG)
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NDO - According to the Vietnam Social Security (VSS), after three months of applying compulsory social insurance for foreign employees working in Vietnam, over 64% of foreign employees subject to the policy have participated in compulsory social insurance, which is considered a positive “signal” for carrying out a new policy.

Under the Government's Decree 143/2018/NĐ-CP issued on October 15, 2018 on the details of compulsory social insurance for foreign employees in Vietnam, foreigners working in Vietnam with a work permit will be subject to compulsory social insurance since December 1, 2018. This is the first time that Vietnam's law has applied regulations on the implementation of compulsory social insurance for foreign workers in the country.

Foreign employees are obliged to contribute amounts equal to 3.5% of the employee’s monthly salary to the sickness, maternity and occupational accidents and hazards starting from December 1, 2018 to December 31, 2021 and 25.5% of their monthly salary to sickness, maternity, occupational accidents and hazards, the retirement and survivor benefits funds starting from January 1, 2022. Of which, employers will contribute 17.5% and employees contribute 8% to the latter scheme.

Dinh Duy Hung, deputy director of the Contribution Collection Department under the Vietnam Social Security said that 8,730 units participated in social insurance for their 51,524 employees, with the total collection of social insurance premiums paid by foreign workers over VND100 billion (US$4.3 million) by the end of February 2019.

According to estimates by the Ministry of Labour, Invalids and Social Affairs (MOLISA), there are more than 80,000 foreign workers in Vietnam, including 90% of workers who have been granted a work permit by the Vietnamese authorities. Thus, after more than three months of implementing the decree, over 64% of foreign workers with a work permit have participated in compulsory social insurance.

Social insurance policies for migrant workers have been implemented by many countries. Dinh Duy Hung said that the implementation of the policy in Vietnam is necessary to ensure rights for workers and fairness between Vietnamese and foreign workers, while making foreigners feel more secure to work. The policy is also a positive factor to create a favourable business environment and attract high quality workers to Vietnam, Hung noted.

However, the implementation of the new policy faces several difficulties including the identification of workers subject to the policy, the language differences in social insurance transactions and the possibility of double imposition of social insurance. The Government is directing the MOLISA to negotiate and sign bilateral agreements on social insurance to avoid the double imposition of social insurance.

In order to effectively implement this new policy, the VSS has sent guidance to social insurance agencies in provinces and cities to assist them in collecting compulsory social insurance premiums.

The VSS also asked social insurance units in provinces and cities nationwide to coordinate with State management agencies on labour to correctly identify subjects of compulsory social insurance, while instructing employers to establish dossiers for their foreign employees to participate in social insurance as prescribed.