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Social insurance for foreigners to take effect from December

Released at: 10:18, 23/10/2018

Social insurance for foreigners to take effect from December

Photo: Vneconomy.vn

Decree on Law on Social Insurance effective from December 1.

by Le Diem

The government has officially issued a decree on the Law on Social Insurance regarding compulsory social insurance for foreign employees in Vietnam, which will come into effect on December 1.

The new decree will be applied to foreign nationals who are granted work permits by competent Vietnamese and international companies and organizations under definite-term labor contracts or contracts with a term of one full year.

The compulsory social insurance package covers sickness, maternity, workplace accidents, occupational diseases, retirement, and a death fund - the same as Vietnamese workers under the law.

Employers of foreign workers are required to pay 3.5 per cent of an employee’s monthly salary, including 3 per cent to a sickness and maternity fund and 0.5 per cent to cover workplace accidents and occupational diseases from December 1, 2018. They will also contribute 14 per cent more to a retirement and death fund January 1, 2022.

Meanwhile, foreign employees have to pay a monthly premium of 8 per cent of their income to the retirement and death fund from January 1, 2022, according to the Decree.

In cases where employees do not work or earn a salary for 14 days a month, they do not have to pay the social insurance for that month.

In addition, a foreign employee whose contract has expired and not been renewed or who is eligible for pensions or monthly allowances but no longer resides in Vietnam can still receive a one-off payment from the social insurance fund if requested.

Under Vietnamese law, employees are allowed to manage their social insurance book during the period paying social insurance premiums, to monitor payments and enjoyment social insurance. They are to also be provided with information from their employer on the annual payment of social insurance premiums once every six months, and have their annual social insurance premium payment certified by the social insurance agency annually. This provides important grounds for employees to compare and supervise the responsibility of their employers in paying social insurance premiums.

The compulsory social insurance for foreign workers is necessary to ensure fairness between Vietnamese and foreigners and between enterprises that only use domestic employees and those that employ foreigners, according to the National Assembly’s Social Affairs Committee.

There are nearly 85,000 foreign employees working in Vietnam, according to the latest figures from the Ministry of Labor, Invalids and Social Affairs. They mostly come from Asian countries, accounting for 73 per cent of the total, followed by European countries (21.6 per cent) and American countries (2.4 per cent).

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