Business household is an individual or household that is granted a business registration certificate to conduct business activities, usually with a smaller scale and less organized than other types of companies. In fact, business household is not a type of business in Vietnam, although it has many similarities with sole proprietorship. For about 20 years, the owner of business households has been classified by Social Insurance in many localities as a subject of compulsory social insurance payment. This has created a lot of frustration in public opinion and recently, the May 2023 meeting of the National Assembly Standing Committee mentioned this issue.
According to the instructions in Official Letter No. 4253/LDTBXH-social insurance dated October 4, 2019 of the Ministry of Labor, War Invalids and Social Affairs on the implementation of the compulsory social insurance policy for employees, the compulsory social insurance policy for employees is generally implemented in accordance with the law from time to time.
However, in any period, the Law on Social Insurance 2006 and the Law on Social Insurance 2014 do not have provisions on whether the owner of a business household is the subject of compulsory social insurance payment. In the subjects participating in compulsory social insurance in both versions of the Law on Social Insurance, there is no stipulation that the head of a business household is a participant.
In addition, the documents guiding the implementation of the Law on Social Insurance also do not stipulate that the owner of business households is subject to compulsory social insurance.
It should be noted that the owner of a business household and an employee working at a business household are two different entities. In particular, if employees work at business households, they will be subject to compulsory social insurance contributions. For this situation, the owner of the business household shall coordinate with the employee to compile a dossier of registration for participation and payment of compulsory social insurance and send it to the social insurance agency.
The error of Vietnam Social Insurance for 20 years
According to the data of Vietnam’s social insurance announced as of September 2016, the whole country has 4,240 business household owners in 54 different localities paying compulsory social insurance.
Accordingly, although there is no compulsory payment regulation, due to confusion, the provincial social insurance agencies still require the owner of business households to pay social insurance, considering them as a participant of the compulsory social insurance regime.
From an objective perspective, this is no different from asking the owner of a business household to pay a large amount of money every month, even though there is no such provision in the law.
For some owners, the most important thing is not that they do not want to participate in the compulsory social insurance scheme, but because the social insurance agencies mistakenly collect but do not handle the benefits for them. Because they are not a subject to compulsory insurance according to the law, they are not entitled to the period of enjoying the regime, thereby not having access to pensions or other support payments such as unemployment benefits, labor accidents – occupational diseases benefits, maternity benefits, etc.
Over the past 20 years, there have been many cases where business household owners have filed complaints, even sued the provincial social insurance company to the Court to claim their benefits, but the problem has not been resolved, the illegal insurance collection continues to this day.
Accordingly, many delegates at the meeting at the National Assembly Standing Committee asked the Government to direct the Ministry of Labor, Invalids and Social Affairs and Vietnam Social Insurance to review and solve the implementation of compulsory social insurance to owners of business households nationwide, compensate them for their rights commensurate with the level of wrongdoing and take responsibility, completely solve the situation of illegal implementation, avoid more serious mistakes in the future.
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