regulations on acts of evasion and late payment of social insurance in Vietnam, regulations on acts of evasion of social insurance in Vietnam, regulations on acts of late payment of social insurance in Vietnam, evasion and late payment of social insurance in Vietnam,

Regulations on acts of evasion and late payment of social insurance in Vietnam

The act of evasion and late payment of Vietnamese social insurance takes place a lot in Vietnam. However, the sanctioning mechanism still lacks deterrence, leading to a lot of inertia, debt payment, and even evasion of social insurance payment, which severely affects society and employees’ rights in Vietnam.

According to Vietnamese law, individuals and organizations are obliged to pay social insurance contributions for employees every month. Evading or delaying payment of social insurance is a violation of the law on social insurance specified in Clauses 1 and 2, Article 17 of the Law on Social Insurance 2014 No. 58/2014/QH13.

According to the latest statistics of Vietnam Social Security, by the end of January, Vietnamese enterprises were late to pay social insurance contributions of 25,943 billion VND, an increase of nearly 3,900 billion VND compared to the same period last year. With the latest late payment amount at the beginning of 2023, experts calculate that currently, the total amount of interest for late payments is nearly 14,100 billion VND.

Determined not to let the situation of evasion and delay in payment of social insurance continue on such a large scale, seriously affecting people’s lives and the development of society, Vietnam Social Insurance said it will continue to strengthen inspection and examination of enterprises that have not yet registered to pay or have paid social insurance inadequately and have delayed payment for three months or more. Companies that intentionally evade payment of social insurance will be filed a lawsuit in accordance with Article 216 of the Penal Code.

The act of evading payment with such a large amount of money occurred partly because the enterprise made a loss, no longer had enough money to pay salaries, pay social insurance contributions, as well as other obligations as prescribed by law.

Among the payables, social insurance contributions are considered to be the easiest to evade and the slowest to pay because it is difficult for employees to control the actual payment or not of enterprises, social insurance agencies are still distracted, not closely following the payment of the businesses.

This is also partly because if the enterprise is really in a state of loss, or restructuring, and no longer has enough money to pay social insurance contributions, the social insurance department will, depending on the case, consider letting the business make late payments of social insurance contributions.

However, most Vietnamese enterprises now often avoid paying or delaying paying to use that money to make profitable investments, such as using the money to pay social insurance contributions to banks to earn monthly interest.

As a result of the delay, more than 206,000 Vietnamese workers have their benefits “suspended” such as not being able to receive unemployment insurance because the requirements for the previous month are not met.

Penalties for the evasion and late payment of Vietnamese social insurance

Clause 5, Article 39 of Decree 12/2022/ND-CP stipulates that the act of late payment of social insurance contributions in Vietnam will be subject to a fine ranging from 12% to 15% of the total amount of compulsory social insurance payment at the time of making the minutes of administrative violations but not exceeding 75,000,000 VND.

Clause 7, Article 39 of Decree 12/2022/ND-CP stipulates that acts of evading Vietnamese social insurance contributions but not reaching the level of criminal prosecution will be subject to a fine ranging from VND 50,000,000 to VND 75,000,000.

Measures to remedy the consequences of late payment or evasion of social insurance payment must comply with Clause 10, Article 39 of Decree No. 12/2022/ND-CP, including:

– Forcing the employer to fully pay the compulsory social insurance contributions to the social insurance agency;

– Forcing the employer to pay an interest equal to 02 times the average investment interest rate of the social insurance fund of the preceding year, calculated on the amount, time of late payment, failure to pay, evading payment, or misappropriation of the payment.

If the act of evading payment is to the level of criminal prosecution, depending on the nature of the case, the employer or the enterprise may be subject to various fines, up to 1,000,000,000 VND or imprisonment up to 07 years, an additional fine of up to VND 100,000,000, a ban from holding certain positions, practicing certain professions or doing certain jobs for up to 5 years.

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.


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