Tiếng Việt
中文 (中国)
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(Vietnam) In recent years, Vietnam has seen a surge of startups and businesses across the country. Although this is great for the economy, the sudden increase in the number of businesses also means that the management and oversight system of Vietnam can’t handle it in an instance. Consequently, there have been many cases in which the businesses broke the law, refused to pay social insurance for their employees. This is a phenomenon that needs to be stopped immediately. So, what are the regulations on penalties for evasion of the social insurance payment in Vietnam?
Businesses who broke the law and refused to pay or cut off the employees’ salaries or rejected to pay the employees’ social insurance to the social insurance fund of Vietnam are increasing day by day in Vietnam, especially since the Covid-19 restriction methods are being applied, causing a heavy burden to all industries.
However, despite the negative impacts, it is not a reason for the businesses to break the law and avoid paying the social insurance for their employees.
Because although the businesses suffer, the employees are the ones who are experiencing the full impacts of the Covid-19 pandemic. Accordingly, this is the time they need assistance from their employers, not the other way around.
That being said, the employees should not hope for their employers to change their hearts and give out supports, or basically, follow the laws.
Instead, the employees should stand up and call out for help, standing up against the employers who violated their rights.
Social insurance is mandatory
According to the representative of the Ho Chi Minh City Confederation of Labor (Confederation of Labor), the current situation of sluggishness and evasion of social insurance contributions continues to increase dramatically.
The evasion of social insurance contributions is not only a violation of the law but also an act of appropriating the employees’ social insurance contributions, seriously affecting the interests of employees.
Paying social insurance for employees is a mandatory responsibility of the businesses when entering into labor contracts.
However, in fact, for many different reasons, many businesses have violated the law when they owe or “evade payment of social insurance”, leading to employees having to bear monetary losses, seriously affecting their livelihood, especially when they retired.
Standing up to protect their legitimate rights
To protect their legitimate rights and interests when knowing that the business refuses to pay social insurance, the employee needs to exercise the right to file a complaint with the company to request the company to pay additional social insurance.
If the company still does not make the additional payment, the employee can proceed to complain to the Chief Inspector of the Department of Labor, War Invalids, and Social Affairs.
At the same time, the employee can initiate a lawsuit to the People’s Court to request dispute settlement.
During this entire process, the employee should consult help from the employee representative organization, trade union, or a lawyer.
Regulations on penalties for evasion of the social insurance payment in Vietnam
According to Article 17 of the Law on Social Insurance 2014, evasion of social insurance payment is a prohibited act in Vietnam. In addition, depending on the nature and seriousness of the violation, the business may be administratively sanctioned or penalized, or even criminally charged.
Regarding administrative sanctions, the business can be fined from 36 – 40% of the total amount to pay social insurance for the act of not paying social insurance for employees (Decree 28/2020/ND-CP). Similarly, for acts of evading social insurance contributions, the business may be fined from 100 to 140 million VND.
If the act of evading social insurance contributions has enough elements to constitute a crime, i.e. it has been repeated many times and on a large scale according to the regulations of the law, the business may be criminally handled according to Article 216 of the Penal Code 2015 (amended and supplemented in 2017) with a maximum fine of up to 1 billion VND or imprisonment for up to 7 years.
Furthermore, an additional fine of up to VND 100 million may be imposed, a ban from holding certain posts, practicing certain professions, or doing certain jobs for up to 5 years.
In addition to the above-mentioned sanctions, the business is also subject to arrears of the social insurance contributions and forced to pay the interest calculated on the amount and time of evasion.
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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