Social insurance of Vietnamese guest worker

The demand for labor in many countries around the world has increased over the years, creating opportunities for many individuals to work abroad. In Vietnam, thousands of Vietnamese workers leave their homeland for employment each year. One of the main concerns for Vietnamese guest workers is the social insurance regime. In this article, LSX legal firm presents: “Social insurance of Vietnamese guest worker”

Legal grounds

• Law on Social Insurance consolidated
• Decree 115/2015/ND-CP
• Circular 59/2015/TT-BLDTBXH

Social Insurance

According to the Law on Social Insurance, social insurance means the guarantee to fully or partially offset an employee’s income that is reduced or lost due to his or her sickness, maternity, labor accident, occupational disease, retirement, or death, on the basis of his or her contributions to the social insurance fund.

There are 2 types of social insurance: Compulsory social insurance and Voluntary social insurance.

• Firstly, compulsory social insurance means a form of social insurance organized by the State in which employees and employers are required to participate.
• Secondly, voluntary social insurance is a type of social insurance organized by the State in which participants can choose a payment rate and payment method suitable to their income and the State has a policy to support payment of social insurance for participants to enjoy retirement and survivorship benefits.

Does Vietnamese sent abroad for business obliged to compulsory social insurance?

Clause 1, Article 2 of the Law on Social Insurance stipulates that employees being Vietnamese citizens shall be covered by compulsory social insurance, including:

• Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts, or contracts for given jobs with a term of between full 3 months and under 12 months, including also labor contracts signed between employers and at-law representatives of persons aged under 15 years in accordance with the labor law.
• Persons working under labor contracts with a term of between full 1 month and under 3 months.
• Cadres, civil servants, and public employees.
• Defense workers, public security workers, and persons doing other jobs in cipher organizations.
• Officers and professional army men of the people’s army; officers and professional non-commissioned officers and officers and technical non-commissioned officers of the people’s public security; and persons engaged in cipher work and enjoying salaries like army men.
• Non-commissioned officers and soldiers of the people’s army; non-commissioned officers and soldiers on definite-term service in the people’s public security; the army, public security, and cipher cadets who are entitled to cost- of-living allowance.
• Vietnamese guest workers under contract defined in the Law on Vietnamese Guest Workers.
• Salaried managers of enterprises and cooperatives.
• …

Also, Clause 1, Article 2 of Circular 59/2015/TT-BLDTBXH provides for subjects of application for compulsory social insurance:

Article 2. Subjects of application

1. The employees participate in compulsory social insurance specified in Clause 1 and 2, Article 2 of Decree No. 115/2015/ND-CP.
The employees specified under Points a, b, c, d, dd and e, Clause 1, Article 2 of Decree No. 115/2015/ND-CP are appointed to study, take an internship or go for business in the country or abroad but are still entitled to the salary in the country subject to the compulsory social insurance.

Article 2 of Decree No. 115/2015/ND-CP

Employees are Vietnamese citizens who participate in compulsory social insurance as prescribed in this Decree, including:
a) Persons working under indefinite-term labor contracts, definite-term labor contracts, seasonal labor contracts or contracts for given jobs with a term of between full of 3 months and under 12 months, including also labor contracts signed between employers and legal representatives of persons aged under 15 years in accordance with the labor law;
b) Persons working under labor contracts with a term of between full of 1 month and under 3 months;
c) Officials and civil servants as prescribed in legislation on officials and civil servants;
d) National defense workers, public security workers and persons doing other jobs in cipher organizations;
dd) Salaried managers of enterprises and cooperatives;
e) Part-time workers in communes, wards, and townships;

Thus, Vietnamese guest worker sent abroad for business under a contract (according to the Law on Vietnamese Guest Workers) and Vietnamese citizens falling into Points a, b, c, d, dd and e, Clause 1, Article 2 of Decree No. 115/2015/ND-CP are appointed to study, take an internship or go for business abroad but are still entitled to the salary in the country must pay compulsory social insurance.

Types of contract regulated for guest workers

Also, Article 2 of Decree 115/2015/ND-CP provides for Vietnamese guest workers subjected to compulsory social insurance as follows:

Article 2. Regulated entities

2. Vietnamese guest workers prescribed in the Law on Vietnamese guest workers participating in compulsory social insurance as prescribed in this Decree shall apply the following contracts:
a) The guest worker contracts concluded with enterprises providing guest worker services or with non-business organizations licensed to send workers abroad;
b) The guest worker contracts concluded with contract-winning or -receiving enterprises or with outward-investing organizations or individuals that send workers abroad.
c) The guest worker contracts in the form of skill-improvement internship contracts, concluded with enterprises sending workers abroad for an internship to improve their skills;
d) Individual contracts.

Accordingly, Vietnamese guest workers sent abroad under the following contracts shall participate in compulsory social insurance:

• The guest worker contracts concluded with enterprises providing guest worker services or with non-business organizations licensed to send workers abroad.
• The guest worker contracts concluded with contract-winning or -receiving enterprises or with outward-investing organizations or individuals that send workers abroad.
• The guest worker contracts in the form of skill-improvement internship contracts, concluded with enterprises sending workers abroad for an internship to improve their skills.
• Individual contracts.

Levels and methods of payment of guest workers

• The monthly level of payment to the retirement and survivorship allowance fund must equal 22% of employees’ monthly salary on which social insurance premiums are based before they go abroad to work, for employees who have paid compulsory social insurance premiums in a certain period. The monthly level of payment to the retirement and survivorship allowance fund must equal 22% of 2 times the basic salary, for employees who are not yet covered by compulsory social insurance or who have paid compulsory social insurance premiums and have already received a lump-sum social insurance allowance.
• Payment shall be made once every 3 months, every 6 months, or every 12 months, or in a lump sum within the time limit stated in the contracts on sending of employees to work abroad. Employees may make payments directly to social insurance agencies of localities where they reside before going abroad or via enterprises or non-business organizations that have sent them to work abroad.
• In case the payment is made via enterprises or non-business organizations that have sent employees to work abroad, these enterprises or organizations shall collect and pay social insurance premiums for employees and register the method of payment with social insurance agencies.
• Employees who have their contracts extended or sign new contracts in the host countries shall pay social insurance premiums according to the method specified in this Article or shall retrospectively pay social insurance premiums to social insurance agencies after they repatriate.

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This article contains information about “Social insurance of Vietnamese guest worker”. In recent years, we have supplied effective legal advice to businesses and individuals at reasonable prices and with efficient results. We always update and keep our operations and services in line with the law by adhering to legal principles. If you need any further information from the firm’s solicitors, please contact  LSX Law firm: +84846175333 or Email: [email protected]

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