Foreigners employed in Vietnam are required to pay social insurance

The Ministry of Labour, Invalids and Social Affairs and Vietnam Social Security (VSS) have been working with other countries on bilateral agreements to ensure the benefits to foreign workers employed in Vietnam who are required to pay social insurance.

Under a newly-issued decree which will take effect from December 1st 2018 stipulating compulsory social insurance for foreign employees in Vietnam, foreigners with a work permit, practice certificate, or practice license granted by local authorities and under non-fixed-term labour contracts or contracts with a term of one full year and above shall be subject to compulsory social insurance. Said Dao Viet Anh, VSS deputy general director yesterday at a media briefing

They will be entitled to the following social insurance regimes – sickness, maternity, workplace accident, occupational disease, retirement, and survivor benefits. From December 1 this year until December 31, 2021, employers are obliged to contribute amounts equal to 3 per cent of the employee’s monthly salary to the sickness and maternity funds and 0.5 per cent into occupational accidents and hazards.

Employers will have to contribute 14 per cent of the employee’s monthly salary into the retirement and survivor benefits fund and the employee’s contribution to the retirement and survivor benefits fund is set at 8 per cent of their monthly salary, equivalent to the amount Vietnamese workers have to contribute. The new regulation will be applied from January 1, 2022.

“There would be differing opinions towards the new decree from foreign employees and Vietnamese employers”, Dao Viet Anh added.

The VSS has completed the fourth round of negotiations on the agreement with the Republic of Korea – one of the countries with the biggest number of people employed in Vietnam and is working with Japan and Germany, Anh said, adding that VSS aims to sign bilateral agreements with all nations with large numbers of employees in Vietnam.

“The bilateral agreements will fully support foreign employers in Vietnam who are entitled to the compulsory social insurance scheme,” he said.

To help employers adapt to the new regulations, the compulsory social insurance payment for long-term retirement and survivor benefits fund will not be compulsory until 2022, he said.

According to statistics by the Ministry of Labour, Invalids and Social Affairs, the number of foreign employees in the country increased from 63,557 in 2011 to 83,046 in 2016. Most of them came from Asian countries, such as China, the Republic of Korea and Japan, accounting for 73% of the total, followed by European nations (21.6 %), and North America (2.4%).


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