National Assembly Deputies State Reasons Why Many Businesses “Avoid” Paying Social Insurance for Employees

Competent authority to prepare a case for prosecution

On the afternoon of November 2, the National Assembly discussed in groups the draft Law on Social Insurance (amended), the draft law added regulations on the responsibilities of agencies in identifying and managing subjects eligible for social insurance (Article 29); at the same time, many measures and sanctions were amended and supplemented to deal with the situation of late payment and evasion of social insurance payment (Articles 36 and 37).

Specifically regulating the acts of: Late payment of social insurance and evasion of social insurance payment; regulating the payment of an amount equal to 0.03%/day calculated on the amount of late payment and evasion (like in the tax sector).

Regulations on the decision to stop using invoices for employers who are late in paying or evading social insurance payments for 6 months or more, have applied administrative sanctions but still do not pay or do not pay enough of the required social insurance.

The Social Insurance Agency has the right to initiate a lawsuit and propose prosecution in cases showing signs of crime of evading social insurance payment according to the provisions of the Penal Code.

In addition, to ensure the rights of employees, the draft law has added the responsibility of employers to compensate employees if they do not participate or do not participate fully and promptly in compulsory social insurance, causing damage to the legitimate rights and interests of employees.

Dialogue - National Assembly Deputies state why many businesses — Group discussion scene.

Speaking at the group, delegate Nguyen Thi Yen (Ba Ria - Vung Tau delegation) said that the characteristics of Vietnamese workers in the economy have many different factors compared to other countries in the region, especially in the highly labor-intensive industrial sector with short working life. It can be said that when female workers turn 40, their job opportunities are limited or they have to change jobs.

The delegate cited that textile, footwear, seafood processing, and electrical and electronic assembly workers make up a large number. When they reach 40-50 years old, it is very difficult for these workers to continue working.

At that time, although their working age had expired, their retirement age had not yet arrived, so this group needed to withdraw their insurance at once because they could not wait another 5 years, 10 years or longer. In addition, they did not have the conditions to continue paying insurance. Therefore, the delegates proposed that there be more flexible regulations for workers working in the above fields.

Regarding the handling of violations of late payment and evasion of compulsory social insurance payment, delegates proposed adding competent agencies to prepare files to propose prosecution according to the provisions of law.

In particular, the delegate proposed to add that trade unions have the right to propose prosecution or that the front and socio-political organizations, through supervision, also have the right to propose prosecution, not just a social insurance unit.

Very few cases of social insurance evasion are prosecuted.

Regarding the act of evading and delaying payment of social insurance, delegate Huynh Thi Phuc (Ba Ria - Vung Tau delegation) said that the draft law has not yet placed the responsibility of the State management agency in the field of social insurance.

Dialogue - National Assembly deputies state the reasons why many businesses — Delegate Huynh Thi Phuc spoke.

It is necessary to quantify the responsibility of State management agencies and agencies implementing social insurance policies so that the situation of evasion and late payment can be reduced and cannot increase at the same rate as in the past.

According to the delegate, many FDI enterprises, in addition to being late in paying, also evaded paying when the enterprises encountered difficulties in production, leaving hundreds of thousands of workers struggling to enjoy sick leave and maternity policies.

Regarding handling, delegates said that with the current situation, the draft law should not stipulate that if social insurance payment is evaded for 6 months or more, the use of invoices must be stopped.

Because when you have evaded paying insurance, criminal law must be applied, and stopping at the level of invoice suspension will not be enough to deter and affect businesses. Invoice suspension only applies when you are late in paying mandatory insurance.

Speaking, Hai Phong Party Secretary Le Tien Chau stated that the act of evading social insurance payments is a violation of criminal law. However, up to now, the number of prosecutions, investigations, and trials has been almost zero. So how is this act regulated in practice? Where is the bottleneck? Why are there regulations but no action has been taken when evasion is so common?

Delegate Nguyen Thanh Hai - Chief Prosecutor of the High People's Procuracy in Hanoi, Thua Thien Hue delegation pointed out the fact that many businesses circumvent the law to "avoid" paying social insurance for employees.

“We also see that businesses pay social insurance for employees, which costs about 25% of production costs, a number that greatly affects the business's costs. So businesses will find ways to avoid it,” Mr. Hai said, adding that they avoid it by giving employees subsidies and receiving additional benefits instead of including them in their salaries.

Furthermore, when a business intentionally does not pay social insurance, there is now a law, the Criminal Code has stipulated. However, according to Mr. Hai, in the past, there were very few cases of handling, if there were cases of handling, they were criminal cases against legal entities, not against individuals.

"This is also an issue for State agencies to manage. There needs to be a policy to properly manage regulations of businesses that circumvent the law," Mr. Hai emphasized .

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