What options are there for business owners?

Business owners do not have the characteristics of simple workers, so there needs to be a reasonable mechanism to choose between compulsory social insurance and voluntary social insurance.

The Law on Social Insurance (SI) No. 41/2024/QH15 was passed by the 15th National Assembly at the 7th session on June 29, 2024, and will take effect from July 1, 2025. However, the process of implementing the law and drafting the Decree detailing and guiding the implementation of a number of articles of the SI Law on SI has given rise to many debates, especially the proposal that business owners must participate in compulsory SI.

2 options

According to Minister of Labor, War Invalids and Social Affairs (MOLISA) Dao Ngoc Dung, the 2024 Social Insurance Law is designed to ensure social security in accordance with the provisions of the Constitution and institutionalize the viewpoints, orientations, and reform contents in documents and resolutions of the Party and the State. Along with that, the social insurance system will be developed in a diverse, flexible, multi-layered, modern, and internationally integrated direction, moving towards social insurance coverage for the entire workforce.

The Law consists of 11 chapters and 141 articles, of which 56 articles, clauses and contents are assigned to the Government for detailed regulation. Regarding the compulsory social insurance policy and regime, there are 26 articles, clauses and contents assigned to the Government for detailed regulation.

Compared to the current Social Insurance Law, the 2024 Social Insurance Law has expanded a number of subjects participating in compulsory social insurance, including: business owners of registered business households; part-time workers at the commune, village, and residential group levels; part-time workers; business managers and cooperative managers who do not receive salaries.

In the draft Decree detailing and guiding the implementation of a number of articles of the Social Insurance Law on compulsory social insurance recently, the Ministry of Labor, Invalids and Social Affairs proposed to add the case of employees specified in points a, b, c, i, k, l, Clause 1 and Clause 2, Article 2 of the Social Insurance Law 2024 who are sent to study, intern, work domestically and abroad but still receive salary in the country, they are subject to compulsory social insurance.

In addition, the draft also proposes 2 options to determine the business household owners who must participate in compulsory social insurance. Accordingly, option 1 proposes that the business household owners participating in compulsory social insurance include: Household owners who have registered their business and pay taxes according to the declaration method; household owners who have registered their business but are not subject to the above but have requested to participate in compulsory social insurance. Option 2 proposes that the household owners have registered their business and have requested to participate in compulsory social insurance.

Small traders doing business at Ba Hoa market (Tan Binh district, Ho Chi Minh City) Photo: HOANG TRIEU

Still have many concerns

Regarding the two proposed options for compulsory social insurance payment for business owners, Mr. Tran Van Trieu, Chairman of the District 12 Lawyers Association (HCMC), said that the draft regulation is unreasonable.

According to Mr. Trieu, the 2024 Law on Social Insurance stipulates that business owners are subjects participating in compulsory social insurance, so it is appropriate for business owners who register their business and pay taxes according to the declaration method (in option 1) to pay social insurance. However, although the Law on Social Insurance stipulates that this subject participates in compulsory social insurance according to Government regulations, if it is stipulated that business owners must request to participate in compulsory social insurance (options 1 and 2), they will invisibly become subjects participating in voluntary social insurance - meaning that participation in social insurance depends on the will of the business owner. If they do not participate, the law cannot apply sanctions.

"Both of the above options have not clearly defined whether the participation in social insurance of business owners is mandatory or voluntary, but seem to be "giving birth" to a new form of social insurance, "voluntary compulsory social insurance", which can easily cause problems for both participants and authorities in the process of law enforcement. Therefore, it is only necessary to stipulate that business owners who have registered to pay taxes must participate in compulsory social insurance" - Mr. Trieu proposed.

Lawyer Tran Huu Tin, Head of Tin and Associates Law Firm, acknowledged that business owners do not have labor contracts and in some cases, they are both employers and employees, paying their own salaries. Therefore, business owners do not have the characteristics of simple employees - subjects who must pay compulsory social insurance. Meanwhile, according to Article 31 of the 2024 Social Insurance Law, business owners can choose their salary as the basis for compulsory social insurance, which partly reflects the nature of voluntary social insurance. Therefore, according to Mr. Tin, an open mechanism should be created for this subject to choose to participate between the two forms of compulsory social insurance and voluntary social insurance.

Ms. Nguyen Thi Thao Dung, a human resources officer of a business in Hoc Mon district, Ho Chi Minh City, also said that only business owners who have registered their business and paid taxes should be required to participate in compulsory social insurance, while other cases can participate in voluntary social insurance when needed.

Proposal to record compulsory social insurance payment period

The Ministry of Labor, Invalids and Social Affairs is drafting a Resolution of the National Assembly Standing Committee on recording the compulsory social insurance payment period of business owners who participated before the effective date of the Social Insurance Law 2024.

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung said that before the Law on Social Insurance 2024 came into effect, the provisions of the law as well as the Law on Social Insurance 2006 and 2014 did not stipulate that business owners were subject to compulsory social insurance. However, from 2003 to present, local social insurance agencies have collected compulsory social insurance from business owners as well as paid social insurance benefits. As of May 31, 2023, 3,567 business owners participated in compulsory social insurance; the amount paid to the Social Insurance Fund was about 113 billion VND...

Therefore, in the draft resolution, the Ministry of Labor, Invalids and Social Affairs proposed to record the period of compulsory social insurance payment before July 1, 2025 of the business household owner as a basis for settling the social insurance regime according to the provisions of the Law on Social Insurance.

Source: https://nld.com.vn/dong-bhxh-bat-buoc-phuong-an-nao-cho-chu-ho-kinh-doanh-19624120720565225.htm