Name of recommendations: 7 contents of the drafted decree on participation in compulsory social insurance of foreign employees

Status: Has not been responded

Recommended by units: Japanese Business Association in Vietnam

Official letter: 2360/PTM - VP, dated: 2017-09-21

Recommended contents:

The contents of the drafted decree on compulsory social insurance are as follows:

1. 1. On the definition of "beneficiaries of social insurance", the Japanese Business Association would like you to clarify the way to unify the statement with the Law on Social Insurance, as well as ensure the integrity and suitable to the content of this Decree is in line with the law.
2. 2. On the scope of exclusion from the participants of social insurance, ① due to "internal mobility within enterprises  (secondment)" can not distinguish on the work permit, so we would like to include in content of the decree "assessment and confirmation by whether or not to decide secondment from the place of secondment," and we also wish ② employees are participating in social insurance premiums in foreign countries that included Japan, shall be not subject to target group who participates in social insurance.
3. 3. For the social insurance regime that is applicable to foreign employees, it needs only pay benefits for sickness, maternity, occupational accidents, occupational diseases, and Japanese Business Associations expects in case of application of the "pension and death allowance regime", the application shall be made after signing the social insurance agreement. In addition, we also expect that even after the signing of a social insurance agreement, employees "who have moved within the enterprise (secondee)" shall not be subject to the social insurance participation’s regime of Vietnam.
4. Similarly, in order to distinguish foreign employees who applied for health insurance, it shall be marked "Assessment and verification by whether or not a decision of secondment has been made from the place of secondment," and the Japan Business Association also would like related agencies to issue official documents such as the decree that if employees are participating in overseas health insurance, they shall not be eligible for health insurance.
5.  On the definition of "subjects who participate in social insurance"
6. Clause 1, Article 2 of the Law on Social Insurance has provided for "subjects who participate in compulsory social insurance", but this does not include foreign employees. For foreign employees, Clause 2, Article 2 of this Law is being inscribed as follows: "Foreign employees may participate in compulsory social insurance according to the Government's regulations".

In addition, Clause 1, Article 2 of the drafted decree has stated that "among foreigners working in Vietnam as follows, employees who work under definite labor contracts or labor contracts unspecified duration, seasonal labor contract or a specific job with a term of 1 month or more are subject to compulsory social insurance when one of the papers is issued by the competent body “are participated" used in the Law on Social Insurance, and "applicable" as used in draft No 4 of this Decree, use of the terms differently and if they are explained in different meaning, We think it would be a violation of the Law on the Promulgation of Legal Documents (Law No. 80/2015 / QH13).

In order to maintain the consistency and consistency of laws and decrees, the Japanese Business Association think that the draft of decree should use the term "participatory" as in the Law on social insurance, and need to ensure proper integrity between laws and decrees. In other word, Clause 1, Article 2 should be defined as follows:

 "Article 2. Subjects of application

1. Employees who are foreigners work under indefinite-term labor contracts or labor contracts with definite terms and / or labor contracts on a seasonal basis or for a fixed job with a term of full 01 month or more with employers in Vietnam are participated in compulsory social insurance when having one of the following papers issued by competent Vietnamese agencies:

In the draft No. 4 of this decree, in Item a, Clause 2, Article 2, it is added that the mobilization within the enterprises (secondment) is not subject to compulsory insurance. We have been explained by MOLISA that "The definition of internal mobility in enterprises (secondment) is pursuant to Decree No. 11/2016 / ND-CP." The definition of "internal mobility (secondment)" is contained in paragraph 1 of Article 3 of this Decree. However, when distinguishing between "internal enterprises (secondment)" there are issues as follows.

• • In the work permit there is no column written "mobility within the enterprise (secondment)", so it is impossible to distinguish by work permit. In the application for a work permit, there is a classification column, but even when moving within the enterprise (secondment), many cases receive instructions from administrative agencies that the proposal under the section " a) Execution of labor contracts rather than under the part" b) Internal mobility "in Article 1, Article 2 of the Decree
• On tax issues, in many cases, even though the mobility inside the enterprise (secondment), employees are forced to sign a labor contract with a company / organization in Vietnam which is the Secondment Company/dispatching to. It means it is not possible to assess internal mobility within enterprise if it is based on whether or not there is a labor contract.
• Even if the place of secondment (company / organization in Japan) and the place of dispatching (company / organization of Vietnam) are not related in terms of capital, there are many cases where employees are still working at the place of dispatch in Japan and sent to work in Vietnam. (Example: An employee is sent to work as a school teacher, or sent to a cooperative company).In addition, if the employee has experience working at a company / organization in Japan less than 1 year, it will be sent to the company / organization in Vietnam, will not be suitable for "intra mobilization within enterprise (secondment)" as stipulated in Decree 11.. (For example, where a company / organization in Japan recruited experts who have retired from another company and transferred to other company in their corporation in Vietnam). In these cases, employees shall sign labor contracts with both Vietnam and Japan and participate in social insurance in Japan. It means, even if the case is not consistent with the "mobilization within the enterprise" in Decree No. 11, there are cases where employees are forced to pay social insurance twice. In particular, we are concerned that experts who are supporting the development of Vietnam are required to pay a double fee.

For the purpose of "mobility within the enterprise (secondment)" when issuing a work permit, and the criterion of becoming a participant in social insurance, for different purposes, it is not compulsory to be the same. In order to resolve the above problem, when distinguishing the mobility between "intra-enterprise (secondment)", evaluation and confirmation by whether or not making a secondment decision is notarized is the most appropriate.

In addition, even people recruited in Vietnam may also be participated in voluntary social insurance in Japan, and even Japanese people who are employed in the Vietnamese company, in many cases, they are taking part in voluntary social insurance in Japan. In this case the employee shall be paid social insurance premium twice. Therefore, we would like these people who shall not subject to the group participate in social insurance in Vietnam so that this does not become the reason why elite foreigners want to support the development of Vietnam hesitated to work in Vietnam.

The Japanese Business Association recommends MOLISA to consider the two points mentioned above, and amend the following sentence of Clause 2, Article 4 of this draft Decree No. 4. In addition, we would also like you to disseminate and agree to the applicable administrative authorities.

 “2. Employees are specified in Clause 1 of this Article, whether or not they sign labor contracts in Vietnam, if belonging to one of the following cases, they do not belong to subjects of compulsory social insurance.

1. a) In case of mobility within the enterprises as stipulated in the Clause 1, Article 3 of Decree No. 11/2016 / NĐ-CP, and other cases where employees are transferred from foreign enterprises, agencies and organizations according to the decision on mobilization by foreign enterprises, agencies and organizations;
2. b) Where employees are participating in compulsory social insurance in cases there are many labor contracts in Vietnam. Particularly involved in the labor accident fund, occupational diseases, employers must contribute to employees in all labor contracts.
3. c) In cases where employees are participating in insurance of the same category as compulsory social insurance in foreign countries. "

Applicable regime:

For the type of social insurance that is applicable to short-term residents in Vietnam, there is no need for a "retirement or survivor's pension", which I think only applies to benefits paid for illness, maternity, labor accidents, occupational diseases is reasonable. In the case of the application of the "pension and death allowance" regime, will apply after signing the social insurance agreement.

In addition, even after entering into a social insurance agreement, employees who "mobilize within the enterprise (secondment)" continue to participate in social insurance in his country and pay premiums. We expect that this object shall not belong to the social insurance scheme of Vietnam.

To issue official documents on health insurance.

Even the content of Article 12 of the Law on Health Insurance (No. 46/2014 / QH13) has similar problems, and the status of the secondment / sending assignment from the foreign company / whether or not they are participating in health insurance shall be different depending on competent administrative agency or officer in charge of administrative affairs.

We would like you to issue a formal document stating that " employees mobilize within the enterprises are not covered by health insurance", "When distinguishing internal movement (secondment), assessment and confirmation by whether or not the secondment decisions are notarized, " in case that employees have participated in the same type of health insurance overseas, they shall not belong to subjects of health insurance in Vietnam “.