Name of recommendations: A recommendation on consideration of declining the rate of social insurance down to 4%, (returning to the level of social insurance premium in 2010 is 16% for enterprises + 6% for employees) since January 2018

Status: Has not been responded

Recommended by units: The Vietnam Association of Seafood Exporters and Producers (VASEP)

Official letter: No 0139A/PTM - VP, dated: 2018-01-23

Recommended contents:

Reasons for recommendation: The reduction of social insurance cpremiums of enterprises and employees since 2018 is an urgent and indispensable objective, due to the following reasons:

1. Social insurance premiums (including retirement insurance, health insurance, unemployment insurance) in Vietnam are the highest in the region:, when it reaches 32% of the monthly salary (22% for employers, 10% for employees) that is not to mention 3% of union fee (2% for employers, 1% for employees). Meanwhile, in the same region, Malaysia only pay 13% of monthly salary for social insurance, , Philippines is 10%, Indonesia  is 8% and Thailand is 5%, ....
2.  
2. Social insurance premiums will ensure harmony between enterprises and employees

For enterprises, especially seafood enterprises, employees are a valuable asset, as it is the basis and foundation for survival and development in the context of competition today. The benefits of enterprises and employees must be harmonious. In the context of fierce competition, enterprises must reduce costs to survive. Government and other ministries have been helping businesses in the past, but labor costs are increasing as labor productivity increases. Businesses want to pay social insurance, so that when employees leave jobs or retirement, the regime is less difficult in life, but first of all, how production and business must be good & survive. Therefore, in the transitional period, there is still need a strong pull (and the leading is the State) to help employees & users to come together in a harmonious and natural way. (Avoiding conflict / paying prices by againsting and causing damage for both enterprises and society).

1. The seven cost burdens are on the shoulders of enterprises since 2018, causing the competitiveness of enterprises declined,  particularly:

• Regional minimum wage increase, it will increase the cost of salaries in general.

• Regional minimum wage increases, it will increase the cost of compulsory social insurance

• Regional minimum wage increases it will increase the cost to pay for a union fee

• Subjects to pay expanded social insurance n from 2018 (employees who sign labor contracts from 01 month or more also pay social insurance).

• To expand the income to be used as a basis for paying social insurance premiums (social insurance premium to total income) from 2018

• The health insurance premium for the family is reduced by the number of people participating in health insurance but the health insurance premiums for businesses still remain 100%, not be reduced by the number of participants.

• From 2018, premiums paid by social insurance will be calculated on the total income list rather than on the basic salary level of the employees as before