To the attention of: The Government of Vietnam
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1 MINISTRY OF LABOUR INVALIDS AND SOCIAL AFFAIRS SOCIALIST REPUBLIC OF VIETNAM Independence Freedom - Happiness No.: /TTr-BLDTBXH Hanoi, date month year 2017 DRAFT NO.3 OFFICIAL PROPOSAL For the drafted Decree stipulating in details and guiding the implementation of several articles in the Law on Social Insurance on compulsory social insurance for foreign employees in Vietnam To the attention of: The Government of Vietnam On implementation of the Decree No.112/QD-TTg dated 22 January 2015 by the Prime Minister of the Government of Vietnam on promulgation of the Category and assigning the organization to chair the composition of the document stipulating in details the execution of the Law approved in the Eighth Plenary meeting of the Eighth National Assembly s Congress, after receiving feedbacks from ministries, sector related and upon the verification by the Ministry of Justice at the Document No.../BTP-PLKTDS dated... in month... in 2017, the Ministry of Labors Invalids and Social Affairs (hereafter referred to as MOLISA) submit to the Government the drafted version of the Decree stipulating in details and guiding the implementation of several articles in the Social Insurance Law on the compulsory social insurance for foreign employees in Vietnam as follows: I. RATIONALE FOR PROMULGATION OF THE DECREE On 20 November 2014, at the Eighth Plenary meeting of the Eighth National Assembly s Congress, the Social Insurance Law (amended) was approved and came into effects since 01 January By compared with the Social Insurance Law in 2006, the Law on Social Insurance in 2014 has made a big step ahead in keeping completing the legislation system on social insurance (hereafter referred to as SI) that contributed to translate the guidelines off the Party and goals of the 1
2 State into practices. Of which, the Law on Social Insurance (2014) embedded extended stipulation on compulsory social insurance commencing on 01 January 2018 for people whose holding citizenship other than Vietnamese entering Vietnam for work (foreign employees), details are as follow: Item 2 Article 2 in the Law on Social Insurance (2014) stipulates Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licenses granted by Vietnamese authorities shall be covered by compulsory social insurance under the Government s regulations. - On 22 January 2015, the Decision No.112/QD-TTg was promulgated by the Government s Prime Minister on the issuance of the Category and assignment of organization to chair the composition of the document regulating in details the implementation of the laws approved at the Eighth Plenary meeting of the Eighth National Assembly s Congress and the Ordinance on Environmental Police Forces; accordingly, the MOLISA is to chair, cooperate with Ministry of Justice, Ministry of Home Affairs, Ministry of Finance, Vietnam General Confederation of Labor (VGCL), Vietnam Chamber of Commerce and Industry (VCCI), Vietnam Social Security (VSS) and several of Ministries, sectors related to build and submit to the Government the Decree stipulating in details and guiding the implementation of several articles in the Law on Social Insurance on compulsory SI for the employees who hold citizenship of foreign country and work in Vietnam. - According to the statistical data of the Department of Employment (MOLISA), the number of foreign employees in Vietnam has remarkably increased in the recent past years. During 2011 to 2016, the number of foreign employees in Vietnam increases from 63,557 persons to 83,046 persons. Out of 83,046 foreign employees working in Vietnam in 2016, the female foreign employees accounted for 16.6%. Foreign employees, in terms of their departure countries, mostly come from Asian countries (accounting for 73% of all the foreign employees, most of them from China, South Korea, Japan), European countries (accounting for 21.6%), American countries (accounting for 2.4%), and other countries (accounting for 3%). The number of foreign employees having employment less than 1 year only accounts for 4.4%, that shows the demands on foreign employees and sustainability of this type of employees in Vietnam. 2
3 On one hand, the number of foreign employees entering Vietnam is on the trend of increasing; the guest employees, on the other hand, have also gained continuous increase over the years. According to the statistical data from the Department of overseas employment under the MOLISA, during , of the total 479,592 guest employees, who were successfully sent to work abroad, the number of female guest employees are 167, 266 persons (equivalent to 34.9%). Only in the three consecutive years of 2014, 2015 and 2016, more than 100 thousands of guest employees were sent to work abroad nation-wide. Several markets that embed a large number of Vietnamese employees such as Korea, Japan, Taiwan, Malaysia, Saudi Arabia... According to the regulations of some countries, the fact that Vietnam covers foreign employees with social insurance will also create opportunities for Vietnamese employees, who work abroad, to access to further social insurance system of the host countries (Specifically, with the provisions of the Law on Social Insurance 2014, which covers the Korean employees in Vietnam public pension scheme since the 1 January 2015 made the Vietnamese employees in South Korea, soon in the future, to be also included in the South Korea's national pension system under the Korean National Pension Act). The number of foreign employees come into Vietnam as well as the guest employees of Vietnam to abroad are expected to keep growing thanks to a number of factors such as economic integration at Regional and subnational level, the implementation of free trade agreements, global climate change, the 4th Industrial Revolution, including the implementation of international commitments (ASEAN Economic Community - Movement of skilled labor among ASEAN Member States). Therefore, the studies on formulation and issuance of the Decree which stipulates in details and guides the implementation of a number of articles of the Law on Social Insurance on compulsory social insurance for foreign employees is essential. II. BASES FOR PROPOSED CONTENTS OF THE DECREE 1. International standards on social insurance for migrant employees 3
4 In the context of globalization and the deepening international economic integration, migrant employees are an integral part of the economy. In order to protect the rights of migrant employees, the international community has consistently built and perfected the legal corridor through the promulgation of international conventions, bilateral, multilateral agreements on the protection of rights of migrant employees. Details are as follows The Universal Declaration of Human Rights, 1948 (Article 22, Article 25) and the International Covenant on Economic, Social and Cultural Rights, 1966 (ICESCR) (Article 9) affirmed that social protection and social insurance are the inherent right of everyone regardless of nationality, place of residence, gender, national or ethnic origin, including the right to be protected in the event of illness, disability, unemployment, old-age. - International Convention for the Protection of the Rights of All Migrant Workers and Members of their Family, 1990 (CMW) (Article 54) affirms the right to social security of migrant employees, Migrant employees should be treated equally as citizens in the country of employment. International Convention on the Elimination of All Forms of Racial Discrimination, 1965 (CERD) requires states to prohibit racial segregation and to ensure that everyone is entitled to all the rights and freedoms, without distinction of any kind, in particular as to race, color or national origin and the right to public health, medical care, social security and social services (CERD Article 5 (iv)). - Convention on the Elimination of All Forms of Discrimination Against Women, 1979 (CEDAW) requires countries to eliminate discrimination against women in order to ensure, on the basis of equality between men and women, equal rights to social protection, especially for illness, disability, unemployment, old age retirement. - Regarding International Labor Organization (ILO) s Conventions and Recommendations: + Migration for Employment Convention No. 97 (1949): stipulates the principle of equal treatment of social security (Article 6). + Convention No. 102 (1952) on Social Security (Minimum Standards): sets minimum global standards for 9 schemes of social security. Section XII of 4
5 Convention No. 102 (Article 68) focuses on equal treatment of non-national residents. + Convention No.118 (1962) on Equal Treatment of Social Security: Setting Principles for Equal Treatment between national residents. and non-national residents and Their Families with the 9 Branches of the Convention No C157 - Maintenance of Social Security Rights Convention, 1982 (No. 157) (1982) concerning the Establishment of an International System for the Maintenance of Rights in Social Security: calling for the reservation of entitlements by aggregating periods of insurance in different countries. + R167 - Maintenance of Social Security Rights Recommendation, 1983 (No. 167): introducing in the Annex 1 the Model Provisions for the Conclusion of Bilateral or Multilateral Social Security Instruments. + R202 - Social Protection Floors Recommendation, 2012 (No. 202): setting basic social security guarantees that ensure basic incomes, at least at the national minimum, for the elderly. Migrants and their families need access to these basic social security guarantees in their home country as well as in their home country. - The ASEAN Declaration on Strengthening Social Protection (2013) affirms that "Everyone, especially those who are poor, at risk, persons with disabilities, older people, out-of-school youth, children, migrant employees, and other vulnerable groups, are entitled to have equitable access to social protection that is a basic human right". On the Vietnamese side, the Party affirms in its Documents and Resolutions that "actively and positively in international integration", promotes the implementation of international commitments including International Conventions and Recommendations on social protection that Vietnam has ratified or is currently holding the membership. In fact, Vietnam has step by step improved its legal framework to facilitate and better protect the rights of foreign employees in Vietnam on the basis of complying with international legislation and convention stated in the Constitution in 2013, the Labor Code in 2012, the Law on Health Insurance in 2008 and most recently the Law on Social Insurance in 2014 enacting since 1 January , accordingly from the 1st January 2018 Employees who are foreign citizens 5
6 working in Vietnam with work permits or practice certificates or practice licenses granted by Vietnamese authorities shall be covered by compulsory social insurance under the Government s regulations. 2. Experiences on implementing social insurance for foreign employees of Korea, Japan, Philippines Legislations on Social insurance in the three countries all allow national residents and non-national residents to have equal access to social insurance programs. The Korean National Pensions Act specifies that foreigners are also subject included in its law while the Philippine Social Security Act and Japan Pensioners' Pension Insurance Act cover all employees without the requirements of nationality or residency status. All three countries apply similar provisions and systems on social insurance for citizens and migrant employees Korea 6
7 The National Pension Insurance Act establishes mandatory and voluntary programs includes different pension regimes, disability and survivorship benefits for employees aged The country contains explicit provisions that regulate the application of the law to both citizens 1 and non-citizens 2, but some foreigners may not be subject to the application of the following causes: - Firstly, the National Pension Insurance Act applies the principle of reciprocity by stipulating that the provision of the law applicable to foreign employees "will not apply in cases where the relevant national law of That foreign national does not apply to Korean citizens residing in that country. " That means that the law does not apply to foreigners whose national retirement laws do not apply to Korean employees living and working in that country. To date, the Korean National Pension System has a list of 22 countries of this exclusion category, including Vietnam [1] as currently the social insurance law of Vietnam does not apply to TB patients. Acting is a Korean citizen working in Vietnam. - Secondly, bilateral agreements on social insurance entered between South Korea and the other countries allow certain citizens to only make social insurance payments according to their pension plans (China, Mongolia and Uzbekistan); therefore, the law does not apply to such citizens. - Thirdly, certain migrant employees may not be able to access the program due to their illegal immigration status and visa type Japan 1 Article 6 of the National Pension Insurance Act provides that "All citizens between the ages of 18 and 60 who reside in the South Korea will be covered by the national pension scheme," but do not include government s civil servants, defense personnel, and private school teacher, who are persons governed by other laws and the other persons are defined separately by Presidential Decree. 2 Article 6 of the National Pension Insurance Act provides that "All citizens between the ages of 18 and 60 who reside in the South Korea will be covered by the national pension scheme," but do not include government s civil servants, defense personnel, and private school teacher, who are persons governed by other laws and the other persons are defined separately by Presidential Decree. 7
8 The Employee Retirement Insurance Act (No. 115 of 1954) established a pension insurance scheme for employees to provide social insurance benefits for employees in the case of old-age, disability to work or die and contribute to stabilizing living standards of employees and survivors and improving their wellbeing. This law does not discriminate on the basis of nationality. Anyone who is not eligible for Employee Retirement Insurance, between the ages of 20 and 59, who are residing in Japan must be insured under the National Pension System (basic pension) Philippines The Social Protection Law requires that employees, employers and selfemployed employees register to participate in the social protection system. In addition, the law allows the insured, the Filipino guest-employees and their nonemployed spouse to be registered to participate in the social protection system on a voluntary basis. An employee may continue to contribute to the social insurance fund when they move from the formal sector to the informal sector or go to work abroad as a Filipino working abroad. This law does not discriminate or exclude by nationality; therefore, treating equality between national residents and nonresidential residents. 3. Các nguyên tắc trong xây dựng chính sách BHXH - The principle of "equal in treatment" is laid down in ILO Convention No. 102 on Social Security 1952 and ILO Convention No. 118 of 1962 ensuring equality between domestic and foreign employees in both 9 social insurance schemes. Accordingly, it is recommended that the SI policies applied to the foreign employees of a country should be the same as the SI policies applied to its national-residents. - The principle of "reciprocity", the content of this principle reflects how the law of a country applying its social insurance policy to foreign employees will 3 Social insurance premiums are a fixed amount per month (16,260 yen from April 2016 to March 2017) and participants in this system are eligible for retirement, disability and survivorship as well as being paid once when leaving the country. 8
9 determine its guest citizens to be treated the same in the SI policies of its counterpartner countries. - The principle of "cumulative" in terms of time of SI participation, i.e. the time of participating in social insurance in the country where the worker is traveling and the country where the employee comes to work, should be calculated when considering the conditions about the total duration of participation to enjoy the regime. These are the guiding principles to be taken into account in the preparation of this Decree. In addition, since this is a new policy and is applicable to foreigners, the consideration of organizational performance, feasibility and interconnection Implementation of the social insurance policy with the management of foreign employees in Vietnam will be a factor considered in the selection of appropriate roadmaps and steps towards the principles of national standards and recommendations. 4. Proposed main contents in the Drafted Decree 4.1. About the object applied a) The object regulated by this Decree shall be employees: Pursuant to the stipulation at item 2 Article 2 of the Law on Social Insurance, Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licenses granted by Vietnamese authorities shall be covered by compulsory social insurance under the Government s regulations. Therefore, the Law on Social Insurance regulates 3 groups of foreign employees working in Vietnam subjected to compulsory social insurance including (i) people with work permits; (ii) people with practice certificates; (iii) people with practice licenses granted by Vietnamese authorities According to stipulations at the Decree No. 11/2016/ND-CP dated 03 February 2016 by the Government and the Circular No. 40/2016/TT-BLDTBXH dated 25 October 2016 by the MOLISA guiding the implementation of several articles in the Decree No. 11/2016/ND-CP dated 03 February 2016 by the Government stipulating in details the implementation of several articles in the Labor Code on foreign employees in Vietnam, foreign employees, in order to be 9
10 eligible to work in Vietnam, must be provided with work permit (the subjects include manager, CEO, specialist or a technical worker, the validity of a work permit is limited to a maximum of two years) or subjected to the case of work permit exemption (Department of Labor Invalids, Social Affairs (DOLISA) at provincial level have authorities to rectify the status whereby the foreign employees shall not be granted with work permits, in the time period of maximum of two years). Thus, with the provisions of the Law on Social Insurance and the legislation on management of foreign employees, who do not subject to the issuance of work permits shall have a practice certificates or a practice licenses (lawyer work) issued by a competent Vietnamese authority, shall also be governed by the Law on Social Insurance. According to regulations stated in the current Law on Social Insurance, compulsory social insurance is the type of insurance that is aimed at employees who have an employment relationship and the basis for calculation of social insurance premiums is the contract-based salary of the employees. In fact, foreign employees come to work in Vietnam in many forms such as internal transfers, labor contracts or economic and trade contracts, marketing and introducing for selling services... However, it can be categorized into three main groups: (i) Dispatching employees (including internal moving labor of enterprises and laborers sent to work in Vietnam to perform economic contracts, Trade or investment in Vietnam,...); (Ii) On-site employment (foreign employees are recruited and entered into labor contracts with employers in Vietnam) and (iii) Self-employment Employer. To facilitate the implementation of policies for foreign employees. At the same time, in order to ensure correlation with the regulations applicable to employees who are Vietnamese citizens, the Drafted Decree stipulates that the subjects of application are employees having laboring relationship with employers by laboring contracts (the contract-based employees are currently accounting more than 90% of those who are granted work permits in Vietnam). On the other hand, according to the provisions of the Law on Social Insurance 2014, from the 1 January 2018, Vietnamese employees working under labor contracts of one full month or over are subject to compulsory social insurance. In order to ensure the equality between Vietnamese employees and 10
11 foreign employees, the subjects covered by this Decree are regulated to be foreign employees working in Vietnam under labor contracts of a full one month or over. b) The object regulated by this Decree shall be employers: As regulated at the Item 2 Article 2 of the Decree No. 11/2016/ND-CP dated 03 February 2016 by the Government stipulating in details the implementation of serveral articles of the Labor Code on foreign employees working in Vietnam, the employers of foreign employees should include: - Enterprises operating under the Enterprise Law, the Investment Law or international treaties to which the Socialist Republic of Vietnam is a contracting party; - Foreign or domestic contractors participating in the contract, performance of the contract; - Representative offices, branches of enterprises, agencies and organizations established by competent agencies; - State agencies, political organizations, socio-political organizations, sociopolitical-professional organizations, social organizations, socio-professional organizations; - Foreign non-governmental organizations, international organizations in Vietnam; - Non-profit organizations, which are established as regulated by law; - Offices of foreign projects or international organizations in Vietnam; - The operating office of a foreign investor in a business co-operation contract or of a foreign contractor is registered for operation as regulated by law; - Law-practicing organizations in Vietnam as regulated by law; - Cooperatives and unions of cooperatives set up and operating under the Law on Cooperatives; - Associations and business associations established under the provisions of law; - Household businesses and individuals are allowed to conduct business in accordance with the law. 11
12 However, in order to ensure uniformity and non-omission of the employer, the drafted version of this Decree stipulates that employers who participate in compulsory social insurance under this Decree are subject to regulations as regulated in Item 3, Article 2, of the Law on Social Insurance Social insurance schemes Under the provisions of the Law on Social Insurance, compulsory social insurance consists of five schemes, which are sickness benefits, maternity benefits, Employment Injury Insurance - occupational diseases allowances, pensions and survivor allowances. However, at present, according to the design of the Law on Social Insurance 2014, there is one group of beneficiaries which enjoy all of the five schemes, they are cadres, civil servants, public employees and contract-based laborers. Additionally, there is a group of people subject to compulsory social insurance, but only two regimes applied, which are pensions and survivor allowances, they are non-specialized communal staff and contractbased guest employees (excluding the contract of employment in the bid-winning enterprises, investment abroad), the followers in spouse mode. Therefore, it is obvious that the implementation of compulsory social insurance can be made either with one scheme, several schemes or all of the 5 schemes of compulsory social insurance. From July 1, 2017, the EII- occupational diseases allowances is governed by the Law on Occupational Safety and Health and the Government's Decree No. 37/2016/ND-CP dated 15 May 2016 by the Government stipulating in details and guiding the implementation of several articles of the Law on Occupational Safety and Health on EII - Occupational diseases. Accordingly, it is regulated at Item 7 Article 6 in the Law on Occupational Safety and Health that "Particularly, participation in labor accident and occupational disease insurance shall comply with the regulations of the Government. - Short-term schemes comprise of sub-schemes: sickness benefit, maternity benefit, EII- occupational diseases allowance. These are the schemes associated with the risk-sharing between healthy people with tho who got sickness and accidents. The policy stipulates the payment responsibility belong to employers in order to ensure that the employee is in labor relations; so that the application of these schemes should be prioritized in implementation arrangements. 12
13 - Long-term scheme comprises of two sub-schemes, which are pensions and survivor allowance. These are income-security oriented scheme for employees and their relatives when employees are out of working age or die. Responsibility for contributions is performed by both of the employee and the employer. In the long run, the implementation of this regime together with the implementation of bilateral agreements on social insurance with other countries will ensure the interests of employees regarding the reservation, accumulative SI contribution time into the system of each country (currently the Government also assigns the MOLISA to assume the prime responsibility for, and coordinate with the concerned ministries and sectors in promoting the activities of negotiation with other countries on social insurance. In the near future, when few Agreements have been implemented with other countries, the implementation of this scheme shall be flexible; thereby, allowing employees on returning home-country, if desires, will be able to receive a lump sum of benefits. On the other hand, by include the foreign employees in Vietnam into the entitlements of pensions and survivor alloances, Vietnamese employees who are working in foreign country will have opportunities to access the social insurance system of the country where they work, especially, in those countries where reciprocity principle is applied. Therefore, in order to ensure the interests of foreign employees while working in Vietnam and to ensure equality between Vietnamese and foreign employees, the MOLISA proposes the policy applied to foreigner employees working in Vietnam joining the compulsory social insurance schemes shall be entitled to all 5 sub-schemes, which are sickness benefit, maternity benefit, EIIoccupational diseases allowance, pensions and survivor allowances Accrual time of social insurance participation In accordance with the principles of international law, accrual of time spent on social insurance in both the receiving and the dispatching countries will create conditions for employees to qualify for time in order to qualify for long-term schemes. (Monthly payments of pension). Therefore, in order to implement the long-term schemes for foreign employees, the principle of accrual time must be fulfilled, in order to implement the principle of cumulative and transfer of interests abroad, we must proceed to sign bilateral and multilateral agreements. To realize the actual agreements on 13
14 social insurance, such factors in terms of contribution-benefit levels, the mechanism of payment of rights transfer abroad, additionally, there exists issues regarding capacity, technical and infrastructural concerning points. However, it's a complicated to implement the principle of accrual of time of the employee's social insurance contributions in the context of labor mobility among countries as this involves various factors of infrastructure, calculations of contribution time equivalent, the mechanism of benefit payment or transfer of benefits abroad. Consequently should not be included in the draft decree. In the near future, this principle will only apply to some countries in which Vietnam has a bilateral agreement and in which there is a clause on the cumulative duration of social insurance participation About the process and procedures, profiling application and the settlement of social insurance scheme for foreign employees At present, the Law on Social Insurance 2014 is the document at the highest legislative authority that regulates the social insurance policy; therefore, the provisions on eligible conditions of benefits, time for benefits, levels of benefits as well as the process and procedure of participation in and settlement of social insurance schemes for foreign employees shall be implemented as regulated by law and applied the similar provisions as those are applied to Vietnamese employees. However, to create appropriate conditions and to facilitate foreign employees in the process of participation and enjoyment of social insurance schemes, it is defined in the drafted version of the Decree that the responsibilities of the Minister of Health and the Director General of the Vietnam Social Security in the issuance of forms, records, of which details are as follows: - The Minister of Health shall have to promulgate the form, order and competence for the granting of social insurance leave certificates, the discharge papers and the forms prescribed in the Law on Social Insurance and this Decree; to prescribe the dossiers and order of examining and assessing the working capacity decline level to settle the social insurance scheme for laborers. - The General Director of the Vietnam Social Security is responsible for issuing forms of social insurance record books and forms in English and other 14
15 languages so that the laborers can easily register for participation and benefit from the social insurance schemes stipulated in this Decree. III. CONTENTS IN DEBATES 1. A number of issues through the synthesis of comments from ministries, sectors, localities, enterprises Issues seeked for feedbacks 2.1. About the object applied As regulated at the Item 2, Article 2, Law on Social Insurance Employees who are foreign citizens working in Vietnam with work permits or practice certificates or practice licenses granted by Vietnamese authorities shall be covered by compulsory social insurance under the Government s regulations, there are currently two options for specifying the subjects of application in this Decree, namely a) Option One: Since the Law on Social Insurance stipulates that three groups of subjects participating in compulsory social insurance in Vietnam are groups that have a work permit or a practicing certificate or a practicing certificate; therefore, the object regulated under this Decree is also the worker belonging to one of the three groups mentioned without being limited merely to laborers working under labor contracts. - Evaluation of the option: + Strong points: According to the law, at present, foreign employees entering Vietnam for working in many different forms, of which contract-based working is only one form. Provision as prescribed in Option 1 will involve further more foreign employees to be covered by the compulsory social security regulation, without restricting the SI participation of various objects. + Weakness: In fact, many foreigners working in Vietnam holding work permits, practice certificates and practice licenses without officially entering any contract-based laboring relationship, i.e., self-employed employees, managers, CEOs, experts, technical employees, implementing following the letter of 15
16 appointment of unpaid wages at the unit in the country.,... By regulating that the above-mentioned group of objects subject to provisions of this Decree will cause difficulties during the process of SI contribution collection and management (no bases for calculating social insurance contribution), as SI contribution collection performed by VSS s collecting units is based on laboring contracts and the wage level received by the. If the SI contribution collection, otherwise, is based on work permits, practice certificates or practice license, there will be no such base for collection and in fact the SI contribution collections could not be made by the VSS s collecting units. Besides, the dispatching employees are characterized by the fact that all their interests come from the home country, such as wages, social insurance, medical benefits and other employment; therefore, it is not feasible to enforce compulsory social insurance for the group of employees because they insist on receiving benefits in their home-country. Concurrently, under the provisions of the Law on Social Insurance, employees, who are Vietnamese citizens, must entering labor contract as the condition to be subject to compulsory social insurance (while the other objects are limited in their SI participation only in voluntary social insurance). Therefore, it would be unequal for Vietnamese employees if regulations for foreign employees are not contract-based employment relationship. b) Option Two: - Although the Law on Social Insurance prescribes the applications of compulsory social insurance for three groups of objects; however, social insurance is oriented towards the people in employment relationship; therefore, the provisions applied for the foreign employees will be similar to those applied to Vietnamese employees. Accordingly, as from the 1 January, 2018, employees who are foreigners working in Vietnam belong to one of the three groups mentioned above, and at the same time, must have a labor contract of one full month or over with Vietnamese employer shall be subject to this Decree. - Evaluation of the option: + Strong points: By stipulating that employees who are foreigners, upon labor relations arisen and labor contracts signed and salaries paid at enterprises, 16
17 organizations and individuals in Vietnam are subject to compulsory social insurance will create favorable conditions for agencies in the course of practicing management over the target groups, and at the same time, facilitating the process of organizing the implementation of policies and determining bases for collecting social insurance premiums for the target group; creating equality between the two groups of people: Vietnamese guest employees working abroad and foreign laborers working in Vietnam.. + Weak points: Narrow down the scale of regulated object by compared with the provisions of the Law on Social Insurance. However, it is also suggested that it would be difficult for implementation process if regulating the group of employees who having labor contract of one full month and over. The reasons are, on one hand, due to the fact that it requires certain period of time for authorities to make comparison and proceed the registration documents following procedures. On the other hand, the fact that part of foreign employees working in Vietnam only in 2-3 months and then returning home cause the option of regulations will be difficult to apply. However, the Ministry of Labor - Invalids and Social Affairs (MOLISA) supposed that in order to reach agreement with the working groups, who are Vietnamese citizens, and to ensure that foreign employees be protected against the risks that may arise during the time of their first time working in Vietnam, those people who having laboring relationship of one full month or over should be covered by this Decree About Social Insurance schemes - Option One: Only short-term schemes should be applied to foreign employees working in Vietnam to facilitate the implementation. Short-term SI schemes are the mode of risk sharing, contributing to ensure safety and security, protecting foreign employees in the process of working in Vietnam. At the same time, according to the provisions of the Law on Social Insurance, the minimum contribution period which make the contributor to be eligible to entitled to benefits of monthly pension is 20 years, while the employment of foreign employees working in Vietnam in characterized by short-term, if the long-term regime is prescribed, it will cause the foreign employees to access the monthly pension scheme, reducing the meaning of the policy. 17
18 - Option Two: All of the five sub-schemes in the compulsory social insurance scheme shall be regulated to apply to foreign employees as to ensure foreign employees are fully entitled to and participate in compulsory social insurance schemes as Vietnamese employees. In order to ensure the equal in treatment principle and to protect the interests of foreign employees in working in Vietnam as for Vietnamese employees working abroad, the Ministry of Labor Invalids and Social Affairs request to apply all of the five schemes for foreign employees participating social insurance in Vietnam. Hereby the official proposal is submitted to the Government by the Ministry of Labor Invalids and Social Affairs for the Government s final decision./. Receivers: - As mentioned above; - Government s Prime Minister; - Office of the Government; - Ministry of Finance; - Ministry of Home Affairs; - Ministry of Justice; - Archived: Clerical, DSI (2). MINISTER Dao Ngoc Dung 18
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