Công văn 2447/LDTBXH-BHXH

To: Vietnam Social Security

In reply to the Official Dispatch No. 2409/BHXH-BT dated June 13, 2011 on difficulties arising during implementation of the Law on Social insurance, the Ministry of Labor, War Invalids and Social Affairs provides certain guidelines as follows:

1. Regarding implementation of Clause 6 Section D of Circular No. 03/2007/TT-BLDTBXH dated January 30, 2007 of the Ministry of Labor, War Invalids and Social Affairs (hereinafter referred to as 03/2007/TT-BLDTBXH):

- If a state-owned company is transformed to a joint-stock company, a single-member state-owned limited liability company or a multiple-member state-owned limited liability company in order to apply average monthly salary as the basis for social insurance contribution as prescribed in Clause 4 Section IV Part B of Circular No. 03/2007/TT-BLDTBXH , it shall fully comply with Clause 6 Section D of Circular No. 03/2007/TT-BLDTBXH from the transformation. The time limit for registration of its system of pay scale and payroll with labor authorities shall be specified in Circular No. 28/2007/TT-BLDTBXH dated December 5, 2007 of the Ministry of Labor, War Invalids and Social Affairs until new regulations are imposed.

- Any joint-stock company, a single-member state-owned limited liability company or a multiple-member state-owned limited liability company transformed from a state-owned company shall fully comply with Clause 6 Section D of Circular No. 03/2007/TT-BLDTBXH and be ranked in accordance with Joint Circular No. 23/2005/TTLT-BLDTBXH-BTC dated August 31, 2005 of the Ministry of Labor, War Invalids and Social Affairs and the Ministry of Finance, and employees in such company shall apply the average monthly salary as the basis for social insurance payment prescribed in Clause 4 Section IV Part B of Circular No. 03/2007/TT-BLDTBXH until new regulations are imposed.

- If the joint-stock company, single-member state-owned limited liability company or multiple-member state-owned limited liability company transformed from a state-owned company incorporates joint-stock companies which do independent accounting thereafter, these joint-stock companies may not apply Clause 6 Section D of Circular No. 03/2007/TT-BLDTBXH .

- If any state-owned company is transformed to a joint-stock company, a single-member state-owned limited liability company or a multiple-member state-owned limited liability company but fails to fully comply with Clause 6 Section D of Circular No. 03/2007/TT-BLDTBXH , its employees shall apply average monthly salary as the basis for social insurance payment as prescribed in Clause 6 Section IV Part B of Circular No. 03/2007/TT-BLDTBXH for determination of social insurance payout.

2. Regarding social insurance collection:

- Social security agencies, subject to the Law on Social insurance, have responsibilities for collecting social insurance contributions. Accordingly, social security agencies have power and responsibilities for collecting social insurance arrears from those who are subject to compulsory social insurance but have overdue or outstanding payments on social insurance.

- As for the above-mentioned case, in order to collect arrears on social insurance, an amount of total overdue and outstanding payments plus an interest on such overdue and outstanding payments according to the interest rate of investments from Social Insurance Fund in the year shall be charged. The contribution rate of compulsory social insurance shall apply corresponding regulations of law on social insurance for each period.

3. If an employee has his/her probationary period stated in a labor contract which is subject to compulsory social insurance, the employer and such employee must make contributions to the compulsory social insurance for the probationary period. In this case, the amount of salary/wage stated in the labor contract shall be the amount of salary/wage as the basis for social insurance contribution in the probationary period.

4. An employee who concludes a labor contract for at least 3 months and an indefinite-term labor contract as prescribed in law on labor with a regulatory body or public sector entity shall be subject to compulsory social insurance as per the law. The amount of salary/wage as the basis for social insurance contribution shall depend on the pay regime that the regulatory body or regulatory body applies to the employee, which is specified in the labor contract.