Công văn 5251/BHXH-QLT

To: Employers in Hanoi

For the purpose of implementing Decree No.143/2018/ND-CP dated October 15, 2018 of the Government on elaboration of the Law on Social Insurance and the Law on Occupational Safety and Health regarding compulsory social insurance for employees who are foreign nationals working in Vietnam; Official Dispatch No.5329/UBND-KGVX dated October 31, 2018 of Hanoi People’s Committee. Below are instructions from Hanoi Social Security:

1. Participants in social insurance:

1.1. From December 01, 2018, employees who are foreign nationals working in Vietnam shall be required to participate in compulsory social insurance (SI) if they obtain work permits, practicing certificates or practicing licenses issued by Vietnamese competent authorities, indefinite-term labor contracts or fixed-term labor contracts valid for at least one year with employers in Vietnam.

1.2. Employees shall be excluded from participation in the compulsory SI program if:

they are intra-company transferees as stipulated in clause 1 Article 3 of the Government’s Decree No.11/2016/ND-CP dated February 3, 2016 or they reach retirement age under regulations in Clause 1 Article 187 of the Labor Code.

1.3. Employees who enter into more than one labor contract with more than one employer and are required to participate in the compulsory SI program shall only pay the social insurance premium for the first labor contract while employers shall contribute to funds for occupational additional and occupational disease insurance according to the each contract signed.

2. SI contribution rates:

2.1. From December 01, 2018

The employer shall, on a monthly basis, make a SI contribution in proportion to the employee’s payroll in the SI payment month as follows:

+ 3% of the aforesaid payroll paid into the sickness and maternity fund

+ 0.5% of the aforesaid payroll paid into the occupational accident and occupational disease fund

2.2. From January 01, 2022

- The employer shall, on a monthly basis, make a SI contribution in proportion to the employee’s payroll in the SI payment month as follows:

+ 3% of the aforesaid payroll paid into the sickness and maternity fund

+ 0.5% of the aforesaid payroll paid into the occupational accident and occupational disease fund

+ 14% of the aforesaid payroll paid into the retirement and survivorship allowance fund

- The employer shall, on a monthly basis, pay 8% of the employee’s payroll to the retirement and survivorship allowance fund.

The monthly salary used to make SI contribution is the statutory pay rate, salary-based allowances and other additional allowances under law provisions on labor. In case the monthly salary is 20 times as high as the statutory pay rate, the monthly salary used to make SI contribution shall be 20 times as high as the statutory pay rate.

3. SI benefits:

3.1 From December 01, 2018

Employees who are foreign nationals and participate in social insurance shall be entitled to the following compulsory SI benefits: sickness and maternity benefits as regulated by the Law on Social Insurance and occupational accident and occupational disease benefits as regulated by the Law on Occupational Safety and Health and Decree No.37/2016/ND-CP.

3.2 From January 01, 2022

In addition to SI benefits specified in item 3.1, employees shall be entitled to the following benefits:

- Retirement and survivorship allowance as regulated by the Law on Social Insurance

- One-off SI benefit payout shall be made under regulations in Clause 6 Article 9 of Decree No.143/2018/ND-CP.

3.3. Transfer of SI benefits for beneficiaries who have been on monthly retirement pensions or SI benefits that no longer resides in Vietnam:

Beneficiaries who have been on monthly retirement pensions or SI benefits but no longer reside in Vietnam may authorize another person to receive such retirement pension or SI allowances. Employees may receive one-off SI benefit payout if they wish so.

4. Document procedures

For foreign nationals that are required to participate in the SI program as specified in Clause 1 hereof, the employer shall prepare documents as prescribed in Article 23 Section 1 Chapter III regarding procedures for collections of premiums for SI, health insurance, unemployment insurance, accident insurance and occupational accident and occupational disease insurance; mange SI books and health insurance cards issued together with Decision No.595/QD-BHXH dated April 14. 2017 of Director General of Vietnam Social Security and Form No.TK1-TS issued together with Decision No. 888/QD-BHXH dated July 16, 2018 of Director General of Vietnam Social Insurance, including:

4.1. With regard to employees

- The declaration form for participation in or adjustment to information about participation in SI and health insurance program (Form No.TK1-TS issued together with Decision No.888/QD-BHXH) (applicable to participants who have not received a SI code or change their registration information).

4.2. With regard to employers

- The declaration form for participation in or adjustment to information about participation in SI and health insurance program (Form No.TK3-TS issued together with Decision No.595/QD-BHXH).)

- The list of employees participating in SI, health insurance, accident insurance, occupational accident and occupational disease insurance (Form No.D02-TS issued together with Decision No.595/QD-BHXH) which provides increases in number of SI participants.

In case the foreign employee is required to participate in both the compulsory SI and health insurance program, the employer shall be granted an IC code for participation in SI program. In addition, the employer whose foreign employees are only required to participate in the health insurance program shall be granted a management code of BW as before. In case the employer makes a payment document for more than one code (YN, IC, BW), the payment amount for each code must be clearly specified in the part of payment order execution.

Employers shall make matching SI and health insurance contributions to foreign employees in conformity with law provisions. Should any difficulty or question arise during implementation, entities concerned shall inform the Hanoi Social Security (through Department of Collection Management) for handling purpose./.