New decree issued on compulsory social insurance for foreign workers

The Government has officially issued a decree stipulating the details of compulsory social insurance for foreign employees in Vietnam, which will take effect on December 1 this year.

The Decree 143/2018/NĐ-CP also outlines a guide as to how to enforce the Law on Social Insurance.

Under the decree, foreigners working in Vietnam with a work permit, practice certificate, or practice license granted by competent Vietnamese authorities and under definite-term labour contracts or contracts with a term of one full year and over shall be subject to compulsory social insurance.

They shall be entitled to the following social insurance regimes – sickness, maternity, workplace accident, occupational disease, retirement, and survivor allowance.

Those temporarily transferred from mother companies abroad to subsidiary firms in Vietnam or reaching retirement age shall not be subject to the compulsory social insurance scheme.

This exclusion is aimed at addressing the concern of foreign enterprises over the duplication of social insurance payments.

According to Deputy Head of the National Assembly’s Social Affairs Committee Bui Sy Loi, the compulsory social insurance for foreign workers is necessary to ensure fairness between Vietnamese and foreigners and between enterprises which only use domestic employees and those that employ foreigners.

According to statistics by the Ministry of Labour, Invalids and Social Affairs, the number of foreign employees in Vietnam increased from 63,557 in 2011 to 83,046 in 2016. They mostly come from Asian countries, accounting for 73% of the total, followed by European nations (21.6%) and American countries (2.4%).

Source: NDO