Subjects NOT required to participate in compulsory social insurance

Subjects that are NOT required to participate in compulsory social insurance (including Vietnamese and foreign workers) will be shared by fdiinvietnam.com in this article.

Regulations on compulsory social insurance participation

Compulsory social insurance (SI) is one of the types of insurance that the state requires employers and employees to participate in, with the purpose of ensuring or partially supporting income for employees when they are sick, pregnant, have work accidents or reach retirement age.

When sick, social insurance participants will receive support for medical examination and treatment costs from the health insurance fund and will receive sick leave, maternity leave, leave to take care of sick children, etc. 

For details on the benefits of participating in social insurance, please refer to the article: What benefits do you get when participating in social insurance?

The total compulsory social insurance contribution rate for employees and enterprises is 32% of the monthly salary subject to social insurance contribution, with the following rates:

• Employees pay 10.5%;
• Enterprises pay 21.5%.

Cases of late payment or evasion of mandatory social insurance payment will be subject to administrative penalties according to the provisions of Decree 28/2020/ND-CP. 

In case the employee does not want to participate in social insurance, he/she must send a commitment to confirm not participating in social insurance to the social insurance agency to avoid administrative penalties. The commitment must clearly state the reason and be confirmed by the employer.

Subjects not required to participate in compulsory social insurance

1. For employees who are Vietnamese citizens

Employees who are Vietnamese citizens and do not fall into the following cases are not required to participate in compulsory social insurance, specifically:

• Working under an indefinite-term labor contract, working under a fixed-term labor contract, working under a seasonal labor contract or doing a job with a term of 3 months to less than 12 months (including labor contracts signed between the employer and the legal representative of a person under 15 years old);
• Working under a labor contract with a term from 1 month to less than 3 months;
• Workers are cadres, civil servants, and public employees;
• Officers, non-commissioned officers, soldiers, combatants, workers, students, and people working in key positions working at units under the Ministry of National Defense and the Ministry of Public Security;
• Workers go abroad to work under labor contracts;
• Company, business and cooperative managers receive salary;
• Non-professional salaried workers in communes, wards and towns.

➨ Thus, Vietnamese workers aged 15 and over who are not included in the above-mentioned categories are not required to participate in compulsory social insurance. In that case, workers can choose not to participate in social insurance or can participate in voluntary social insurance.

2. For foreigners working in Vietnam

According to Decree 143/2018/ND-CP, the conditions for paying social insurance for foreigners working in Vietnam are as follows:

• Firstly, foreign citizens have been granted a work permit/practice license/practice certificate by a competent authority in Vietnam;
• Second, foreign citizens have signed an indefinite-term labor contract or a fixed-term labor contract of 1 year or more with an organization or enterprise in Vietnam.

➨ Thus, foreign citizens working in Vietnam who do not fully meet the above two conditions are not subject to compulsory social insurance.

However, if a foreign employee satisfies both of the above conditions and falls into one of the following cases, he/she is not subject to compulsory social insurance, specifically:

• Firstly, foreign workers transferring within an enterprise are technical workers, managers, experts, and executives of foreign enterprises that have a commercial presence (subsidiaries, branches, representative offices) in Vietnam, temporarily transferring within the enterprise to a commercial presence in Vietnam and have been recruited by the foreign enterprise at least 12 months prior;
• Second, foreign workers must reach retirement age (men 60 years old, women 55 years old) according to regulations.

Some questions about cases that do not need to participate in compulsory social insurance

Call us at  0978 578 866 (North)  –  033 9962 333 (Central)  –  033 9962 333 (South)  for support.