Do a company have to pay for the compulsory insurance when hiring an over 60-year-old employee?

Based on the needs of my company and the employee, my company wants to hire some over 60-year-old employees who have a lot of experience in managing the employment. I would like to know if my company is allowed to hire such employees and how the insurance regime is in this case.

FDVN’s opinions:

Thank you for concerning and trusting in FDVN’s legal services. We have studied the law provisions to provide you with our advice. Please kindly see the answer below:

 [1]. Age of retirement:

 It is stipulated in Clause 1 and 3, Article 187 of Labor Code 2012 on the age of retirement that:

“1. An employee who meets the conditions on the period of payment of social insurance stipulated by the law on social insurance is entitled to a pension when reaching full 60 years of age, for males, or full 55 years of age, for females.

…

3. An employee who has high professional and technical qualifications or who performs management work and some other special cases may retire at an age not over 5 years older than the age specified in Clause 1 of this Article.”

Accordingly, female employee’s age of retirement is 55 years old and male employee’s one is 60 years old. In some particular cases, an employee may work for 5 years more if he/she works as a manager. Moreover, in some other special cases, the employee may retire at an age not over 55 for females and 65 for males.

[2]. Insurance regime for elderly employees:

According to Clause 9 Article 123 of the Law on Social Insurance 2014: “Persons on pension, social insurance allowance or monthly allowance who are working undersigned labor contracts shall not be covered by compulsory social insurance.”

According to Clause 3, Article 186 of Labor Code 2012: “For an employee who is not covered by compulsory social insurance, compulsory health insurance, and unemployment insurance, the employer shall simultaneously pay to the employee a wage and an amount which is equivalent to the level of contribution to compulsory social insurance, compulsory health insurance, and unemployment insurance, and annual leave payments in accordance with regulations.”

In case the employee does not meet the conditions for retirement, your company shall continue to pay for the compulsory insurance if he/she is subject to compulsorily participating in compulsory social insurance. In case the employee has participated in social insurance and is currently receiving a pension, your company does not have to pay social insurance. However, in addition to the monthly salary, the employer must pay an amount equivalent to the compulsory social insurance, health insurance, unemployment insurance and annual leave as prescribed.

That is the advice of FDVN to your request, based on the study of legal regulations. Hopefully FDVN's advice will be useful to you.

Legal expert: Ngo Thi My Tram

FDVN Law Firm

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