“KHẮC CHẾ” DOANH NGHIỆP NỢ BẢO HIỂM XÃ HỘI / “RESTRAIN” ENTERPRISES THAT OWE SOCIAL INSURANCE CONTRI

Currently, the issue of enterprises owing social insurance contributions is becoming increasingly widespread, competent authorities need to take serious action to restrain these entities. 

In an interview with the Business Forum, Lawyer Thanh Tra – FDVN Law Firm, a member of the Lawyers Association of Da Nang, considered that enterprises owing employees’ social insurance contributions must be strictly addressed to prevent negative consequences. 

In recent years, the issue of enterprises failing to pay social insurance (SI) contributions for their workers has sparked public concern. In your opinion, what are the main reasons leading to this situation? 

The issue of enterprises failing to pay their employees' social insurance contributions has become a longstanding and widespread problem. This situation raises public concern and significantly impacts the interests of workers. From a legal perspective, several factors contribute to this issue. For many businesses, financial difficulties and increasing pressures force them to prioritize urgent expenses, such as salaries or operational costs and business development, over their obligations to pay social insurance contributions.

SI contributions may not be seen as "immediately processed", which leads to delays being postponed for months. However, some enterprises deliberately neglect their SI paying obligations, showing no regard for employees’ lawful rights and entitlements. 

For employees, in many cases, there is often a lack of awareness about the significance of paying SI contributions on time or uncertainty about how to protect themselves when the enterprises delay such payments. On the other hand, they may feel hesitant due to the complexity and length of legal procedures, which discourages them from firmly standing up for their interests. Therefore, by the time the issue is discovered, the unpaid SI contributions may have accumulated over many months, and maybe the company’s financial situation may no longer be sufficient to pay off the outstanding amount. 

For the state management agency, recently, the enterprises may choose payment methods for SI among monthly, quarterly, or biannual schedules. In case of delayed payment, the SI office shall remind and suspend the disbursement of SI benefits to the employees of the defaulting enterprises. However, these measures are mostly deterrents and are not strong enough to compel businesses to recognize timely SI contributions as a critical and non-negotiable responsibility. 

Then in your viewpoint, what is the “loophole” for enterprises that have continuously owed SI contributions for such a long time, even repeated offenses multiple times? 

Article 122 of the Law on SI 2014 stipulates that employers that violate Clause 1, 2, or 3, Article 17 of this Law for 30 days or more shall not only fully pay the amount not yet paid or paid late and be handled by law but also pay an interest equaling 2 times the average interest rate of investment from the social insurance fund in the preceding year, calculated based on the late-paid amount and late payment period. If they fail to do so, at the request of competent persons, related banks, credit institutions, or state treasuries shall deduct money from the employers’ deposit accounts to pay the amount not yet paid or paid late and the interest thereon to the accounts of social insurance agencies.

According to clause 5, clause 6 of Article 39 of Decree No. 12/2022/ND-CP, the maximum penalties for making late payment of compulsory SI and unemployment insurance premiums are 75,000,000 VND (for individuals) and 150,000,000 VND (for organizations). Meanwhile, the enterprises may be applied remedial measures that force employers to fully pay the outstanding amounts of compulsory SI and unemployment insurance to the SI authority. 

Under the above provisions, even if the enterprises delay paying SI contributions amounting to billions of VND, the maximum administrative penalty remains capped at 150,000,000 VND. The law has currently lacked a mechanism for early detection, warning, and immediate handling of enterprises committing such violations. Penalties are imposed only after inspections or audits conducted by the SI authorities. Furthermore, the SI office does not yet have strong enforcement measures such as asset freezing, asset seizure, or suspension of business operations in cases where enterprises have prolonged SI debts. 

Besides the above loophole, employees can not detect the issue, and are lack of awareness about related regulations to protect personal interests timely manner is one of the loopholes for the enterprises to delay paying SI contributions on time. 

What are the responsibilities and obligations of SI office in restraining enterprises owing the SI contributions? 

According to the regulations of the Law on SI 2014, Decision No. 595/QD-BHXH, the SI office is responsible for the collection and disbursement of SI funds. In addition, it also serves as the competent authority for monitoring, reminding, urging, inspecting, and supervising enterprises to ensure they fulfill their obligations to pay SI contributions by the prescribed deadlines. 

The collection and debt recovery division of the district and provincial SI agencies are responsible for monitoring and urging units to fulfill their SI obligations, specifically monthly, collection officers are required to follow up and urge units to make payments in accordance with regulations; in cases where units owe more than 2 months contributions (for monthly payment method); more than 4 months (for quarterly payments); or more than 7 months (for biannual payments): the collection officer must directly visit the unit to urge payment, prepare a meeting minute regarding the payment of SI, health insurance, unemployment insurance, and occupational accident and disease insurance for employee; send written reminders every 15 days thereafter. 

If after two written reminders, the units still fail to make the required payment, the documents shall be transferred to the Collection and debt enforcement division for further action. Based on the dossier handed over by the Contribution Management Division, the Collection and Debt Enforcement Division shall develop a plan and organize the follow-up process to urge the unit to fulfill its obligations to pay SI, health insurance, unemployment insurance, and insurance for occupational accidents and diseases for employees. 3 months from the date of the official meeting minute, if the units still have not been paid, the Collection and debt enforcement division shall coordinate with the Inspection division to prepare a list of non-compliant units and propose the establishment of an ad hoc inspection team to conduct a specialized inspection by regulations or coordinate with the labor-management authority and the Tax Department to form an interdisciplinary inspection team. 

The Law on SI 2024 (effective from July 1st, 2025) has been amended, supplemented many measures, mechanisms to process the situation of delayed or evaded payment of SI contributions. Specifically, SI offices, upon detecting that an employer is delaying or evading the payment of SI, are responsible for promptly issuing a written notice to urge the employer to fulfill its obligations.  

SI agencies publish on their official electronic portal the information regarding employers that delay or evade payment of compulsory SI and unemployment insurance. At the same time, the agency shall forward such information to relevant state management authorities in charge of SI and unemployment insurance, as well as to competent inspection bodies, for consideration and handling by their respective mandates. 

For enterprises, in case of late payment of SI contributions, enterprises shall pay an interest of 0.03%/day on the arrears to the social insurance and unemployment insurance funds. Therefore, we believe that with the regulations of the new Law on SI, which will take effect from July 1st, 2025, the monitoring and management of insurance payments will be improved. In the near future, businesses will also need to thoroughly understand the regulations to ensure compliance with the SI regulations and avoid legal risks due to accountability violations.   

As we know, the regulations have been clarified and strict for enterprises owing SI contributions. Can you please share more about the current regulations for this issue and what employees can do to ensure their personal interests? 

If an enterprise is late in paying SI contributions, it shall violate one of the prohibited acts at clause 3, Article 17 of the Law on SI 2014. According to clause 6, Article 39 of Decree No. 12/2022/ND-CP stipulating the administrative penalties for violations of failing to pay SO and unemployment insurance premiums for the total number of employees eligible for participation in compulsory SI and unemployment insurance, if not liable to criminal prosecution: A fine equal to 18% to 20% of total amount of compulsory SI and unemployment insurance premiums payable at the date of issuance of violation record, but not exceeding 75,000,000 VND; 

Clause 7, Article 39 of Decree No. 12/2022/ND-CP, for employers evading paying compulsory social insurance and unemployment insurance premiums, if not liable to criminal prosecution: A fine ranging from VND 50,000,000 to VND 75,000,000 (for individuals) or from VND 100,000,000 to VND 150,000,000 (for organizations) shall be imposed. 

In addition to administrative penalties, employers may also be subject to criminal prosecution according to Article 216 of the Criminal Code 2015, amended 2017, regulating the evading of payment of social insurance for workers. 

When there are signs that the employer may be delaying SI contributions, employees can take the following actions to protect themselves. 

First, check the SI contribution and directly contact the enterprise for reasons to require paying the SI contributions on time. Employees can easily check their SI contribution information and health insurance information through SI digital VssID application or the Vietnam Social Security e-transaction portal to see whether the enterprise has paid for SI contributions. If there are signs that the enterprise is delaying or failing to make contributions, the employee can request that the enterprise address the issue and make the SI payments on time. 

Second, in cases where enterprises fail to pay SI contributions on time even that the employees had complained and required it, the employees have the right to complain with SI authorities or Trade Union. SI authorities or Trade Union shall receive, confirm, and process the complaint procedurally and competently. By that time, SI authorities or Trade Union shall require the enterprises to provide related documents for declaration. 

Third, file a lawsuit to request the Court for resolution when interests is violated regarding participation in, contribution to, or enjoyment of SI. 

To increase deterrence against enterprises owing SI contributions, what solutions do you suggest to prevent this situation from persisting within the business community? 

The current regulations have been issued. If there were better mechanisms for inspecting and monitoring the compliance, along with practical implementation of handling violations in a public and transparent manner, the effectiveness of enforcement would improve. Besides, it is necessary to consider applying finance enforcement measures such as deductions from bank accounts, asset seizure, asset auctions to recover owed SI contributions, or temporarily suspending the operations of non-compliant enterprises. 

Employees of enterprises need to be informed and educated about legal knowledge and regulations in order to protect their interests. The processes for filing complaints or initiating lawsuits related to unpaid SI contributions should follow a clear and prompt timeline to avoid prolonged cases of SI debt. 

Besides, it is possible to stipulate more  regulations on supervisory right for employees and trade unions through transparent information disclosure, establishment of hotlines for reporting violations, and support for employees in the procedures of filing complaints and initiating lawsuits in cases where their interests are affected due to unpaid SI contributions. 

The publicity of the list of enterprises owing SI contributions on media platforms, official websites of the SI or business associations will create social pressure, thereby contributing to a change in the mindset and attitude of enterprises. In this matter, employees are often on the weak side, so having specific solutions to address non-compliant enterprises will help ensure better enforcement of SI contributions in practice.