Vietnam Labour Law Update (January 2015)

I. GUIDELINES FROM SOCIAL INSURANCE DEPARTMENTS RELATED TO CHANGES IN POLICY ON CONTRIBUTIONS TO SHUI FROM 01 JANUARY 2015

In our December 2014 E-Newsletter, we mentioned about the salary levels for UI contributions according to the Law on Employment and the official letter from Binh Duong Province Social Insurance Department.

On 17 December 2014, the Ho Chi Minh City Social Insurance Department issued official letter no. 4064/BHXH-THU (OL 4064) which provided detailed guidelines for business enterprises in Ho Chi Minh City.

On 30 December 2014, the Hanoi City Social Insurance Department also issued the official letter no. 3444/BHXH-PT-CST (OL 3444) providing guidelines for the Social Insurance Departments of Districts and Towns within Hanoi City. 

These two OLs provided instructions on contributing SHUI from 01 January 2015; these include some changes related to those participating in UI and the salary levels for UI contribution as set out below:

1/ Who will participate in compulsory SHUI:

Laborers who have a labor contract with a term of three months or more are subject to compulsory SHUI contributions (regardless of the number of laborers used by the entity/organization).

Given that, in cases where an entity/organization has been using laborers who have labor contracts with a term of three months or more before January 2015 and these laborers are still working for the entity/organization and have not yet contributed to UI, the entity/organization needs to register UI for them from January 2015.

2/ Salary levels for calculating contributions to Social, Health and Unemployment Insurance (SHUI): 

Where employees receive a salary defined by employers, the basis for contribution to SHUI is the monthly basic salary specified in the labor contract.

– The minimum monthly salary to calculate the contribution to SHI is the minimum regional salary and the maximum monthly salary to calculate the contribution rate to SHI is 20 times the basic salary (i.e. the common minimum salary). 

– The minimum monthly salary to calculate contribution to UI is the minimum regional salary and the maximum monthly salary to calculate the contribution to UI is 20 times the minimum regional salary.

3/ Other notes related to the responsibility for making contributions to UI:

• For employees on maternity leave, the HI contribution rate is 4.5% of monthly salary and is paid by the Social Insurance Authority.
• Employees on sick leave per SI regulations for more than 14 days in a month do not have to contribute to HI but still enjoy HI benefits.
• Employees who are studying abroad or on a prolonged business trip abroad do not have to contribute to HI during the period they are abroad. That period is calculated as an HI contribution period until they are back to work in Vietnam, as decided by the organization.
• During the period of working abroad, employees do not have to contribute HI. If they join the HI scheme within 60 days of the date of coming back to Vietnam, both the whole period when they working abroad and the period from when they came back Vietnam until they join the HI scheme is counted as a continuous HI contribution period.

II. HEALTH INSURANCE FOR EMPLOYEES’ DEPENDANTS ACCORDING TO HEALTH INSURANCE LAW APPLIED FROM 01 JANUARY 2015

According to Health Insurance Law, those persons who join HI from 01 January 2015 will be defined as falling within one of the categories of group listed below:

1. Group of employers and employees, which includes:

• Employees who have indefinite labor contracts, or labor contracts of more than 3 months; managers of organizations; cadres, civil servants, public employees;
• Non-specialized employees in Districts, Towns as defined by law.

2. Group paid by the Social Insurance Authority

3. Group paid by the State Budget.

4. Group supported by the State Budget.

5. Group of those who join HI as a household including family members, except those who belong to groups 1, 2, 3 and 4 above.

Thus, according to this new regulation from 2015, employees’ dependants belong to the group who join health insurance as a household.

Also, according to OL 3444 of Hanoi City SI Department, any employees’ dependants who had already joined HI in the year 2014, will join HI as a householdwith effect from 01 January 2015.

A household joining HI includes all members in the household registration book or temporary residence book. In cases where a household has any members who already have HI cards from any other group, the household must declare clearlywhich group(s) those members belong to. 

The contribution rates of all household members are as follows: 1st member contributes 4.5% of basic salary; 2nd, 3rd, 4th contribute in turn 70%, 60%, 50% of 1st member’s rate; 5th member onwards contributes 40% of 1st member’s rate.

For those joining for the 1st time or after a break of more than 3 months in a fiscal year, HI cards will become valid after 30 days from the contribution date.

Talentnet Corporation