The Government has officially issued a decree stipulating in details and guiding the enforcement of the Law on Social Insurance on compulsory social insurance for foreign employees in Vietnam.
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 vice chairman 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 (MoLISA), the number of foreign employees in Vietnam increased from 63,557 in 2011 to 83,046 in 2016. They mostly come from Asian countries like China, the Republic of Korea and Japan, accounting for 73% of the total, followed by European nations (21.6%), American countries (2.4%).
Those having employment less than one year only makes up 4.4%, which manifests the local demand on and sustainability of foreign workers in the country.
Meanwhile, the number of Vietnamese employees sent to work abroad is on a rise. The MoLISA estimated that nearly 479,600 guest workers departed to work in foreign countries from 2011 – 2015.
Based on regulations in some nations, the fact that Vietnam covers foreign employees with social insurance will create opportunities for Vietnamese workers abroad to get access to social insurance schemes of the nations they are working in.