Would you describe the current unemployment insurance picture in HCM City ?

Payment of unemployment insurance benefits is now a practice in HCM City. We have been coordinating closely with the city’s Department of Labour, Invalids and Social Affairs as well as job promotion centres to handle the work.

However, some problems have persisted with social insurance payments. For instance, firms that don’t pay attention to the payment of unemployment insurance for their labourers or which experience frequent changes in manpower make it difficult for us to get a grip on the social insurance payment situation at enterprises

What is the social insurance payment situation in HCM City ?

More than 1.1 million labourers currently make payment to the HCM City social security fund with 74 per cent coming from non-state and foreign invested enterprises (FIEs). However, as of March 31, 2012, 1,137 FIEs reportedly owed the city’s social insurance fund one or more month in payments. Of these companies, 81 were found to owe over 12 months in payments to the fund which means around VND20 billion ($952,000). This is worrisome because this practice has been on the rise, and that might be partly due to light sanction measures.

Could you shine more light on the current sanction measures might be ?

Sanctions levied on administrative violations in the social and unemployment insurance domain are regulated by governmental Decree 86/2010/ND-CP of August 13, 2010. However, the current sanction measures are light and so businesses are late or they evade paying. Social insurance, health and unemployment insurance must be paid in full. The penalty for late payment is around 10 per cent per year. They may also be fined at most VND30 million ($1,430) for administrative violations in the social insurance domain.

How should sanction measures be revised to abate violations ?

Businesses are also late in paying taxes. However, in the case of taxes, violators have to pay a penalty interest of around 18 per cent per year for late repayment amount. In addition, violators might have to pay a fine that is double or triple the owed amount.

Violators in the social insurance domain should be subject to at least the same level of sanctions that are applied to violators in the tax area since social insurance directly affects social order and security.

Vietnam Investment Review - April 20, 2012