Labour Regulations Update in June 2023

I. Decision No. 948/QD-BHXH of the General Director of Vietnam Social Insurance on insurance profession

On 5 June 2023, Vietnam Social Insurance issued Decision No. 948/QD-BHXH (“Decision 948”) amending and supplementing a number of articles and procedures for collecting social insurance and insurance health care, unemployment insurance, occupational accident and occupational disease insurance; manage social insurance books and health insurance cards issued under Decision No. 559/QĐ-BHXH dated 14 April 2017 and Decision No. 490/QĐ-BHXH dated 28 March 2023 of the General Director of Vietnam Social Insurance.

One of the contents of Decision 948 is to abolish Item a, Item b, Point 2.6, Clause 2, Article 6 of Decision No. 595/QĐ-BHXH dated 14 April 2017 of the General Director of Vietnam Social Insurance. Accordingly, the following provisions (Item a, b) on the monthly salary on which compulsory social insurance premiums are based for employees who perform jobs or titles that require trained or apprenticed workers (including vocational training by enterprises) and Employees who do jobs or titles with heavy, hazardous and dangerous working conditions will be abolished:

“2.6. The monthly salary for compulsory social insurance contribution specified in this Clause must not be lower than the regional minimum salary at the time of contribution for employees who perform the simplest jobs or titles under normal working conditions:

• Employees who perform jobs or titles that require trained or apprenticed workers (including those trained by enterprises themselves) must be at least 7% higher than the regional minimum wage.
• Employees who perform jobs or titles with heavy, hazardous or dangerous working conditions must be at least 5% higher; a job or title with particularly heavy, hazardous or dangerous working conditions must be at least 7% higher than the salary of a job or title of equivalent complexity, working in normal working conditions.”

Decision 948 takes effect from 1 April 2023.

II. Official letter No. 2252/BHXH-CĐ of social insurance of Ho Chi Minh City on statutory insurance settlement

On 22 May 2023, Ho Chi Minh City Social Insurance issued Official Letter No. 2252/BHXH-CĐ (“Official Letter 2252”) to the Employers in Ho Chi Minh City on the settlement of sickness, maternity, convalescence and health rehabilitation regimes.

Accordingly, for cases where the employee is paid with salary during the period of leave due to illness, maternity or convalescence, the employer is requested not to submit the social insurance claim for sickness, maternity, convalescence and health rehabilitation benefits.

The Social Insurance Authority will recover the paid claim for the above cases. The employer is responsible for fully recovering the money from the employee and returning it to the Social Insurance fund.

Because social insurance is a guarantee to replace or partially compensate an employee’s income when he or she has a reduction or loss of income due to illness, maternity, work accident, occupational disease, or out of working age or die, on the basis of contributing to the social insurance fund, We recommend that the Clients note such regulations and review the situation of the Company to avoid claiming payment from the social insurance authority and paying salary to the employees in the same period when employees take sick leave, maternity leave, convalescence and health rehabilitation.

III. Official letter No. 1880/BHXH-CSXH of Vietnam Social Insurance on implementation of the social insurance regime for employees at the employers who have not fully paid social insurance

On 21 June 2023, Vietnam Social Insurance issued Official Letter No. 1880/BHXH-CSXH (“Official Letter 1880”) to the social security of provinces and centrally run cities on the implementation of the social insurance regime for employees at the employers who have not fully paid social insurance.

Accordingly, employees at the following employers who have not fully paid social insurance are still entitled to sickness and maternity benefits; pension and death scheme:

• The Employer is in bankruptcy proceedings;
• The Employer has had the bankruptcy decision from the Court;
• The Employer is no longer doing business at the registered address;
• The Employer has no legal representative.

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