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Amended law to tighten penalties for social insurance violations

Update: August, 12/2014 - 09:38

Vice Chairman of the National Assembly's Committee on Social Affairs Bui Sy Loi talked to the Thoi bao Kinh te (Economic Times) newspaper about the need to abide by the Law on social insurance.

The NA's Committee on Social Affairs is in charge of re-examining the draft of the amended Law on Social Insurance before it is submitted to the NA. Can you briefly talk about the main content of the amended law?

Seven years after the Law on Social Insurance was approved, it has proven its effectiveness in protecting the legal rights of labourers and employers, as well as ensuring social security. However, today the Law has been found to have certain shortcomings that need to be adjusted, along with the changes to the economy, the social security and the requirement of international integration.

The amended content will focus on buyers of social insurance, how social insurance is calculated, pension policies, timelines for paying social insurance, the competence of labour inspectors of the departments of labour, invalids and social welfares, and on punishments for violations of the law.

Can you talk about the subjects of the Law on Social Insurance in the draft amended law?

The amended law will have another group of social insurance beneficiaries: they are labourers with contracts lasting from one to three months. For a long time, we have talked about them as a group of labourers who don't pay social insurance. If there are high numbers of those following the law, we can expect to have seven million more people joining social insurance.

In fact, only 20 per cent of labourers are paying compulsory social insurance. That means more than 70 per cent of the work force has not joined social insurance, the equivalent to 37 million people. Some 15 million of these are from rural areas.

If only when we expand the subject of social insurance, based upon the fact that the State would partly subsidise the payment, we can reach the targeted number of people joining social insurance. And that is also a way that the State can ensure social security for people when they retire. The Government will need to study this.

Regarding social insurance pending debts, the social insurance sector had to resort to filing cases in the courts. How will pending debts be addressed in the amended law?

The biggest problem now is the low rate of labourers, as well as employers, following the law. The statistics provided by the Social Insurance of Viet Nam showed that the pending debts of social insurance had reached VND12 trillion (US$565 million). Apart from the low rate of those abiding by the law, our punishment mechanism and legal proceedings have not been effective.

In an attempt to amend the law, we need to assign more power to labourer inspectors or to the Ministry of Labour, Invalids and Social Affairs.

It is also necessary to raise the fine for violations of social insurance payment regulations. The Government is proposing an amount twice as high as interest rates of banks.

Next, the social insurance agencies must be eligible to file a case against employers, as well as enterprises when they have pending debts or don't pay social insurance for their labourers. Finally, we can assign trade unions to be eligible for bringing a suit against enterprises regarding social insurance pending debts.

I think we also need to amend the Law on Criminals. Those who don't pay social insurance for their labourers can be considered to be violators of the tax laws.

Regarding the feasibility of the enforcement of social insurance for labourers with contracts lasting from one to three months, this depends largely on employers abiding by the law.

While we have to admit the rate of those following the law, it is necessary that the law has strong punishment regulations.

It is also necessary that we have the means to communicate to tell people that paying social insurance is a safety solution for them when they retire. — VNS

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