Regulations requiring business owners to participate in social insurance and penalties for business owners failing to pay mandatory social insurance contributions, as stipulated in the 2024 Social Insurance Law. Read on for details.
1. From July 1st, 2025, will business owners be required to participate in social insurance?
Previously, according to Social Insurance Law 2014 Individual business owners are not subject to mandatory social insurance. If they wish, they can participate in voluntary social insurance.
However, from July 1, 2025, based on Point m, Clause 1, Article 2 Law on Social Insurance 2024 regulations:
Article 2. Subjects participating in compulsory social insurance and voluntary social insurance
1. Workers who are Vietnamese citizens and are subject to mandatory social insurance include:
...
m) The head of a business household with a business registration participates in accordance with the regulations of the Government;
...
Therefore, from July 1st, 2025, business owners will also be subject to mandatory social insurance contributions.
2. What are the penalties for business owners who do not participate in social insurance?
According to Article 39 Decree 12 / 2022 / ND-CPThe regulations stipulate the following penalties related to mandatory social insurance contributions:
- Fine amount: A fine of 18-20% of the total amount of social insurance and unemployment insurance contributions payable (maximum 75 million VND) will be imposed if the business owner fails to pay social insurance and unemployment insurance contributions, provided the failure does not warrant criminal prosecution.
A fine of 50-75 million VND will be imposed on business owners who evade social insurance and unemployment insurance contributions but have not yet been prosecuted criminally. - Remedy:
- Employers must pay all outstanding social insurance and unemployment insurance contributions.
- Employers must pay interest equal to twice the previous year's investment interest rate of the social insurance fund, calculated on the amount and duration of the delayed/evaded payment. If they fail to do so themselves, the bank/credit institution will deduct the outstanding amount along with the highest non-term interest rate (applicable when the violation is 30 days or more) from the employer's account.
3. Record the period of mandatory social insurance contributions paid by the business owner before July 1, 2025.
According to Article 1 Resolution 78/2025/UBTVQH15. The Standing Committee of the National Assembly resolved:
Record the period during which the business owner has paid mandatory social insurance contributions.
1. Record the period during which the business owner paid mandatory social insurance contributions before July 1, 2025, as a basis for resolving social insurance benefits in accordance with the law on social insurance.
2. Business owners who met the eligibility requirements for social insurance benefits before the effective date of this Resolution shall be entitled to social insurance benefits from the date they meet the eligibility requirements as prescribed.
4. What risks do business owners who do not participate in social insurance face?
For business owners who do not participate in social insurance, Articles 38 and 39 apply. Law on Social Insurance 2024This is identified as the act of delaying or evading social insurance contributions.
In cases of late payment:
- The social insurance agency is responsible for identifying and following up on these matters in writing.
- The social insurance agency will publish this information on its official website.
- The social insurance agency sends the information to the state management agency for social insurance and unemployment insurance, and the relevant inspection agency for consideration and handling within their authority.
In cases where it constitutes evasion of payment:
- Depending on the extent of tax evasion, administrative penalties will be imposed.
- Or there is a risk of criminal prosecution as prescribed by law.
From July 1st, 2025, business owners who do not participate in social insurance risk heavy penalties according to regulations. Law on Social Insurance 2024 (effective from July 1, 2025), there are even criminal offenses related to evading social insurance contributions.