Businesses continue to evade paying social insurance contributions for their employees despite previous warnings and administrative penalties issued by Vietnam Social Insurance. Therefore, in 2019, the Ho Chi Minh City Social Insurance agency resolutely recommended to the Ho Chi Minh City Police Department that businesses failing to comply with social insurance regulations be penalized for their arrears.
Businesses in Ho Chi Minh City that owe social insurance contributions are facing potential criminal prosecution.
According to the latest information from the Ho Chi Minh City Social Insurance agency, the agency has transferred the files of businesses owing social insurance contributions for their employees to the Ho Chi Minh City Police for criminal prosecution. Specifically, they have recommended criminal prosecution against 21 businesses that evaded paying social insurance contributions for their employees but still collected monthly contributions from them, totaling nearly 49,3 billion VND.
The Social Insurance agency had previously announced regulations/penalty decisions through all media channels, and even issued warnings in the form of administrative violations to businesses that owed social insurance contributions. However, some businesses were still slow to rectify the situation and delay paying their debts to the Social Insurance agency, leading to an ever-increasing debt.
Below are some businesses that have been in arrears with social insurance contributions for a long time (as of June 2019):
- Saigon Plastic Packaging Joint Stock Company (Tan Phu District) owed nearly 6,1 billion VND in social insurance contributions for its employees from December 2017 to June 2019. At the time the company was inspected and subjected to administrative penalties, authorities concluded that the social insurance debt as of January 2019 was nearly 3,8 billion VND. Six months later, the amount owed had almost doubled.
- Vinh Cuu Joint Stock Company (District 2) owes 6,6 billion VND in social insurance contributions for its employees (an increase of 600 million VND compared to the previous 6 months).
- The Southern Civil and Industrial Construction Joint Stock Company (District 1) owes nearly 3,3 billion VND in social insurance contributions.
- Tan Hoang Thang Joint Stock Company (Tan Binh district) owes nearly 3 billion VND in social insurance contributions.
- Tan Vu Minh Real Estate Construction Company Limited (Binh Thanh District) owes 2,3 billion VND in social insurance contributions.
Phu Khang Gia Construction Joint Stock Company (Binh Thanh District) owes nearly 2 billion VND in social insurance contributions. - Hoang Anh Saigon Real Estate Co., Ltd. has been in arrears with social insurance contributions since February 2016. At the time of the inspection and administrative penalty in early 2019, the company owed more than 1,3 billion VND in social insurance contributions. By June 2019, the company still owed nearly 1,2 billion VND.
- Hai Thanh Trading and Service Co., Ltd. (District 7) has been in arrears with social insurance contributions since 2014; in the first six months of this year, the company only paid about 500 million VND, still owing 1,6 billion VND.
Source: Ho Chi Minh City Social Insurance (List of Social Insurance Debtors)
Individuals (business owners) who owe social insurance contributions will face criminal prosecution.
From January 1st, 2019, evading social insurance, health insurance, and unemployment insurance contributions for employees has become a criminal offense.
According to Resolution No. 05/2019/NQ-HĐTP of the Council of Judges of the Supreme People's Court (guiding the application of Article 214 on the crime of fraud in social insurance and unemployment insurance; Article 215 on the crime of fraud in health insurance; and Article 216 on the crime of evading social insurance, health insurance, and unemployment insurance contributions for employees of the Penal Code), instead of only prosecuting legal entities, from September 1, 2019, individuals who are business owners and commit acts of evading or defrauding social insurance, health insurance, and unemployment insurance contributions for their employees will be subject to criminal prosecution.
Specifically, Article 216 of the Penal Code stipulates that anyone who, having the obligation to pay social insurance, health insurance, and unemployment insurance for employees, fraudulently or by other means fails to pay or pays insufficient amounts as prescribed for 6 months or more, evades social insurance contributions of 1 billion VND or more, or evades contributions for 200 or more people, shall be fined from 500 million VND to 1 billion VND, or sentenced to imprisonment from 2 to 7 years. The offender may also be fined from 20 to 100 million VND, prohibited from holding office, or prohibited from practicing a certain profession or doing a certain job for 1 to 5 years.
Workers can report businesses for defaulting on or evading social insurance contributions.
Also from September 1st, 2019, employees can report businesses for defaulting on or evading insurance payments.
Trade unions and organizations representing workers, upon discovering that a business shows signs of evading social insurance contributions, should immediately notify the competent authorities to conduct legal proceedings for consideration and prosecution in accordance with the provisions of the Penal Code.
Mr. Nguyen Tri Tue, Deputy Chief Justice of the Supreme People's Court, further explained that the previous requirement for authorization from employees at enterprises before a grassroots trade union could sue an employer for evasion or arrears in social insurance, unemployment insurance, and health insurance contributions was a mechanism for authorizing civil lawsuits.
However, according to Resolution No. 05/2019/NQ-HĐTP recently issued, it is stipulated that: Upon detecting acts showing signs of crimes as stipulated in Articles 214, 215, and 216 of the Penal Code, within its duties and powers, the Social Insurance agency shall send a written request for prosecution, along with relevant evidence and documents, to the competent prosecuting authority for consideration and initiation of proceedings in accordance with the provisions of the Criminal Procedure Code.
