According to nationwide statistics, there are approximately 2 million workers with labor contracts lasting from 1 to 3 months. As of May 2018, only over 8.000 workers nationwide were participating in social insurance; the rest were being circumvented by businesses through various means.
Deceptive labor contract practices to evade social insurance contributions.
Mai Duc Thien (Deputy Head of the Legal Department – Ministry of Labor, War Invalids and Social Affairs) stated that: In order to evade paying social insurance for employees with contracts of 1-3 months, some businesses have been using types of contracts such as project-based contracts, subcontracting, and piecework contracts… to avoid the regulation requiring them to pay social insurance for their employees. In addition, businesses have many ways to “circumvent the law” to remove older workers from their workforce.
According to Mr. Mai Duc Thien's assessment: Under the 2014 Social Insurance Law, starting from January 1, 2018, employees with contracts of 1-3 months or more are required to participate in social insurance. This aims to ensure the legitimate rights of employees. While some businesses comply with the Social Insurance Law, many others circumvent it by changing the form of employment contract as described above.
Mr. Mai Duc Thang stated that the Vietnam Social Security has discovered many forms of circumventing the law, such as: signing contracts for employees to work for more than 3 months, but recording the term on paper as only 2 months and 15 days or 2 months and 28 days. Even worse, businesses interrupt contracts by 1-2 months before renewing them to maintain the fixed-term contract.
Adjust policies to prevent evasion of social insurance contributions.
With proposals to amend and supplement certain provisions in Chapter III on Labor Contracts (Labor Code 2012) to prevent and deter social insurance evasion, and to clarify the concept of piecework and outsourcing, including the form of product-based piecework, which is not included in the Labor Code but has existed in practice for many years. This loophole allows employers to circumvent the law by piecework to avoid entering into contracts with specific timeframes.
According to Mr. Tran Dinh Lieu (Deputy General Director of Vietnam Social Security), it is also suggested that regulations on types of labor contracts be amended soon to strengthen measures against evasion of social insurance contributions.
According to Article 16 of the 2012 Labor Law, there are two types of labor contracts: written or oral.
According to Mr. Mai Duc Thien, when the 2012 Labor Law was being drafted, the drafting committee temporarily defined part-time employment contracts as a temporary type of work that could replace certain jobs. However, by the time the amendments to the 2012 Labor Law were being discussed, this type of employment was increasingly being used by workers.
Therefore, the state management agency provides a clear definition of the type of work, which also helps the social insurance and wage agencies determine related regulations such as:
What does it mean to work fewer hours than the official working hours?
Is a part-time job 4, 6, or 7 hours a day?
Mr. Tran Dinh Lieu also stated: Currently, most businesses that have not yet participated in social insurance are small businesses, family businesses, etc., operating on a seasonal basis. The social insurance sector will continue to coordinate with the tax sector to develop a plan to investigate the level of labor utilization in order to find appropriate solutions.
Mr. Le Dinh Quang (Deputy Head of the Labor Relations Department, Vietnam General Confederation of Labor) stated: The market currently has many new forms of labor relations based on flexible market mechanisms and agreements. Therefore, it is necessary to clearly define these types of labor relations and policies to ensure sustainable employment for workers while also protecting the rights of businesses.
In addition, Mr. Quang also proposed that it is necessary to strengthen inspection, auditing, and supervision to promptly handle information on intentional violations of the Labor Code, the Trade Union Law, and the Social Insurance Law. www.expertis.vn
