Q: We are a foreign invested company in Vietnam and our company has one employee (58 years old) and another one (nearly 50 years old), does our company have to participate compulsory insurance for these employees?
A: Regarding to your question, we would like to advise as follows:
1.For the people who is 58 years old
With regard to the social insurance
According to the regulation stated in the Item 1, Article 186 of Labor Code 2012, employer and employee must participate in the mandatory social insurance and health insurance and unemployment insurance. Therefore, in principle, your company and two people including one employee is 58 years old and another one is nearly 50 years old have to participate in the compulsory insurance.
However, under the Item 2, Article 5, Decree No. 44/2003/ND-CP of the Government dated May 9th, 2003 detailing and guiding the implementation of a number of Articles of Labor Code 2002 regarding the Labor Contract: “For labor contracts signed with pensioners…., the social insurance and medical insurance premiums, travel fares and annual leave pay shall be included in the salaries or remuneration of the laborers”.
Therefore,In this case, if the person who is 58 years old has been entitled to retirement pension, your company and such employee shall have not to participate in the compulsory social insurances. And, your company shall pay all the compulsory social insurance together the basic salary of such employee under the regulation stated in the Item 3, Article 186 of Labor Code 2012.
In practice, the Decree No. 44/2003/ND-CP had been replaced by the Decree No. 44/2013/ND-CP of the Government dated May 10th, 2013 detailing and guiding the implementation of a number of Articles of Labor Code 2012 regarding the Labor Contract.
However, there is not any detail regulation in the Decree No. 44/2013/ND-CP state clearly as stipulated in the Decree No. 44/2003/ND-CP, therefore, actually, many employers at this time still use the regulation in the Decree No. 44/2003/ND-CP to pay all the compulsory insurance into the salary of the employee if such employee had been entitled to retirement pension.
With regard to the unemployment insurance
With regard to the unemployment insurance, according to the Item 2, Article 2 of the Decree No. 127/2008/ND-CP of December 12, 2008, detailing and guiding the implementation of a number of articles of the social insurance Law concerning unemployment insurance, employee currently is receiving monthly pensions who enters into labor contract with the Embassy not covered by unemployment insurance.
From May 01st, 2015, the Embassy can base on the regulation stated in the point d, Item 1, Article 21 of the Decree No. 28/2015/ND-CP detailing the implementation of a number of articles of the Employment Law concerning the unemployment insurance to pay nothing regarding to the unemployment insurance because this employee is not the object of the unemployment insurance.
2.For the people who is nearly 50 years old
This employee has not full conditions to be entitled the retirement pensions, therefore, according to the regulation stated in the Item 1, Article 186 of Labor Code 2012 aforesaid, the employee and your company has to participate in the compulsory social insurance. In fact, there is not any exception.
