Legal News

[Labor] Treatment of companies' social insurance premiums in arrears and avoidance

2024/05/02

In fact, many companies violate their obligation to pay social insurance fees. Although the Criminal Code provides for the crimes of committing fraud in social and unemployment insurance (Article 214) and evading payment of social, medical, and unemployment insurance fees for workers (Article 216), these violations are very difficult to handle and in most cases are not even punished.
The Council of Judges issued Resolution No. 05/2019/HDTP dated August 15, 2019 to guide the application of these provisions. However, there remain many interpretations in the recognition of criminal acts and the application of response measures, making it difficult to determine what constitutes a crime. One of the reasons for this situation is that there is no provision in the current law that distinguishes between “arrears” and “evasion” of social security contributions.

In light of the above, a draft amendment to the Draft Social Insurance Law was proposed at the 31st session of the Standing Committee of the National Assembly in March 2024, with the aim of clarifying the provisions on social insurance. It will allow for the application of appropriate measures with a clear distinction between acts of arrears or avoidance of social insurance contributions or planning to do so. In addition, the revised Social Insurance Law will be submitted to the National Assembly for approval at the Seventh Parliamentary Session (May 2024).

The crackdown on violations in the social insurance sector is expected to become more stringent. Therefore, companies need to be aware of legal compliance in order to avoid unnecessary sanctions. We will share more information on the revised Social Insurance Law in our newsletter when it is released.