Compulsory social insurance for labor export workers: Still lacking feasibility

(Baonghean) - From January 1, 2016, the amended Law on Social Insurance (SI) 2014 officially took effect, requiring workers working abroad to pay social insurance. Although it is considered humane and contributes to ensuring future social security for workers, after nearly a year of implementation, this policy has revealed many shortcomings and is difficult to implement.

Many difficulties

According to the revised Law on Social Insurance, the regulations on compulsory social insurance for employees working abroad are quite specific. Employees participate in compulsory social insurance in two regimes: retirement and death benefits. For employees who have participated in compulsory social insurance, the monthly contribution is equal to 22% of the employee's monthly salary for social insurance before going to work abroad. For those who have not participated in compulsory social insurance, the contribution is equal to 22% of 2 times the basic salary in Vietnam. Employees can pay 3 months, 6 months, 12 months/time or pay in advance according to the term of the contract to work abroad. Employees pay directly to the social insurance agency where they reside before going to work abroad or pay through the sending enterprise or organization. Enterprises do not have to support social insurance payments for employees but only collect on their behalf.

However, there have been shortcomings in the implementation of the law. Through research at the Nghe An Social Insurance Collection Office, Ms. Tran Thi Ha - acting head of the office said: Up to now, no Nghe An workers who go abroad to work have registered to pay social insurance at the social insurance agency. Meanwhile, businesses that send workers to work abroad and are responsible for collecting on their behalf are confused about how to collect compulsory social insurance from workers, what is the specific collection rate, and how to handle cases where workers deliberately do not pay?

Workers learn about Korean labor export at Nghe An Employment Service Center.

Mr. Tran Ngoc Hung in Nghi Van commune (Nghi Loc), currently working in Korea, shared that he has been working abroad for nearly three years, but before that he was only a freelance worker at home so he did not pay social insurance. Now his labor term is about to expire, and even if he pays compulsory social insurance according to regulations, he does not know what to do. His workplace has nearly ten Vietnamese workers, some of whom have just arrived, some of whom have had their extension extended for the second time, but no one has participated in social insurance...

In addition, many employees also expressed concerns about the 22% premium on the base salary. Because employees working in low-income markets such as the Middle East and Malaysia pay social insurance like employees in high-income markets such as Japan and Korea, which is not fair.

Ms. Ho Thi Van - from Hung Nguyen district, currently working in Taiwan said: The initial cost of going to work abroad is already expensive, now having to pay social insurance is also a burden. After 3 years of the contract expiring and returning home, if the job is favorable, spending more than 20 million VND to pay social insurance is not a concern. But if things do not go well, and the initial debt for the cost of going to work abroad has not been paid off, paying social insurance will be extremely difficult.

In addition, each country receiving foreign workers has different regulations on insurance contributions, so workers must comply with the principles. For example, Vietnamese workers working in Japan, Taiwan, and Malaysia must pay insurance, deducted from their monthly salary. Meanwhile, if working in Korea, workers must deposit 450 USD to pay repatriation insurance, risk insurance, and unemployment insurance. When workers have to pay this additional compulsory social insurance, they will think about paying insurance twice, increasing the burden, and that is the reason why they are "afraid" to participate. Or some workers are worried about paying compulsory social insurance for 3 years working abroad, when returning home, they will have trouble with procedures for social insurance books later.

Lack of binding sanctions

According to Mr. Le Van Thuy - Head of the Department of Labor, Wages and Social Insurance (Department of Labor, War Invalids and Social Affairs), the social insurance policy for overseas workers is designed to be convenient and flexible in terms of payment methods so as not to create a burden for workers. If participating in social insurance when working abroad, when returning home, workers can continue to participate in voluntary social insurance at the level they choose that suits their ability so that when they reach retirement age, they will be eligible for retirement benefits. Or, when returning home, if workers do not want to and are not able to continue paying voluntary social insurance, they can receive one-time social insurance.

The types of insurance that Vietnamese workers working abroad must pay in the host country are usually: labor insurance, repatriation insurance, risk insurance, health insurance, etc., to be paid for related expenses when encountering risks, accidents, and illnesses during the working process abroad. This type of insurance will be paid once when the labor contract expires, not a type of social insurance to receive pensions and death benefits like in Vietnam.

However, Mr. Thuy also admitted: The Social Insurance Law and the guiding decree do not have any conditions that stipulate or bind the responsibility of workers working abroad to participate in social insurance. Currently, there are no sanctions to force these workers to comply with the regulations on compulsory social insurance participation. Therefore, it is very difficult to require workers to participate in social insurance.

In fact, businesses and authorities always welcome new regulations aimed at social security, ensuring legitimate rights for workers working abroad. However, when the law is implemented, it faces many difficulties when workers do not want to participate in social insurance, and businesses are reluctant to collect on their behalf. This is the reason why implementing compulsory social insurance for overseas workers is difficult and the results are not as expected.

Minh Quan