Ensuring employee benefits from new social insurance contribution levels

(Baonghean) - From January 1, 2016, employees must pay social insurance (SI) according to the new mechanism stipulated in the Social Insurance Law 2014. The increased contribution level means increased benefits for employees, but there are still many concerns...

Worry about businesses "circumventing" the law

According to the provisions of the Social Insurance Law 2014, from January 1, 2016 to the end of 2017, the social insurance contribution level will be based on the salary and allowances stated in the contract. From January 1, 2018, employees will pay insurance based on the salary, allowances and many other additional amounts stated in the labor contract. Employees will pay 8% and businesses will pay 18%, accounting for 26% of monthly salary.

When asked about the new regulation increasing the contribution rate, Ms. Nguyen Thi Hoa (40 years old, residing in Hung Tay commune, Hung Nguyen district), working at Matrix Company in Bac Vinh Industrial Park said: "The amount and time of social insurance contribution increase, but will we really benefit? My current income is only about 2.5 million VND/month, if the contribution rate increases, life will be really difficult. In addition, assuming the pension increases, will it be able to cover daily living expenses when prices increase?"

Mr. Ho Ngoc Quy (26 years old, residing in Nghi Phu commune, Vinh city), a worker in Nam Cam Industrial Park, shared: "Through newspapers and radio, I also know that changing the way of paying social insurance makes the rights and benefits for us workers more secure, but I am worried that businesses will find ways to circumvent the law, cut workers' allowances, reduce income or businesses evade paying social insurance, then we will be at a disadvantage."

Workers at Haivina Kim Lien Company - a unit that implements social insurance policies well

On the business side, many units expressed concerns about the new regulations on social insurance contribution rates. Mr. Tu Thai - Director of 419 Investment and Construction Joint Stock Company said: "This change is more beneficial for employees, but it puts a lot of pressure on businesses when they have to endure a double impact: increasing the annual regional minimum wage and the new social insurance contribution rate. Currently, the company has more than 400 employees, if calculated according to the new payment method, each worker of the company must pay an additional 700,000 VND/month in social insurance contributions, along with the difference in the increase in the regional minimum wage, 2% of the union fund will cause difficulties for businesses. Currently, we still do not have any solutions. But when the law comes into effect, we must try to implement it, calculate as much as possible".

Ms. Tran Thi Nguyet - Vice President of the Trade Union of the Southeast Economic Zone said: "The economy is increasingly difficult, Nghe An enterprises have to compete fiercely, not only with each other in the province but also with enterprises outside the province. In fact, some enterprises still owe social insurance, now increasing the contribution rate will increase costs and the allowances for employees are at risk of being cut."

Ensuring benefits for workers

However, many workers agree with the application of the new social insurance contribution regulations according to the amended Social Insurance Law, especially those with high and stable incomes. Mr. Doan Van Binh, 32 years old - a sales employee of an import-export company in Vinh city said: "I have been doing this job for 8 years with a salary of more than 4 million VND/month. If we add allowances, the total income is about 10 million VND/month. Contributing to the social insurance fund, with a high contribution rate, the pension I receive will be quite high, so it is clearly beneficial for workers".

Provincial Social Insurance leaders discuss with businesses facing difficulties in implementing social insurance, health insurance and unemployment insurance policies.

According to Mr. Ngo Ngoc Thanh - Head of Debt Collection and Exploitation Department - Nghe An Social Insurance, currently, most businesses have 2 payrolls, 1 payroll as the basis for tax payment and 1 payroll to calculate social insurance payment. Usually, the basic salary for calculating social insurance payment is much lower than the actual income, only equal to or slightly higher than the regional minimum wage. It is the application of this payment level that has resulted in the enjoyment of maternity, work accident, unemployment and pension benefits for employees not being guaranteed. Although applying the new social insurance payment method will more or less create pressure and affect businesses, on the contrary, it will help employees receive higher pensions when they retire, ensuring their lives.

Thus, it can be clearly seen that the new regulation on social insurance contribution rates clearly benefits employees. However, it is also necessary to consider the implementation method and roadmap, because if not strictly managed, businesses will "dodge", not declare the correct allowances at the unit and in the end, the disadvantage belongs to the employees.

Discussing this issue, Mr. Le Truong Giang - Deputy Director of the Provincial Social Insurance said: "Currently, in enterprises, employees have many types of allowances and there is still no circular guiding the collection of social insurance from which allowances to collect, so we have to wait.

The new social insurance level helps workers receive higher pensions when they retire. (Photo: Pension payment in Linh Son commune, Anh Son district)

However, from 2018 onwards, the social insurance contribution will certainly be calculated on the total income including salary, salary allowances and other supplements. Therefore, the most important thing is that businesses need to save costs to increase salaries and ensure long-term benefits for employees because they are an important resource to generate revenue and profit for the business. On the part of the social insurance agency, we will continue to innovate working methods, simplify administrative procedures and service attitudes to create convenience for both employees and businesses.

Minh Quan