Taking strong action against outstanding social insurance debts.

(Baonghean) - Social insurance and health insurance are the main pillars of the social security system, contributing to ensuring political stability and sustainable socio-economic development. However, in recent times, the situation of businesses owing and evading social insurance and health insurance contributions for their employees has become widespread, leading to many negative consequences...

According to statistics, Nghe An is one of the provinces with the highest rates of outstanding insurance debts nationwide. As of the end of June 2015, the total amount of outstanding social insurance, health insurance, and unemployment insurance debts in the province was 248.8 billion VND. Of this amount, social insurance debt was 167.492 billion VND, unemployment insurance debt was 6.032 billion VND, and health insurance debt was 75.276 billion VND (of which the State budget owed 59.732 billion VND). There are 1,388 agencies and businesses with social insurance debts of 3 months or more. The construction industry has the highest concentration of businesses with outstanding social insurance debts, followed by the transportation, mining, and fisheries sectors. Businesses with large debts include: Construction Investment Joint Stock Company 24 with over 12.167 billion VND; Petrochemical Construction Joint Stock Company with 10.080 billion VND; and Nghe An Transport & Trade Corporation Joint Stock Company with 8.7 billion VND. Song Lam 2 Cement Joint Stock Company contributed over 5.7 billion VND; 482 Bridge and Road Construction Joint Stock Company contributed over 5.3 billion VND; Vinaconex 16 Joint Stock Company contributed over 4.5 billion VND…

The fact that businesses are in arrears with social insurance contributions is seriously affecting workers. More than 1,388 businesses owe social insurance contributions for three months or more, meaning that over 16,700 workers employed in these businesses will not receive benefits when they are sick, pregnant, or injured in work-related accidents; some workers reaching retirement age will not receive their pensions because they have not contributed to social insurance for the required period.

Officials from the Revenue Management Department (Provincial Social Insurance) provide advice on social insurance benefits at Matrix Vinh Co., Ltd.

Many businesses offer various reasons for delays and arrears in social insurance and health insurance payments, such as the economic downturn causing difficulties in production and business, or construction projects that have been completed but not yet paid by the investor. However, except for businesses that are genuinely struggling, operating at a loss, and unable to pay their employees' salaries, many businesses, despite fully understanding their responsibilities and rights regarding social insurance and health insurance for their employees, intentionally fail to pay these contributions. They may also only pay for a select few within the management team to reduce costs and maximize profits, or they may exploit the lower late payment penalty interest rates compared to bank interest rates and the complicated procedures for obtaining bank loans, thus deliberately defaulting on social insurance and health insurance payments. This reflects the reality that businesses have very limited awareness of social insurance and health insurance laws; most business owners do not truly value their employees as "assets" of the business, focusing only on business profits.

From the beginning of 2015 to the present, the Inspectorate of the Department of Labor, War Invalids and Social Affairs has summoned 191 units for questioning, issued administrative violation reports for 109 units, and imposed fines on 65 units totaling 804.227 million VND, and issued enforcement orders for 6 units. If businesses continue to delay payment, legal action will be taken. In 2014, the Social Insurance agency filed lawsuits against 33 units, and from the beginning of 2015 to the present, it has filed lawsuits against 15 units. Some "hot spots" regarding outstanding social insurance debts have been partially resolved, such as the finalization of social insurance records for 113 workers of Nghe An Bridge and Road Construction Joint Stock Company, 139 workers of Irrigation Joint Stock Company No. 4, and 105 workers of Construction and Dredging Joint Stock Company No. 2...

However, overall, the situation of outstanding social insurance debts remains unchanged. The reason is that administrative penalties are still low (the highest being only 75 million VND), so they have no deterrent effect. Even the strongest measure, suing businesses in court (with a 100% chance of winning), is ineffective due to the very low debt recovery rate, the complex procedures and documentation for filing lawsuits, and the slow processing and trial process. And even if the judgment has legal effect, the social insurance agency finds it difficult to determine the account numbers and assets of the businesses, and cannot freeze bank accounts or assets due to the impact on the interests of the banks.

To address this situation, according to Mr. Le Truong Giang, Deputy Director of the Provincial Social Insurance Agency, in the near future, the Social Insurance Agency will propose adding the crime of evading social insurance contributions and the crime of misappropriating social insurance funds from employees to the Criminal Code. This applies to cases where social insurance contributions are deducted from employees' salaries but not remitted to the Social Insurance Agency for a long period, even after administrative penalties have been imposed, but the violations continue. Furthermore, they will propose that the Government assign relevant ministries and agencies to develop and submit to the Government regulations on the management and handling of social insurance and health insurance debts for indebted entities. This aims to resolve the rights of employees and address debts of entities that are missing, dissolved, or no longer have assets to recover. On the other hand, according to the amended Social Insurance Law effective from January 1, 2016, inspections and penalties related to the Social Insurance and Health Insurance Law will be handled by the Social Insurance Agency, which will facilitate the handling of violating entities.

Mr. Giang stated that, along with changing the approach of insurance staff towards businesses and listening to business opinions to jointly resolve difficulties, the provincial Social Insurance agency will implement the "Coordination Project between People's Committees of communes and wards, and neighborhood committees to collect and recover social insurance, health insurance, and unemployment insurance debts from small and micro-enterprises in residential areas" in the near future. Accordingly, the Social Insurance agency will coordinate with local authorities to publicly display the list of businesses owing social insurance and health insurance on bulletin boards and loudspeakers at People's Committees of communes and wards, and cultural centers of neighborhoods; and mobilize the participation of local officials in urging debt collection… It is hoped that these measures will soon be effective, contributing to reducing the persistent problem of outstanding social insurance debts.

Minh Quan