Nghe An: The arduous journey of collecting insurance debt from businesses

Nearly 10 years without paying insurance

For many years now, the 2-storey building located at the beginning of Phan Chu Trinh Street (Vinh City) has become familiar to many inspectors of the Provincial Social Insurance. This is the headquarters of the 787 Investment and Construction Consulting Joint Stock Company. However, for more than 8 years, this company has not paid a single penny in insurance for its employees.

At the end of April, we had the opportunity to follow the inspection team of the provincial Social Insurance to a business to collect debts. This investment consulting company was one of those destinations. "Luckily", Mr. Tran Van Phuong - Head of the Inspection - Examination Department (Nghe An Social Insurance), exclaimed with excitement when he saw the figure of the company director - Mr. Nguyen Bao Ngoc.

Mr. Nguyen Bao Ngoc - Director of 787 Investment and Construction Consulting Joint Stock Company. Photo: Tien Hung

“This is our usual job. But we can’t always meet the director. Even though we have an appointment, they often avoid us. Some places we go to, they even send people to chase us away,” said Mr. Phuong.

The company, of which Mr. Ngoc is the director, was established in 2009, and in the early years had more than 30 employees. However, since 2011, the company has refused to pay insurance for its employees. The debt of this company, plus interest, has now amounted to more than 1.1 billion VND.

“The company is having a hard time lately,” Mr. Ngoc told the inspection team. This is also a familiar excuse from business owners with outstanding insurance debts every time the inspection team comes. “Our company currently has only 3 employees and has not received any projects for a long time. While some projects are completed, people still owe us,” the director continued.

The inspection team worked with director Nguyen Bao Ngoc. Photo: Tien Hung

“If someone owes you money, you have to collect it, otherwise you have to sue them in court. This is the insurance money for employees, sooner or later the company will have to pay it, it cannot be delayed forever. The longer it takes, the higher the interest will be and the more severe the penalty…”, the head of the inspection team replied to the director. When he first became the head of the department about 5 years ago, Mr. Phuong also went to this company to collect the debt. Up to now, the debt has not only decreased but also increased by hundreds of millions.

After inspecting some documents and procedures, notifying the director of the debt in detail and encouraging him to pay it quickly, the delegation decided to draw up an administrative violation report to propose a fine. “In this case, there are many aggravating circumstances. The maximum fine is 150 million VND. Along with interest and principal, it is about 1.3 billion VND,” said Mr. Tran Van Phuong.

The inspection team ended the working session without receiving a promise from the director "when the debt will be paid off". The 2-storey building of the company's headquarters will continue to be a familiar destination for inspection officers in the coming time.

The inspection team cannot always meet the company director to collect insurance debt. Photo: Tien Hung

There are thousands of businesses in the province.

Before that, we also followed the inspection team to a company located on Nguyen Du Street (Ben Thuy Ward). However, the address that this company registered on the current records is just an empty lot. Asking around, no one knows about it. "Maybe they stopped operating a long time ago," an inspector commented. In this case, the inspector will work with the ward to confirm that the company is no longer operating, then propose to agencies and departments with the aim of not letting the debt of this company increase.

At the company specializing in providing educational equipment named Phuc Hung Xanh on Truong Chinh Street (Le Loi Ward), it took us quite a while to meet the director. The company's headquarters were closed despite having made an appointment in advance. The group then asked around and went to the factory to meet the company's leaders.

Like many other company directors who still owe insurance, Ms. Duong Thi Tuyet - Director of this company said, "The company is having a hard time these days. Many places have received goods but they have not paid...". This company currently owes 20 months of insurance for its employees, with a total amount of over 130 million VND including interest. The group then also made a record of administrative violations.

“Today is lucky. There were many days when we had a hard time. We were constantly cursed at. There were many days when we couldn’t find the company’s address because it had stopped operating,” said inspector Tran Thi Bich Thuy.

In the first quarter of this year, this inspection team worked with 456 debt units, of which 186 units were recorded, recovering more than 12.5 billion VND.

In the first quarter of 2019 alone, this inspection team worked with 456 debt units, of which 186 units were recorded, collecting more than 12.5 billion VND. According to the leader of Nghe An Provincial Social Insurance, the inspection and examination work at labor-using units with outstanding debts has been of interest to the unit, regularly monitored, supervised, and urged to implement the inspection conclusions.

The specialized inspection teams mainly focused on inspecting units and enterprises that have outstanding social insurance debts and have not fully participated in the number of employees required to participate. The provincial Social Insurance has also drawn up 12 administrative violation records against employers; imposed administrative penalties on 6 employers, recovered the total fine amount to the fund: more than 180 million VND (nearly 19 million VND has been collected); transferred the file to propose the Provincial People's Committee to impose penalties on 4 units that are late in paying social insurance; actively coordinated with the Economic Police Department of Nghe An Provincial Police to conduct inspections and propose the Nghe An Provincial People's Committee to impose administrative penalties on the act of late payment of social insurance, health insurance, and unemployment insurance by employers.

Despite efforts, debt collection is still facing many difficulties, especially in the context of thousands of businesses and units still having outstanding debts. Among them, many businesses are deliberately delaying and avoiding their obligations.

Meanwhile, the 2015 Penal Code has added provisions on crimes of profiteering, evasion of payment, and arrears of social insurance (SI) and health insurance (HI). However, after more than 1 year of the law taking effect, no cases have been prosecuted.

Recently, violations of the law on social insurance, unemployment insurance (UI), and health insurance (HI) have tended to increase. This affects not only the rights of workers, but also the safety of the social security system. The 2015 Penal Code took effect from January 1, 2018, with crimes of fraud and evasion of payment of social insurance, health insurance, and unemployment insurance. However, to date, there has been no guidance document from the competent authority to transfer cases with signs of crimes related to social insurance, health insurance, and unemployment insurance to the investigation agency.