Business owners who evade social insurance payments will be jailed from January 1, 2018

According to the Penal Code effective from January 1, 2018, evading payment of social insurance, health insurance, and unemployment insurance for employees can result in imprisonment for individuals and fines for legal entities. In case of evading payment of social insurance for employees, business owners can be sentenced to up to 7 years in prison and fined 1 billion VND.

Currently many workers are not covered by social insurance.

Specifically, Article 216 of the 2015 Penal Code, effective from January 1, 2018, stipulates:

1. Any person who is obliged to pay social insurance, health insurance, unemployment insurance for employees but commits fraud or other tricks to not pay or not pay in full as prescribed for 6 months or more in one of the following cases, has been administratively sanctioned for this act but still commits the violation, shall be fined from 50 million VND to 200 million VND; be subject to non-custodial reform for up to 1 year or be imprisoned from 3 months to 1 year: Evading insurance payment from 50 million VND to under 300 million VND; Evading insurance payment for from 10 to under 50 employees.

2. Committing a crime in one of the following cases shall be subject to a fine of from 200 million VND to 500 million VND or imprisonment from 6 months to 3 years: Committing the crime 2 times or more; Evading insurance payments from 300 million VND to under 1 billion VND; Evading insurance payments for from 50 to under 200 employees; Failing to pay the insurance amount collected or deducted from employees as prescribed in Point a or Point b, Clause 1 of this Article.

3. Committing a crime in one of the following cases shall be subject to a fine of from 500 million VND to 1 billion VND or imprisonment from 2 years to 7 years: Evading insurance payment of 1 billion VND or more; Evading insurance payment for 200 or more employees; Failing to pay the insurance amount collected or deducted from employees as prescribed in Point b or Point c, Clause 2 of this Article.

4. The offender may also be fined from 20 million VND to 100 million VND, banned from holding positions, practicing a profession or doing certain jobs from 01 year to 05 years.

5. A commercial legal entity committing a crime specified in this Article shall be punished as follows: Committing a crime in the case specified in Clause 1 of this Article shall be subject to a fine of between VND 200 million and VND 500 million; Committing a crime in the case specified in Clause 2 of this Article shall be subject to a fine of between VND 500 million and VND 1 billion; Committing a crime in the case specified in Clause 3 of this Article shall be subject to a fine of between VND 1 billion and VND 3 billion.

With increased penalties for evading social insurance, health insurance, and unemployment insurance payments, the situation of evading payments can be overcome in the near future.

According to TPO