Is there an agreement not to participate in social insurance?

Agreement not to participate in social insurance is a violation of the law and is strictly prohibited. Agreeing not to participate in social insurance not only causes damage to the employee but can also result in administrative sanctions. The article below will further analyze the legal regulations related to this issue, helping customers clearly understand their rights and obligations when participating in social insurance.

Subjects required to participate in social insurance

Subjects required to participate in social insurance include both employees and employers.

Target workers

Employees who are Vietnamese citizens:

• People working under an indefinite-term labor contract, a definite-term labor contract, a seasonal labor contract or a certain job with a term from 3 months to less than 12 months, including the labor contract is signed between the employer and the legal representative of the person under 15 years old according to the provisions of labor law.
• People working under labor contracts with a term from 1 full month to less than 3 months.
• Officials, civil servants, and public employees.
• Defense workers, police workers, and other workers in cipher organizations.
• Officers and professional soldiers of the People’s Army; officers, professional non-commissioned officers, officers, technical non-commissioned officers of the People’s Public Security; People who do cipher work are paid the same as soldiers.
• Non-commissioned officers and soldiers of the People’s Army; non-commissioned officers and soldiers of the People’s Public Security serving for a limited period of time; Military, police, and cipher students studying are entitled to living expenses.
• People working abroad under contracts specified in the Law on Vietnamese Guest Workers working abroad under contracts.
• Business managers and cooperative managers receive a salary.
• People who work part-time in communes, wards, and towns.

Employees who are foreign citizens:

Foreign employees working in Vietnam are subject to compulsory social insurance when they have a work permit or practice certificate or practice license issued by a competent authority of Vietnam and have an indefinite-term labor contract or a fixed-term labor contract of at least 01 year with an employer in Vietnam.

However, employees who are foreign citizens will not be subject to compulsory social insurance if they fall into one of the following cases:

• Foreign workers moving within an enterprise are managers, executives, experts and technical workers of a foreign enterprise that has established a commercial presence in the territory of Vietnam, moving temporarily within an enterprise to have a commercial presence in the territory of Vietnam and have been recruited by a foreign enterprise for at least 12 months.
• The employee has reached retirement age as prescribed in Article 169 of the Labor Code 2019.

Target employer

Employers are obliged to participate in compulsory social insurance for employees. According to regulations, employers participating in compulsory social insurance include:

• State agencies, public service units, people’s armed units.
• Political organizations, socio-political organizations, socio-political-professional organizations, socio-professional organizations, other social organizations.
• Foreign agencies, organizations, and international organizations operating in Vietnamese territory.
• Enterprises, cooperatives, individual business households, cooperative groups, other organizations and individuals.

>>> Reference: Social insurance payment methods according to current regulations.

Is it possible to agree not to participate in social insurance?

According to the provisions of Clause 1, Article 168 of the Labor Code 2019, employers and employees are obliged to participate in social insurance.

At the same time, Article 2 of the Law on Social Insurance 2014 lists the subjects participating in compulsory insurance that we have informed above.

Thus, if an employee is required to participate in compulsory social insurance, the employee and the employer cannot agree not to participate in compulsory social insurance.

The agreement not to participate in social insurance between the employer and the employee, regardless of the form such as commitment form, application form, confirmation at the company, is not legally valid and is considered a violation of the law.

Is there a penalty if you agree not to pay mandatory social insurance?

Pursuant to Clause 1, Article 39 of Decree 12/2022/ND-CP, a fine from 500,000 VND to 1,000,000 VND shall be imposed on employees who agree with the employer not to participate in mandatory social insurance.

Social insurance consulting services for businesses and employees

Complying with regulations on social insurance not only ensures benefits for employees but also helps businesses avoid risks.

Long Phan provides professional social insurance consulting services for businesses and employees, including:

• Consulting on subjects, payment levels, and procedures for participating in social insurance.
• Support businesses in building and implementing internal social insurance systems.
• Consulting and explaining regulations on social insurance.
• Drafting documents and records related to social insurance.
• Representing businesses to resolve labor disputes related to social insurance.
• Advise employees on social insurance benefits and procedures for enjoying benefits.
• Consulting and answering other issues related to social insurance for employees.

Participation in compulsory social insurance is required by law to protect the rights of workers. Agreement not to participate in social insurance is a violation of the law and will be severely punished. Customers need to comply with regulations to avoid risks and ensure their legitimate rights. If you have any questions, please contact Long Phan via the hotline: 0906735386 for advice and support.