Foreign workers want to understand more about social insurance

Trường Lăng

June 7, 2022


Foreign workers want to understand more about social insurance

Trường Lăng

June 7, 2022

Although Mr. Ken Wilson, a British construction consultant has worked for several Vietnamese companies and foreign-invested joint ventures for nearly 4 years, he has not fully understood the aspects of the social insurance system.


“I have a health insurance card, I however know that this card is only applied to some public hospitals, thus I have never used it. I also know there is a monthly deduction from my salary to pay for taxes and insurance premiums. I however don’t know how I will use this insurance,” said Ken Wilson.

Said Michelle Davis, an American citizen working in Hanoi, “I understand that, when I live abroad, I must comply with their regulations and laws, even they are different from my hometown’s. Although I don’t think Vietnam’s social insurance will benefit me, I still pay for insurance premium.”

According to the Ministry of Labor, War Invalids and Social Affairs, as of December 31, 2021, the whole country has 99,876 foreign workers with work permits, with the average salary for social insurance premiums. Health insurance and unemployment insurance are USD 260/person/month. Although this sum is not much compared to the total income, if a foreign worker is not aware of his/her insurance benefits, withheld monthly salary can create an undue burden on both employees and enterprises.

Pursuant to the Decree No. 143/2021/ND-CP (Decree 43), from January 1, 2022, foreign workers pay 8% of their monthly salary to the retirement and survivorship fund. In addition to the 14% contribution from the enterprises, the total social insurance fee for foreign workers has increased significantly.

Said Mr. Hung Phan, CEO of Papaya Insurtech, there are still some challenges for foreign workers when they participate in compulsory insurance in Vietnam.

“The biggest challenge is the process of withdrawing the paid sum when they leave Vietnam, as the exact procedure is still unclear, including processing time and how to transfer money out of Vietnam if a worker has moved to another country,” said Mr. Hung Phan.

Said Mr. Hung Phan, “Getting the most out of this insurance benefit is also a problem, because it is most often applied at public hospitals, where the language barrier makes it difficult for foreigners to get treatment and refunds” for health insurance.

Besides, the employee’s ID is sometimes in their native language, which causes trouble during registration, verification and insurance transactions.

In the context that Vietnam does all efforts to establish partnerships with other countries, the human resources between countries in the framework of multinational cooperation is forecasted to be increased. These foreign workers are obligated to comply with the laws of both Vietnam and their home country. Therefore, another challenge is to synchronize the system of records across the countries to ensure social insurance rights and obligations.

Reported by a consulting firm Dezan Shira & Associates, compulsory insurance will close the wage gap and promote equality between Vietnamese and foreign employees. However, many corporate leaders also expressed their concern about the increased costs when recruiting foreign workers.

Vietnam Social Insurance has received feedback from enterprises employing foreign workers and is guiding the local social insurance agencies to work together in resolving this problem.

Said an official of Vietnam Social Insurance, “Decree No. 143 is a new policy, without an enclosed guiding circular. That’s why we need to help enterprises comply with the regulation by accurately determining the figures of foreign workers in each jurisdiction.”

To address the possible double payments, Vietnam Government is promoting negotiations on bilateral agreements. Last December, Vietnam signed a mutual agreement on social insurance with Korea, recognizing the time of participation in social insurance of both countries to avoid the situation of double social insurance payment for both Vietnamese and Korean citizens. This is Vietnam’s first comprehensive bilateral agreement on social insurance.

Foreign-invested enterprises have also gradually raised awareness and supported foreign workers to understand insurance benefits. Said a representative of Talentnet Human Resources Company: “It takes time to implement and adapt adjustments. According to our consulting experience for many multinational companies in Vietnam, they often have well-planned strategies not only to comply with the local laws, but also to ensure full benefits for foreigners. “. 

Said Ms. Linh Nguyen, Regional Director of Point Avenue – a company that employs up to 40% of foreign workers, the company has drawn up a comprehensive process to ensure the smooth application of the Decree No.143 for foreign workers.

Source : Baodautu

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