Nearly 2.8 million workers in debt for social insurance, are businesses skirting the law?

Nearly 27,000 businesses, units slow to pay, evade social insurance

At one point, there were up to 2.8 million workers nationwide owed social insurance by businesses, units, and organizations that were slow or overdue in paying social insurance for 3-12 months, and even evading social insurance payment. By the end of 2022, the slow payment, evasion of social insurance, both interest and principal, amounted to VND 8,560 billion, an increase of about 2.7% compared to the previous year, and there were nearly 27,000 businesses, units slow to pay, evade social insurance for workers.

Eight months late in paying social insurance for workers, by now Trong Phu Garment Company, Nghe An has been reminded three times by the local social insurance agency. The total debt of the company has now reached nearly VND 3.8 billion.

“Orders have decreased by 40-50%, leading to no income for workers. Given the difficult situation, the company has also notified specific debts to workers and employees in the factory”, said Phan Thi Thom, Deputy Director of Trong Phu Garment Company, Nghe An, explaining the reason.

Many times, when working at businesses with social insurance arrears, to understand the situation and urge payment, insurance officers are often faced with closed doors. Up to now, in Duy Tien town alone, Ha Nam province, the social insurance debt has reached more than VND 20 billion.

“Handling units that owe social insurance is really difficult. Because the sanctions of social insurance agencies are only to work, urge, and recommend to relevant agencies”, said Nguyen The Anh, Deputy Director of Social Insurance of Duy Tien town, Ha Nam province.

According to statistics from functional agencies, there are currently about 2.79 million workers nationwide who are owed social insurance by businesses for more than a month. Of these, more than 200,000 people have suspended benefits because the businesses have bankrupted, dissolved, or the owners have fled.

Insurance books are the only documents that have been delivered to nearly 300 employees of 19/5 Textile Company after they quit their jobs. And the nearly VND 14 billion that the company still owes to employees has not yet been paid after almost a year, even though the case has been transferred to the provincial police agency.

Social insurance payments can be considered as the precious savings of workers, as well as the money they accumulate for their retirement to cover their living expenses. However, with debts of tens of billions of social insurance like at 19/5 Textile Company, retired workers still do not know where to rely on to support their lives.

Currently, there are about 2.79 million workers who are owed social insurance by businesses for more than a month.

Unable to completely resolve

Not being considered as a compulsory collection like taxes, not affecting production and business, not being criminally prosecuted… that is why, for many years, the long-lasting slow payment, debt, and evasion of social insurance have not been completely resolved.

It is impossible to deny the difficulties of businesses in the current period. However, not a few businesses have taken advantage of this situation to delay and painstakingly pay insurance. Meanwhile, there is a paradox that workers have had their insurance premiums deducted from the social insurance fund, but businesses have not paid it. This is a risk leading to an imbalance in income and expenditure for social insurance. And in the long run, it will affect the rights of workers in the future.

There are regulations on handling businesses that evade social insurance payments. However, in reality, due to the overlapping regulations that make the processing process very difficult. Most cases of evading social insurance contributions are transferred to the police, but cannot be prosecuted.

Colonel Dang Hoang Dinh, Deputy Head of the Economic Crime, Corruption, and Smuggling Investigation Police Department of Binh Duong province, said that for acts of evading social insurance and health insurance, such behavior is subject to administrative sanctions.

“That means this behavior can be understood as not paying social insurance. However, the regulations on handling administrative violations of social insurance agencies punish employers for the act of delaying payment, while the act of evading payment is very difficult to implement. Therefore, until now, the police and legal agencies have not reached a consensus on how to handle it”, Colonel Dang Hoang Dinh said.

By the end of 2022, the slow payment, evasion of social insurance, both interest and principal, amounted to VND 8,560 billion

Businesses that evade payment cannot be resolved, the revenue of the social insurance fund is at risk of decreasing, while the situation of exploiting health insurance is quite complicated. This is a problem that arises in the use and management of social insurance funds.

Nguyen Phi Hien, Deputy Director of Social Insurance of Binh Duong province, said: “According to the guiding decrees on penalties, social insurance agencies can only penalize businesses for slow payment, while the act of evading payment is very difficult to handle. So far, the police as well as the legal enforcement agencies have not agreed on how to handle it”.

Le Dinh Quang, Deputy Head of the Policy and Law Committee, the Vietnam General Confederation of Labor, said that it is necessary to enhance legal awareness for employers. Furthermore, it is necessary to continue amending laws, towards increasing sanctions, increasing responsibility, adding sanctions to ensure implementation.

Many other viewpoints have also been put forward, such as postponing exit for business owners who evade payment, to avoid conflicts with the postponement of exit according to the provisions of the Penal Code, the Code of Criminal Procedure. Or the authorities will seal the company’s invoices as the tax authorities do when businesses evade social insurance payments. But this issue is still being discussed and included in the Social Insurance Law (amended) in the near future.

In whatever form, the abuse and exploitation of social insurance and health insurance funds are behaviors that need to be stopped and have stronger measures to prevent and handle them.

To ensure the rights of participants in social insurance, labor experts believe that it is necessary to add some measures, sanctions such as deducting social insurance debts from bank accounts after receiving reminders from the social insurance agency for a certain period, which can be 3 months, publicly disclosing the identities of units that owe social insurance in the media.

At the same time, it is necessary to have synchronous and feasible regulations to overcome the current difficulties and obstacles in civil lawsuits and criminal prosecution against employers who delay or evade social insurance payments.