New Social Insurance Law
Mai Nguyen
On its 7th section, the 15th National Assembly passed the new Law on Social Insurance to replace the 2014 Law on the same subject. The new Law shall take effect as from 1 July 2025. The following are key changes of the new law as opposed to the 2014 Law.
(i) The new Law adds new type of employees to be subject to the statutory social insurance scheme. Specifically, employees who sign a part-time labor contract of one month or more, with a monthly salary equal to or higher than the salary level used as a basis for the minimum compulsory social insurance payment.
(ii) The new Law clarifies cases where foreign workers in Vietnam are exempted from the statutory insurance scheme according to which foreign workers in Vietnam shall participate in compulsory social insurance if they work for employees in Vietnam under employment contracts with terms of at least 12 except in cases where they are internally seconded within the group companies, they have reached the retirement age by the time of conclusion of the employment contract under the Labour Code and where an international treaty to which the Socialist Republic of Vietnam is a signatory prescribes otherwise.
(iii) The 2024 Law has removed the provision on allowing people with long-term illnesses to take leave for up to 180 days. Instead, Article 43 of the Social Insurance Law 2024 stipulates that the sick leave period of employees is determined by the insurance payment period and working conditions, regardless of the illness.
(iv) The new Law stipulates that the social insurance contribution level of employees is based on the reference level instead of the basic level as currently applied. The reference level is the amount determined by the government for calculating payment and benefit levels for certain SI benefits. It is adjusted based on the increase in the consumer price index (CPI) and economic growth, considering the state budget’s capacity and the SI fund.
Further guidelines from the Government are expected to give effect to these new provisions.
Employers in Vietnam should be ready to take actions to accommodate these new law requirements.