Effective from July 1, 2025
The 2024 Social Insurance Law (Law No. 41/2024/QH15), officially replacing the 2014 Law on Social Insurance, takes effect from July 1, 2025.
Below are some key updates that businesses need to be aware of:
I. Key Updates Affecting The Employer
1. Expansion of Mandatory Social Insurance Participation:
The new law expands the list of individuals subject to compulsory social insurance, including:
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Employees working under indefinite-term contracts or definite-term contracts of one month or more, even if the contracts are referred to by other names by the employers and employees, as long as they specify the job, salary, remuneration, and the management of one party.
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Employees who do not work full time with a monthly salary equal to or higher than the minimum salary used as the basis for compulsory SI contributions
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Enterprise managers, controllers, representatives of state capital, representatives of enterprise capital as prescribed by law; members of the Board of Directors, General Directors, Directors, members of the Control Board or controllers, and other elected management positions of cooperatives and unions of cooperatives as prescribed by the Law on Cooperatives (whether salaried or not).
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……….
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Foreign employees working in Vietnam under definite-term contracts of 12 months or more with an employer in Vietnam, excluding the following cases:
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Intra-company transferees as per regulations on foreign workers in Vietnam;
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At the time of contract signing, the employee has reached retirement age as prescribed in Clause 2, Article 169 of the 2019 Labor Code;
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International treaties to which the Socialist Republic of Vietnam is a member that provide otherwise.
2. Basis for calculating compulsory SI contributions and benefits:
Reference salary level
The new law replaces the "basic salary" with a "reference salary level" as the basis for calculating SI contributions and benefits.
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Minimum contribution base: reference salary level
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Maximum contribution base: 20 times the reference salary level
Article 7 of the 2024 SI Law: Reference level is an amount decided by the Government to calculate the premiums and benefits of certain types of SI specified in this Law. The reference level shall be adjusted according to the increase in consumer price index, economic growth, in consideration of the capacity of state budget and social insurance.
3. Payment deadlines
The 2024 SI Law changes the contribution deadlines as follows:
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In case of monthly payment: no later than the last day of the following month (previously, it was the current month).
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In case of quarterly or biannual payment: no later than the last day of the month following the contribution cycle (previously, the last day of the cycle).
4. Defining evasion and late payment behavior of SI, unemployment insurance (“UI”), and possible penalties:
Evasion is now defined more clearly according to the 2024 SI Law:
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More than 60 days overdue without full registration or under-registration of employees required to participate in SI/UI;
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Declaring the salary level for contribution base lower than prescribed;
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Failing to remit or underpaying SI/UI contributions for more than 60 days after the due date despite official reminders.
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Additional Government-defined cases may also be considered evasion.
In addition, the 2024 SI Law also amends and supplements provisions on remedies for late payment or evasion of compulsory social insurance and unemployment insurance:
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If the Social Insurance Agency detects that a business is late in paying or evading social insurance and unemployment insurance, the Social Insurance Agency will send a reminder, publicize information, and transfer it to the competent authority for handling.
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Remedies include::
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Enforced payment of the arrears plus an interest of 0,03%/day on the arrears to the social insurance and unemployment insurance funds.
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Administrative penalties or criminal prosecution as prescribed by law
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isqualification from commendation and awards.
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The Government shall elaborate the remedies.
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Employer liability: must compensate employees if the employer’s non-compliance affects their legitimate rights.
5. New rights and responsibilities of employers:
New rights include:
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Temporarily suspend contributions to the retirement and survivorship fund for up to 12 months in case of hardship;
New responsibilities include:
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Compensate employees according to the provisions of law if the employers do not perform or do not fully perform their responsibility to pay compulsory social insurance according to the provisions of this Law, causing damage to the legitimate rights and interests of employees.
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Coordinate and facilitate social insurance agencies to recover social insurance benefits received incorrectly by employees when there is a decision from a competent authority.
6. E-transactions in the SI sector:
The 2024 SI Law stipulates that social insurance books are issued in electronic and paper versions and shall have the same legal value. In addition, the law also stipulates that:
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By January 1, 2026: electronic issuance becomes mandatory; paper copies available upon request.
II. Key Updates Affecting The Employee
1. New sickness benefit coverage:
Per Article 45 of the 2024 SI Law, employees taking half-day sickness benefit are entitled to 50% of the sickness benefit per day.
2. Maternity benefits
The 2024 SI Law adds a new case subject to maternity benefits: Female workers required to take time off work for infertility treatment, given that they have paid social insurance for 6 months or more in the 24 consecutive months before giving birth.
In addition, the 2024 SI Law supplements and increases some benefits regarding maternity leave for male employees participating in compulsory social insurance when their wives give birth as follows:
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Increase the number of days off for each prenatal check-up: Maximum 5 times, each time no more than 2 days.
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Increase the period of time during which the employee is allowed to exercise maternity leave rights to 60 days since the date the wife gives birth, which can be divided into several periods.