Evading social insurance payments for employees, businesses can be severely fined.
Enterprises are obliged to pay social insurance and unemployment insurance for all employees who work for enterprises and are subject to compulsory social insurance and unemployment insurance contributions.
The insurance rate will base on the salary agreed by the employee and the enterprise. Enterprises are obliged to pay the above insurance timely and full.
In case of enterprises evade payment, fail to pay social insurance or unemployment insurance premiums for employees, or pay improperly, they may be administratively fined with quite heavy fines.
Penalties for evading social insurance and unemployment insurance contributions
Pursuant to Clauses 4 and 5, Article 38 of Decree 28/on administrative penalties for violations arising from labor, social insurance and sending Vietnamese workers abroad under contracts, stipulates:
“4. Any employer committing one of the violations hereunder shall be fined at the rates of between 12% and 15% of total sum of compulsory social insurance and unemployment insurance contributions at the date of issuance of administrative penalty notice, but not exceeding VND 75,000,000, as follows:
- a) Making overdue payment of compulsory social insurance and unemployment insurance contributions;
- b) Making underpayment of social insurance and unemployment insurance contributions according to the prescribed rates not to the extent that they are accused of evasion of payment of insurance contributions;
- c) Making underpayment of social insurance and unemployment insurance contributions according to their total number of employees eligible for participation in compulsory social insurance and unemployment insurance plans not to the extent that they are accused of evasion of payment of insurance contributions.
- Any employer falling to pay compulsory social insurance and unemployment insurance contributions for all of their employees eligible for participation in compulsory social insurance and unemployment insurance plans not to the extent of being liable to criminal prosecution shall be fined at the rates of between 18% and 20% of total sum of compulsory social insurance and unemployment insurance contributions at the time of issuance of administrative penalty notice, but not exceeding VND 75,000,000.
- Any employer accused of evasion of payment of compulsory social insurance and unemployment insurance contributions not to the extent of being liable to criminal prosecution shall be fined from VND 50,000,000 to VND 75,000,000”.
Thus, if enterprises do not pay or evade pay for social insurance and unemployment insurance premiums, depending on the nature and extent, they may be fined up to 75 million VND. If the violation behavior is gravity, the business owner or operator may be subject to criminal prosecution.
At the same time, enterprises are forced to pay back the amount of compulsory social insurance and unemployment insurance contributions.
Note: This article is only for informational purposes and is not the legal advice of HTH & Partners. The article belongs to HTH & Partners, so it is subject to change without prior notice.
