Many businesses owe billions in social insurance

	Social Insurance actively reforms administrative procedures, facilitating business
	Reforms to ensure social insurance key pillar in social security system
	Tax authority “refuses” to collect insurance premium

The reason for the high amount of debt is because many businesses in the locality face difficulties in production and business, operating in moderation. Photo: ST.

Multi-billion liabilities owned are affecting workers' rights

Topping the list of debt in social insurance, health insurance and unemployment insurance in Hanoi by the end of May 31, VIT Garment Export Co., Ltd., located at Quang Minh Industrial Park, Me Linh, Hanoi, has 19 months' worth of unpaid social, health and unemployment insurance, amounting to over VND23 billion, affecting the interests of 875 employees. The second is VTC Digital Television, located on the 9th floor, Building 23 Lac Trung, Hai Ba Trung, Hanoi, owing 17 months of social, health and unemployment insurance with an amount of nearly VND14 billion for 700 employees. Next is Minh Quan High-Tech Investment and Development Joint Stock Company at O2 Restaurant, Van Khe, La Khe, Ha Dong, Hanoi, has been in debt for 15 months with a debt of more than VND12.7 billion of 590 employees.

In addition to businesses with a debt of tens of billions of dong, Hanoi Social Insurance Agency also lists units with less than a few billion dong of debt but also directly affects the interests of hundreds of workers. Currently, Song Da 6 Joint Stock Company, having an address at Nha TM, Van Khe, La Khe, Ha Dong, owes more than VND6.8 billion, affecting 796 workers; Construction and Investment Joint Stock Company No.4, located at the Administrative Organization Office, 8th floor ICON 4, 243A Building, De La Thanh, Dong Da, Hanoi also owes over VND6.7 billion of 172 employees; Hanoi Radio & Television has an address at 5 Huynh Thuc Khang Street, Dong Da District, Hanoi, owes more than VND5.7 billion, affecting 615 employees; Construction Joint Stock Company No.2, located at the 3rd floor of N03-T8 Building, Diplomatic Corps, Xuan Tao Ward, Bac Tu Liem District, Hanoi is also in debt of nearly VND5 billion, affecting 116 employees.

What are reason?

According to Ms. Dam Thi Hoa, Deputy Director of Hanoi Social Insurance, the reason for the high increase in the amount of debt is because many businesses in the locality face difficulties in production and business, operating in moderation. The amount of debt in non-state enterprises accounted for a large proportion. The number of enterprises dissolved or stopping operation tends to increase, the handling of social insurance and health insurance debts for enterprises dissolves and there are no regulations and guidelines for settlement.

In order to reduce the rate of social insurance debt, Hanoi Social Insurance has taken drastic measures to coordinate departments and agencies to strengthen inspection, examination and protection of legitimate rights of workers. By the end of June, Hanoi Social Insurance conducted inspections at 2,119 employers with the amount of debt of VND380.4 billion, recovering VND200.2 billion (reaching 52.6%).

Referring to the cause of the above debt, representatives of VIT Garment Export Co., Ltd. said because the unit has a lot of employees, the monthly social insurance and health insurance premiums are also very high, at about VND2 billion per month. Meanwhile, due to specific production in the garment sector, in the first months of the year, there are few orders and limited revenue sources, while the company ensures the payment of salaries and benefits for employees on Lunar New Year, so it is difficult to balance revenue and expenditure, leading to social insurance and health insurance debts.

Representatives of this enterprise also pledged to ensure full social and health insurance payments when there is revenue, which is usually the fourth quarter every year.

In the fourth quarter of 2018, this enterprise paid VND23 billion dong to remedy debt, and the debt decreased to VND14 billion.

Recently, the social insurance agency has created flexible conditions for businesses by allowing them to pay a part of the debt owed to social and health insurance, thereby solving short-term problems for employees such as illness and maternity through December, 2018.

This enterprise also proposed that the Social Insurance Agency allow them to pay part of the debt of social and health insurance to settle benefits, close the social insurance book for the number of employees who have retired from this unit with about 300 people.

In order to avoid enterprises racking up social insurance debt, they must bear the situation of enterprises after equitization or after restructuring still have to bear the old debts owed by the "history" from tens of years ago, avoiding the increase in interest amount each year, Hanoi Social Insurance Director Nguyen Duc Hoa said since 2016, the way to calculate the social insurance debt interest rate has changed, only calculating the previous year's debt transferred to the next year to calculate the interest, no longer the "interest rate". The level of calculation is determined by the Government, not decided by the social insurance agency. When an employee requests to close their workbook, they will give priority to pay the previous real number and the following interest amount.

In addition, according to Article 93, the Law on Social Insurance stipulates that the social insurance agency only implements social insurance policies, does not have the authority to pay interest on social insurance debt. There are currently no legal provisions to accept this issue, so the Social Insurance Agency cannot implement this issue.