Laws of Vietnam

CIRCULAR No.17-LDTBXH/TT OF APRIL 24, 1997 GUIDING THE IMPLEMEN-TATION OF THE COMPULSORY SOCIAL INSURANCE REGIME FOR LABORERS ON DEFINITE TERM WORKING CONTRACTS ABROAD

Pursuant to the Labor Code, the Social Insurance Regulation issued together with Decree No. 12-CP of January 26, 1995 and Decree No. 07-CP of January 20, 1995 of the Government on the sending of Vietnamese laborers to work for definite terms abroad; the Ministry of Labor, War Invalids and Social Affairs hereby provides the following guidance for the implementation of the compulsory social insurance regime applicable to such persons:

I. APPLICABLE OBJECTS

The persons covered by the social insurance regime in this Circular are laborers working for definite terms abroad in accordance with the provisions of Decree No. 07-CP of January 20, 1995 of the Government, including:

- Skilled (including experts) and unskilled workers;

- Graduates of vocational schools in the country and abroad;

- Laborers working in enterprises of all economic sectors, in administrative and non-business units and social organizations.

II. SOCIAL INSURANCE REGIME

The pension and death allowance regime shall be applied in accordance with the provisions in Section IV and Section V, Chapter II of the Social Insurance Regulation issued together with Decree No.12-CP of January 26, 1995 of the Government and Circular No.06/LD-TBXH of April 4, 1995 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of Decree No.12-CP of the Government.

2. Payment of social insurance premiums.

a/ Source of social insurance premiums:

Throughout his/her working term abroad, the laborer shall have to deduct his/her monthly salary or wage to pay social insurance premiums.

b/ Levels of monthly social insurance premiums to be paid:

+ A laborer who has taken part in the compulsory social insurance system in Vietnam shall pay his/her social insurance premium equal to 15 per cent of his/her monthly salary or wage before he/she left to work abroad. This salary may be based on his/her rank or, grade or his/her contractual salary and includes the difference between the actual and paid salaries, the rank allowances, area allowances, and cost-of-living allowances (if any).

For example: A ship captain before working for a definite term abroad already paid in Vietnam social insurance premiums based on his/her salary as stipulated in Decree No. 26-CP of May 23, 1993 of the Government, i.e. 3.45 times the minimum salary and a rank allowance of 0.4%. When working abroad he/she shall pay a monthly social insurance premium based on the following salary:

- Base salary: 3,45 x 144,000 VND = 496,800 VND

- Rank allowance: 0.4 x 144,000 VND = 57,600 VND

Total = 554,400 VND

The monthly social insurance premium to be paid is: 554,400 VND x 15% = 83,160 VND

+ A laborer who has never paid compulsory social insurance premiums in Vietnam or who has worked and paid social insurance premiums in Vietnam but already received the fringe benefit therefrom shall pay a monthly social insurance premium equal to 15% of double the minimum salary of a State employee (144,000 VND now).

For example: An unemployed laborer who has signed a definite term contract to work abroad shall have to pay a monthly social insurance premium over the whole period he/she works abroad as follows:

(144,000 VND x 2) x 15% = 43,200 VND/month

+ The social insurance premiums calculated on the basis of the salary or double the minimum salary shall be adjusted proportionally with the adjustment of the minimum salary for State employees in Vietnam.

c/ How to pay social insurance premiums

+ A Vietnamese economic organization which sends laborers to work abroad shall have to collect social insurance premiums paid by the laborers and remit them to the Vietnamese social insurance agency in the locality where its head office is located and record them in the laborers’ social insurance books, certified by the economic organization and the social insurance agency.

+ Social insurance premiums shall be paid every six months. The first payment shall be made at the end of the sixth month after the laborer starts to work abroad; the schedule of subsequent payments shall be set by the concerned economic organization to suit its labor management conditions. The laborer shall have to pay fully his/her monthly social insurance premium for all the months of his/her work abroad.

3. Right to enjoy social insurance:

The period for which the laborer working abroad has paid social insurance premiums shall be counted for the laborer to enjoy social insurance:

a/ After returning home, if the laborer is eligible for the pension regime, he/she shall enjoy such regime in accordance with the Social Insurance Regulation issued together with Decree No. 12-CP of the Government and Circular No. 06/LD-TBXH guiding the implementation thereof.

b/ After returning home, if the laborer is not eligible for the pension regime as defined in Articles 25 and 26 of the Social Insurance regulation and discontinues working, he/she shall either enjoy the lump-sum allowance or wait until he/she is eligible for the pension regime as prescribed in Article 28 of the Social Insurance Regulation.

c/ After returning home, if the laborer continues working and paying social insurance premiums, the period covered by his/her social insurance abroad shall be added to the period covered by his/her social insurance in Vietnam for the enjoyment of social insurance.

d/ If the laborer dies during his/her working term abroad for which he/she already paid social insurance premiums, he/she shall be eligible for the death allowance in accordance with the Social Insurance Regulation issued together with Decree No. 12-CP of the Government and Circular No. 06/LD-TBXH guiding the implementation of the Social Insurance Regulation.

The pension, lump-sum allowance or death allowance related to the salary during the period of the laborer’s work abroad shall be based on the different wage levels for which social insurance premiums have been paid abroad as defined in Part b, point 2, Section II of this Circular. These wage levels may be adjusted according to the minimum wage of State employees at the time the pension or lump-sum allowance regime is applied.

III. ORGANIZATION OF IMPLEMENTATION

1. A Vietnamese economic organization sending a laborer to work abroad shall have to certify and manage his/her dossier and insurance books during the period they work abroad.

The dossier managed by the economic organization shall include:

a/ For a laborer who has paid social insurance premiums in Vietnam, his/her dossier must include:

- The original dossier which clearly describes his/her work record, certified by the labor-employing agency or unit.

- The social insurance book which clearly describes the laborer’s work record and payment of social insurance premiums before he/she goes to work abroad.

- The decision to send the laborer for definite term work abroad or his/her working contract.

b/ For a laborer who has never paid social insurance premiums in Vietnam, the economic organization shall draw up a complete dossier and request the Vietnam Social Insurance organization to issue the social insurance book. It shall manage such dossier and insurance book for the laborer for the whole period of his/her work abroad.

When it ceases its operation the economic organization which sends the laborer to work abroad shall have to hand over all the dossiers relating to social insurance of the laborer under its management to the social insurance agency where the economic organization pay social insurance premium.

When the laborer returns to Vietnam, the managing economic organization shall have to make a dossier for him/her to enjoy social insurance or return the dossier and social insurance book to him/her so that he/she can register their payment of social insurance premiums at another agency or unit.

2. The Vietnam Social Insurance shall issue the social insurance book, organize the collection of social premiums paid by the laborer working abroad through the economic organization and apply the pension, the lump-sum allowance or the death allowance regime for the laborer in accordance with the Social Insurance Regulation issued together with Decree No. 12-CP of January 26, 1995 of the Government.

If the laborer violates the social insurance regulations, he/she shall be dealt with in accordance with the provisions in Chapter VI of the Social Insurance Regulation issued together with Decree No. 12-CP of January 26, 1995.

3. If the laborer in the category specified in Decree No. 370-HDBT of November 9, 1991 of the Council of Ministers (now the Government) and Decree No. 07-CP of January 20, 1995 of the Government has worked abroad and paid social insurance premiums as prescribed by the State before the effective date of this Circular, the time he/she worked abroad and paid social insurance premiums shall be accounted for so that he/she may enjoy the pension, lump-sum allowance or death allowance according to this Circular.

The economic organization shall have to:

- Certify the time the returning laborer, who has worked and paid social insurance premiums abroad to serve as the basis for the Vietnam Social Insurance organization to calculate the appropriate social insurances.

- Fill the procedure of issuing social insurance book to the laborer, writing therein the amount of monthly social insurance premium to be paid and manage such book.

IV. IMPLEMENTATION PROVISIONS

1. This Circular takes effect 15 days after its signing. The earlier provisions which are contrary to this Circular are now annulled.

2. Any problem arising during the process of implementation should be reported to the Ministry of Labor, War Invalids and Social Affairs for consideration and settlement.

The Minister of Labor, War Invalids and Social Affairs

TRAN DINH HOAN