Ministry moots insurance cuts to help businesses
Businesses could have their contributions to funds for labor accidents, occupational diseases and unemployment reduced by half under a new Government proposal.

Businesses could have their contributions to funds for labor accidents, occupational diseases and unemployment reduced by half under a new Government proposal.

The proposal was made at a regular cabinet meeting last weekend by Dao Ngoc Dung, Minister of Labor, Invalids and Social Affairs (MoLISA).

Businesses could have their contributions to funds for labour accidents, occupational diseases and unemployment reduced by half under a new Government proposal__Photo: Internet

He said the mandatory contributions could be cut after a review of different types of insurance funds.

The proposal was made under Resolution No. 35 on supporting and developing enterprises.

The Resolution authorizes MoLISA to review the different insurance funds in coordination with other ministries and agencies and propose a reasonable social insurance regime that ensures the interests of workers, enterprises and society.

The labor ministry feels that the new plan is feasible, Dung said.

Under the proposal, the employer will contribute 0.5 percent instead of 1 percent of the salary towards the fund for labor accidents and occupational diseases as well as the unemployment insurance fund.

Dung said that once the cut takes effect, it would help enterprises save about VND 5.4 trillion (USD 242 million) a year.

The proposed reductions would not affect the Social Insurance Fund as payouts from the above-mentioned funds were too small compared to the contributions received, MoLISA experts said.

For example, payouts from the labor accident and occupational diseases fund amounted to just eight per cent of total collection last year. The fund has accumulated about VND 26 trillion (USD 1.16 million) thus far, nearly 60 times higher than the payout, the cabinet heard.

A similar situation prevails with the unemployment insurance fund, the ministry said, adding that the proposed reductions would have a positive impact on businesses.

The plan would provide essential assistance to businesses as they were under pressure to lower salaries and production costs as competition heated up, it said.

If the plan is approved by the Government, amendments will be needed to Decree No. 37/2016/ND-CP which guides implementation of certain provisions of the Law on Occupational Safety and Hygiene, Dung said.

He also said the plan to lower contributions to the unemployment fund had to be submitted to the National Assembly Standing Committee for consideration.

Prime Minister Nguyen Xuan Phuc welcomed the proposal, saying the reduced rate of 0.5 percent contribution to the two funds would help businesses.

He asked the ministry to work with other ministries and agencies in studying the proposal and submit specific plans to the Government for approval.

Suing defaulters

In related news, a VNA report said yesterday that the Hanoi Confederation of Labor (HNCL) would coordinate with relevant agencies to sue enterprises that have not paid their insurance dues.

The confederation has authorized six of its units to complete procedures for taking seven defaulting enterprises to court, it cited deputy chairman Le Dinh Hung as saying.

The procedures should be completed by November and the lawsuits filed in December, Hung said.

The units have been advised to contact the People’s Court, social insurance organizations at the district level and legal consultancy divisions of the Hanoi Trade Union for more data and legal support, he added.

Nguyen Quoc Khanh, deputy head of the Hanoi Labor, Invalid and Social Affairs Department, said 31,428 enterprises out of a total of 195,000 enterprises and organizations in Hanoi have delayed paying insurance fees for their workers.

As a result, the city’s social insurance debt has risen to over VND 2 trillion (USD 88.9 million), he said.

HNCL Chairman Nguyen Thi Tuyen said clear regulations as well as instructions from the Government were needed to deal quickly and effectively with enterprises not paying their insurance contributions, hurting employees.

She said drastic measures were needed to punish enterprises who try to avoid paying their insurance contributions so that the rights and benefits of workers are ensured.- (VNS/VLLF)

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