Vietnam’s Social Insurance Reduction: Decree 58 on Occupational Diseases and Accidents
- Vietnam issued Decree 58 allowing businesses in certain sectors to contribute to a lower social insurance rate if they meet eligibility.
- The Decree takes effect on July 15, 2020.
- Businesses in the eligible sector as per Decree 58 should make a note to benefit and avail of the reduced contribution rates.
Vietnam’s government issued Decree 58/2020 ND-CP (Decree 58) for employers in specific industries that allow them to reduce their Social Insurance (SI) contribution for the occupational diseases and accident category. Decree 58 comes into effect on July 15.
Eligibility under Decree 58
Businesses that operate in the specific sectors under the occupational diseases and accident category are eligible to contribute to a lower rate of 0.3 percent compared to the current rate or 0.5 percent:
- Plastic or rubber-based chemical production;
- Metal production;
- Power generation and transmission;
- Fishery and aquatic processing;
- Garment, apparels or shoes manufacturing;
- Scrap recycling; and
- Environment cleaning.
Businesses that want to apply for the lower SI contribution rate must meet the following conditions as stipulated in Article 5 of Decree 58:
- They should not have been subject to administrative or penal liability in violation of occupational safety, safety, sanitation, and social insurance in the past three years;
- Have reported occupational accidents, safety, and sanitation issues accurately and in a timely manner for the past three years; and
- The number of accidents in the last year has been reduced by at least 15 percent compared to the average of the last three years; or
- No accidents have occurred in the last three years.
Businesses will then need to submit an application form with the relevant documents such as Form 1 in Decree 58 to the Ministry of Labor, Invalids and Social Affairs (MOLISA).
If approved, the social insurance contribution reduction for the business will be valid for a period of three years. The business can renew the application to continue to benefit from the lower contribution rate.