The Law on Social Insurance 2024 (“the Law on SI 2024”) was passed on June 29, 2024, and will officially come into force on July 1, 2025. Before its effective date, on June 25, 2025, the Government issued Decree 158/2025/ND-CP (“Decree 158”) to guide the implementation of compulsory social insurance. This decree replaces several existing regulations, such as Decree 115/2015/ND-CP (“Decree 115”), Decree 143/2018/ND-CP, and Decree 33/2016/ND-CP, and introduces several notable amendments and additions:
1. Business Managers and Household Business Owners Now Covered by Compulsory Social Insurance
The Law on SI 2024 expands the group subject to compulsory social insurance, now including:
- Non-salaried business managers
- Registered household business owners
In particular, the subjects of business household heads are clarified in Resolution 158, including:
- Household business owners who pay taxes using the declaration method must participate in compulsory social insurance starting July 1, 2025.
- All other registered household business owners will be included from July 1, 2029.
Previously, according to the provisions of the Law on Social Insurance 2014 and Decree 115, only employees who have a labor contract or receive a salary are subject to compulsory social insurance payment. Decree 158 has put managers of non-salaried enterprises (Chairman of the Board of Directors, Director of a one-member limited liability company...) into the category of participating in compulsory social insurance. This regulation clearly demonstrates the consistency and coverage of the social insurance policy, avoiding legal loopholes when employees "dodge" the obligation to pay insurance premiums by declaring non-salary.
For business household owners with business registration, this is a group of subjects who have never been subject to compulsory participation in social insurance, although many business household owners actually have the same scale of operation as an enterprise. Accordingly, Decree 158 is divided into two stages: (1) From July 1, 2025: business households that pay taxes by the declaration method must participate in compulsory social insurance; (2) From July 1, 2029: the remaining business household owners (mainly the group of presumptive tax payers) will start to be subject to compulsory social insurance payment .
This is a step with a suitable roadmap, helping small business households gradually adapt to social insurance obligations. The classification according to the tax payment method shows the link between tax policy and social security, ensuring fairness among groups with equal incomes. However, this regulation will require social insurance and tax agencies to closely coordinate to identify the right subjects; on the other hand, it is necessary to clarify how to determine income as a basis for paying social insurance for groups without a specific payroll.
In addition to the addition of subjects who must participate in compulsory social insurance, Decree 158 also clarifies that the subjects receiving monthly salaries that are not subject to compulsory social insurance payment include:
- Employees working part-time have a salary in the month calculated according to regulations on salary as a basis for paying compulsory social insurance is lower than the salary used as the basis for paying the lowest compulsory social insurance.
- Employees working under probationary contracts in accordance with the labor law.
2. The reference level used as a basis for calculating the level of payment and social insurance entitlement will be adjusted by the Government according to the increase of the CPI index
- When the base salary has not been abolished, the reference level is equal to the base salary.
- When the base salary is abolished, the reference level shall not be lower than that base salary and shall be adjusted by the Government on the basis of the increase in the consumer price index and economic growth, in accordance with the capability of the state budget and the social insurance fund.
3. All regular and stable allowances and supplements are included in the salary on which social insurance premiums are paid
Decree 158 guiding the Law on Social Insurance 2024 stipulates that the salary as the basis for paying compulsory social insurance premiums for employees receiving monthly salaries is the monthly salary, including salary according to job or title, salary allowances and other additional amounts. In which, only allowances and additional amounts dependent or fluctuating according to labor productivity, working process and quality of work performance of employees are excluded. This means that any allowances and supplements specified in the labor contract and paid regularly and stably will be included in the salary on which social insurance premiums are based.
Regarding this issue, previously, Circular 06/2021/TT-BLDTBXH of the Ministry of Labor, War Invalids and Social Affairs instructed not to calculate the amount of money for benefits and benefits such as meals, gasoline, mid-shift meals; support for gasoline, telephone, travel, housing, etc money for childcare and child rearing; support when the employee has a relative dies, the employee has a relative who gets married, the employee's birthday, allowances for employees in difficult circumstances when they suffer from occupational accidents, occupational diseases and other supports and subsidies are recorded in separate items in the labor contract. Accordingly, businesses need to pay attention to this issue to adjust the social insurance payment rate or adjust the salary structure and labor contract accordingly.
4. Adjustment of regulations on arrears of social insurance collection and payment
- Amending and supplementing cases of arrears of collection and payment of compulsory social insurance:
The Law on Social Insurance 2024 allows arrears of social insurance collection and payment in the following cases:
+ To adjust the salary increase to increase the salary as a basis for paying compulsory social insurance premiums retrospectively.
+ In case a Vietnamese worker working abroad is entitled to extend the contract or sign a new labor contract right in the labor-receiving country, the arrears shall be paid after returning home.
+ Business household owners and business managers do not receive salaries if they pay after the deadline for social insurance payment at the latest in accordance with the Law on Social Insurance.
- Adjustment of the time of collecting late payment interest on the arrears amount:
According to the provisions of Decree No. 115/2015/ND-CP, in case the arrears take place after 6 months from the date of the decision to adjust the salary increase, the arrears will include late payment interest calculated on the payable amount.
However, Decree 158 adjusts the time of late payment interest collection earlier as follows:
+ For cases of salary adjustment or Vietnamese workers working abroad: the collection shall start after the last day of the month following the month in which the arrears are incurred.
+ In case the head of the business household and the enterprise manager do not receive salary: the collection shall start immediately after the time of payment as prescribed.
The collection of interest on late payment early shows the tendency to tighten the obligation to pay social insurance of employers, and at the same time increase the responsibility of enterprises in the issue of compulsory social insurance payment.
5. New guidance on suspending compulsory social insurance payments when employees are temporarily suspended from work
Decree 158 has specific provisions related to the obligation to pay compulsory social insurance in case the employee is temporarily suspended from work. Specifically: Employees who are suspended from work for 14 working days or more in a month shall temporarily suspend compulsory social insurance payments, in case of temporary suspension of work but the employer still pays full salary during the suspension period with the employee, compulsory social insurance compensation for the period of temporary suspension of work.
This regulation clarifies the obligation to pay social insurance in case the employee is suspended, avoids inconsistent application between enterprises and protects social insurance benefits for employees in case of suspension but still being paid full salary.
Decree 158 takes effect from July 1, 2025 – the same time as the effective date of the Law on Social Insurance 2024.
Comment: