The Labor Code is applicable to both employers (enterprises, agencies, organizations, co-operatives, etc.) and employees (Vietnamese and foreign employees). The employer is entitled to employ labor directly or via employment services or outsourcing service providers. Further under the law, the employer is responsible to implement the law provisions on social insurance. The law requires that the employer and the employee must participate in the mandatory social insurance.
Under the Law on Social Insurance, the Vietnamese citizens are entitled to join compulsory social insurance. The Vietnamese employees who work under labor contract with definite term and contract of more than three months are entitled to social insurance.
It is applicable to overseas workers also if they have been paying compulsory social insurance premiums.
The Government and Administrative Offices, Political Organizations, Socio-political organizations, foreign organizations, international organizations operating in Vietnam, etc. are covered as the employers that are required to contribute to compulsory social insurance.
Thus it can be seen that the employers and employees are required to contribute to the compulsory social insurance. The law also provides for administrative sanctions for non-compliance and violations depending on the nature, extent of violation and damage and also criminal prosecution. If there is a delay on payment by the employer, the employer may also be required to pay interest for the unpaid amount and also the contributions can be deducted from the Bank Account directly by the State Treasury.