Due to the continuous rainstorm in the area, our rice production business is facing many difficulties. Our agents have to stop business for more than 1 month since there are no goods to be delivered to customers. We have to temporarily suspend 60% of the number of our employees which was up to 100 people (with 100% insurance premiums). In such difficult conditions, can we suspend social insurance payments to reduce the burden? And how long can it be suspended? Shall we be sanctioned if we do not pay social insurance for a long time?
FDVN’s opinion:
Sincerely thank you for your concerning our legal consulting service. We are glad to give you our advice for your question.
Legal basis:
– Law on social insurance 2014;
– Law on handling administration violation 2012;
– Decree No. 115/2015/NĐ-CP dated on November 11, 2015, 11/11/2015 on guidance on the law on social insurance regarding compulsory social insurance
– Criminal Code 2015 added and amended in 2017;
| – Decree No. 95/2013/NĐ-CP (adding and amending Decree No. 88/2015/NĐ-CP) on penalties for administrative violations against regulations on labour, social insurance, and overseas manpower supply. |
[1] Conditions for the employer to suspend social insurance payments
According to Point a, Clause 1, Article 88 of Law on social insurance 2014:“ In case employers meet with difficulties and have to suspend their production or business activities, making them and their employees unable to pay social insurance premiums, the payment to the retirement and survivorship allowance fund may be suspended for 12 months at most;”
Besides, according to Clause 1, 2 Article 16 of Decree No. 115/2015/NĐ-CP:
“1. The cases of suspension of payment to the fund of retirement and survivorship:
a) Suspend business operation in 1 month or longer because the employers meet with difficulties due to their structural or technical changes, or economic crisis or recession, or economic restructuring according to state policies or international commitments.
b) The employers meet with difficulties due to natural disasters, conflagration, epidemic diseases, or bad harvest.
2. Conditions for suspension of payment to the fund of retirement and survivorship:
Each employer, under any of the cases prescribed in Clause 1 of this Article and satisfying any of the following conditions, shall be entitled to suspend payment to the fund of retirement and survivorship:
a) Failing to provide works for employees, in which there are 50% or more of total employees determined before the business suspension that is subject to social insurance;
b) Suffering the damage of 50% of total assets’ value due to natural disasters, conflagration, epidemic diseases, or bad harvest (excluding land value).”
Your company is facing difficulty due to acts of God leading to suspend business operation for 1 month and temporarily suspend 60% of employees. Thus, you are allowed to suspend payment to the fund of retirement and survivorship and not allowed to suspend payment to the other insurances.
[2] Period of suspension of payment to the fund of retirement and survivorship:
The period of suspension of payment to the fund of retirement and survivorship not exceeding 12 months. In the period of suspension of payment to the fund of retirement and survivorship, the employer must still contribute to the fund of sickness and maternity and the fund of occupational accidents and occupational diseases. Upon the expiration of the time limit for payment suspension, employers and employees shall continue paying social insurance premiums and make supplementary payment for the suspension period. The supplementary amount paid for the suspension period is not subject to late- payment interest under Clause 3, Article 122 of this Law.
[3] Penalties for Violations against regulations on social for employees:
3.1. Sanction of administrative violations:
The employer shall be liable to a fine of 18% – 20% of the compulsory social insurance and unemployment insurance premium at the time the administrative violation is recorded (not exceeding 75,000,000 VND) when failing to buy compulsory social insurance and unemployment insurance for all the workers that must have social insurance and unemployment insurance. (Clause 3 Article 26 of Decree No. 95/2013/NĐ-CP dated on June 22, 2013). This penalty is used for individual employer and shall be twice as much as those applicable to individuals for organizations.
Besides, violators are also subject to remedial measures prescribed in Clause 4, Article 26 of Decree No. 95/2013/ND-CP:
a) Compelling the payment of the omitted or deferred compulsory social insurance premium and unemployment insurance premium;
b) Compelling the payment of the interest on the omitted and deferred compulsory social insurance and unemployment insurance premium omitted or deferred in the year. In case that employers violating for 30 days or more shall not only fully pay the amount not yet paid or paid late and be handled in accordance with law but also pay an interest equaling 2 times the average interest rate of investment from the social insurance fund in the preceding year, calculated based on the late paid amount and late payment period. If they fail to do so, at the request of competent persons, related banks, credit institutions or state treasuries shall deduct money from the employers’ deposit accounts in order to pay the amount not yet paid or paid late and the interest thereon to the accounts of social insurance agencies. (Clause 3 Article 122 of Law on Social Insurance 2014).
3.2. Brought into criminal prosecution
… when committing the acts of evading payment of social insurance, health insurance, unemployment insurance for workers according to Article 216 Criminal Code 2015 (added and amended in 2017).
“Article 216. Evading payment of social insurance, health insurance, unemployment insurance for workers
a) A person who is responsible for paying social insurance, health insurance and unemployment insurance for his/her workers but fails to pay or pays insufficiently for 06 months or more in any of the following circumstances despite the fact that he/she has incurred an administrative penalty for the same offence shall be liable to a fine of from VND 50,000,000 to VND 200,000,000 or face a penalty of up to 01 year’s community sentence or 03 – 12 months’ imprisonment:
b) The amount of insurance contribution evaded is from VND 50,000,000 to under VND 300,000,000;
b) The offenders evades paying pay insurance for 10 – 49 workers.
This offence committed in any of the following circumstances carries a fine of from VND 200,000,000 to VND 500,000,000 or a penalty of 06 – 36 months’ imprisonment:
a) The offence has been committed more than once;
b) The amount of insurance contribution evaded is from VND 300,000,000 to under VND 1,000,000,000;
c) The offenders fail to pay insurance for 50 – 199 workers;
d) The offenders collect or deducts insurance contribution from the workers as prescribed in Point a or Point b Clause 1 of this Article but fail to pay insurance.
This offence committed in any of the following circumstances carries a fine of from VND 500,000,000 to VND 1,000,000,000 or a penalty of 02 – 07 years’ imprisonment:
a) The amount of insurance contribution evaded is ≥ VND 1,000,000,000;
b) The offender fails to pay insurance for ≥ 200 workers;
c) The offenders collect or deducts insurance contribution from the workers as prescribed in Point b or Point c Clause 2 of this Article but fail to pay insurance.
The offender might also be liable to a fine of from VND 20,000,000 to VND 100,000,000, be prohibited from holding certain positions or doing certain works for 01 – 05 years.
Punishments incurred by a corporate legal entity that commits any of the offences specified in this Article:
a) A corporate legal entity that commits this offence in any of the circumstances specified in Clause 1 of this Article shall be liable to a fine of from VND 200,000,000 to VND 500,000,000;
b) A corporate legal entity that commits this offence in the circumstances specified in Clause 2 of this Article shall be liable to a fine of from VND 500,000,000 to VND 1,000,000,000;
c) A corporate legal entity that commits this offence in any of the circumstances specified in Clause 3 of this Article shall be liable to a fine of from VND 1,000,000,000 to VND 3,000,000,000.”
Above are the advice of FDVN Limited Law Firm base on studying law provisions and theories. We hope that our opinions would be useful.
Legal Expert: Nguyen Thi Hai Nhi
FDVN Law Company
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