The current pandemic caused by COVID-19 virus has left its impacts not only on the social life but also the whole economy. Many businesses are under difficulties while developments of the disease is yet to be predicted. In order to timely release such burdens for enterprises which suffered damages due to the COVID-19 pandemic, and to help them stabilize their business operations and overcome difficulties, implementing Directive No. 11/CT-TTg dated 04 March 4 2020 of the Prime Minister, Vietnam Social Security (VSS) issued Official Letter No. 860/BHXHBT dated 17 March 2020 regarding temporary suspension of payment to the pension and death benefit funds and the Vietnam General Confederation of Labor also issued Official Letter No. 245/TLD dated 18 March 2020 on deference of the deadline for payment of trade-union fee for enterprises affected by COVID-19 pandemic.
You will find below useful information related to the contents of the above mentioned decisions on (i) temporary suspension of payment to the pension and death benefit funds; and (ii) deference of the deadline for payment of trade-union fee.
1. TEMPORARY SUSPENSION OF PAYMENT TO THE PENSION AND DEATH BENEFIT FUNDS
At present, the payment rate to the pension and death benefit funds is 22%, of which employers pay 14% and employees pay 8%. Thus, the suspension of payment to the two funds is not only applicable to employers A but also to employees.
Enterprises operating in the sectors of transportation service, tourism, accommodation, restaurants and other special industries affected by COVID-19 may temporarily suspend their contributions to the pension and death benefit funds upon satisfaction of either of the following conditions:
+ Being unable to arrange jobs for employees, in which those who are participating in social insurance scheme and subject to temporary unemployment account for at least 50% of the total number of the employees present before business operations are suspended.
+ Having suffered damages of more than 50% of the total asset value caused by the pandemic (excluding the value of land).
Eligible enterprises will benefit from temporary suspension of contributions to the pension and death benefit funds until the end of June 2020. In case the COVID-19 pandemic does not abate by the end of June 2020, if any enterprise so requests, VSS will consider and continue the suspension until December 2020.
Upon expiry of the suspension period, employers and employees shall make payment to the pension and death benefit for the amounts payable during the temporary suspension period. Such payment, however, is not subject to late payment interest in accordance with the laws.
2. DEFERENCE OF THE DEADLINE FOR PAYMENT OF TRADE-UNION FEE
Manufacturing and business enterprises affected by the COVID-19 pandemic mean enterprises, in which the number of employees participating in social insurance scheme and subject to temporary unemploymentM accounts for more than 50% of the total number of employees subject to compulsory social insurance participation, may defer the deadline for payment of trade-union fee for the first six (06) months of 2020 until 30 June 2020. If the COVID-19 pandemic still persists and these businesses continue to face difficulties, the deadline will be deferred until 31 December 2020.
Therefore, implementing the timely guidance by the Prime Minister, the promulgation and implementation of official letters on temporary suspension of payment to the pension and death benefit funds as well as deference of the deadline for payment of trade-union fees by the Vietnam Social Security and the Vietnam General Confederation of Labor will exert a significant impact on the business community and the workers’ lives during such complicated context of the COVID-19 pandemic, contributing to implementing the dual-task assigned by the Prime Minister, preventing and fighting against the pandemic, as well as guaranteeing socioeconomic development, ensuring social welfare, security, the citizens’s health and safety; contributing to maintaining, stabilizing, improving production and business activities.
It is expected that labor administration agencies will stipulate additional guidelines or decisions which will help enterprises and workers overcome difficulties in production and business activities due to the COVID-19 pandemic.