More punishments proposed for shirking social insurance premium payment

The Ministry of Labor, Invalids and Social Affairs has suggested more measures for dealing with acts of shirking payment of compulsory social insurance premiums.

The Ministry of Labor, Invalids and Social Affairs (MOLISA) has suggested more measures for dealing with acts of shirking payment of compulsory social insurance premiums.

As proposed by the MOLISA in the draft Law on Social Insurance, apart from being forced to pay compulsory social insurance premiums as currently prescribed, violators would be subject to a late-payment interest equaling 0.03 percent per day over the total evaded premium amount. Employers who shirk the payment of social insurance premiums for six months or more would be suspended from using invoices. Meanwhile employees would be subject to exit postponement if committing social insurance premium evasion for 12 months or more. In more serious cases, social insurance agencies could also propose initiation of criminal proceedings.
 

In order to guarantee employees’ benefits, the draft sets out that employers would have to pay compensation for damage resulted from their failure to pay social insurance premiums or to pay premiums sufficiently and in time.

Also under the MOLISA's proposal, there would be five more groups of subjects covered by compulsory social insurance from January 1, 2025, the expected effective date of the draft law.

These five groups include: (i) owners of registered business households; (ii) non-salaried managers, supervisors, persons representing state capital amounts, persons representing capital amounts of enterprises in companies and parent companies, and cooperative managers; (iii) part-time employees; (iv) part-time employees in villages and residential groups; and (v) persons who are paid remuneration or salaries by, and subject to the management and supervision of, employers in accordance with the 2019 Labor Code but do not enter into any labor contract or agreement.

Such subjects would be protected from insurable risks and enjoy sickness, maternity, retirement and survivorship regimes with allowance levels equivalent to the social insurance premium rates they pay, the MOLISA says.

With the aim of gradually expanding the coverage of compulsory social insurance to all salaried employees, the draft law proposes assigning the Government to provide regulations on compulsory social insurance for other subjects in conformity with socio-economic conditions in each period.

By: VLLF