Vietnamese companies are forecast to owe VND6 trillion (USD285.7 million) in social insurance payments to their staff by the end of the year.

By the end of August, total social insurance debts were estimated at VND4.61 trillion (USD219.5 million). Up to 70% of the total came from non-state and foreign firms.

The shocking news was released at a conference in Hanoi on November 29 to review the five-year implementation of the Law on Social Insurance.

According to Mai Duc Chinh, Vice Chairman of the Vietnam General Confederation of Labour (VGCL), by the end of 2010, more than 19,000 enterprises in Ho Chi Minh City owed nearly 700,000 labourers VND374 billion (USD17.8 million) in insurance payments. Some enterprises owe up to more than VND10 billion (USD476,190).

Bui Ngoc Ha, Deputy Director of Hanoi Social Insurance, was cited by Tien Phong Newspaper as saying that in the first of nine months of 2011, local enterprises owed VND864 billion (USD41.1 million) to their staff. The list included major state-owned businesses such as the Bridge Joint Stock Company No. 12 which owed VND12 billion (USD574,162) Bridge Joint Stock Company No. 14, VND7.6 billion (USD361,904) and Vit- Garment For Export Co.,Ltd. VND7.4 billion (USD352,380).

The money can legally be extracted from the companies’ bank accounts, but most of serious offenders have left their accounts empty, leaving authorities having to turn to slow legal measures to recover the debts.

Bui Si Loi, Deputy Head of the National Assembly's Social Affairs Committee, said that after visiting localities, he found that many had deliberately not co-operated with agencies in managing the responsibilities of local enterprises, creating an opportunity for them to evade their legal responsibilities.

Staff shortages in social insurance agencies in Hanoi and Ho Chi Minh City in particular had also affected the collection process, leaving workers having to wait for several months, Loi added.

Mai Duc Chinh, Vice Chairman of the VGCL, said a lack of criminal sanctions related to companies owing social insurance had been revealed as a loophole in the Law on Social Insurance.

Tran Thi Thuy Nga, Head of the Ministry of Labour, Invalids and Social Affairs’ Social Insurance Department, suggested lodging criminal charges and higher fines against firms which owe social insurance payments.

According to the Law on Social Insurance, the fees offset loss of employee earnings for days off due illness, accidents, leave, and unemployment.

Under the law, employers are required to set aside a proportion of their staff’s monthly wages salary to be paid into the social insurance fund.