Ha Van Tha, a carpenter who does seasonal work in Hanoi, is concerned that he would lose money under the recent revisions of the social insurance law, which will require employers and and workers with one- to three-month contracts to co-pay premiums on social insurance.

Only 150,000 businesses buy social insurance for their employees

As a result, under the revised Law on Social Insurance, seasonal workers with one- to three-month contracts will become eligible for paid leave for illness, pregnancy, work accidents or occupational disease, in addition to pensions for retirement.

The revised law expands the number of people who can benefit from social insurance and ensures coverage for workers in the event they lose the ability to work.

A number of workers, however, say they are not willing to join the compulsory social insurance scheme.

"I get paid only VND200,000 (US$9) a day. Although I am provided with meals, I can barely survive, and I can send home only a little money," said Tha of the northern province of Hai Duong.

"I'm very happy to learn that under the revisions, my employers will cover part of the social insurance for me. However, I'm concerned that my salary, which is already low, will be deducted to pay for the rest of the premium," Tha said.

Nguyen Van Hung, a seasonal electricity worker for a private company in Hanoi, said he was not willing to co-pay for social insurance.

"I signed a three-month contract, under which I earn VND4 million ($187) per month. The salary is only enough for me to pay my rent and meals, so I am not willing to have a salary deduction to co-pay for social insurance," he said.

Nguyen Tien, an HR manager at a company that organises wedding events, said the company often hired seasonal workers, especially during the year-end when demand for wedding celebrations rises.

"The workers are not interested in buying social insurance," Tien said.

Tien attributed the reason to complicated administrative procedures for social insurance registration.

Most workers only care about income instead of benefits they receive from social insurance, he said.

Tran Quoc Hai, deputy director of Loi Hanh Food Production and Trade Company, also said administrative procedures were the main barrier.

"It takes a week or longer to register for social insurance," Hai said.

When a large number of seasonal workers terminate their contracts at the same time, the company must complete complicated procedures to terminate social insurance, which is time-consuming and requires many staff to do the work, he said.

Challenges

The revised law, which has been passed by the National Assembly, focuses on the most vulnerable workers with contracts under three months, which accounts for 30-40 percent of the total number of workers.

But according to a representative from Hanoi Social Insurance agency, it is difficult for the agency to know the exact number of labourers at companies as they depend on reports from enterprises.

A representative from HCM City Social Insurance said it had worked with the Department of Planning and Investment and the Tax Department to urge businesses to buy compulsory social insurance for workers.

To date, more than 31,000 small enterprises with fewer than 10 workers in HCM City have joined compulsory social insurance, accounting for nearly 66 percent of the total number of enterprises taking part in social insurance in the city.

Bui Sy Loi, vice chairman of the National Assembly's Social Affairs Committee, said after eight years of implementing the Law on Social Insurance challenges such as complicated procedures and lack of transparency remain.

Pham Minh Huan, deputy minister of Labour, Invalids and Social Affairs, said complicated procedures were the most critical issue, adding that even when the workers terminated their contracts, issuance of social insurance cards had not been completed.

"If no drastic measures are taken, it is very tough to encourage workers to join social insurance," Huan said.

The country now has 17 million workers required to buy compulsory social insurance under the law, but only 11 million have done it, he said.

Solutions

Tran Thi Thuy Nga, chief of the Department of Social Insurance under the Ministry of Labour, Invalids and Social Affairs, recommends online management of social insurance, including issuance of electronic social insurance cards.

The government should also offer subsidies to workers to help them pay for compulsory social insurance, she said.

Dissemination of information and raising public awareness about joining social insurance are also needed.

Do Van Sinh, deputy director of the Vietnam Social Insurance, promised that it would reduce and simplify procedures for social insurance registration.

Nguyen Thi Lan Huong, chief of the Institute of Labour and Social Sciences, said any employer that failed to conform to the law on social insurance must be strictly punished.

Vietnam has more than 480,000 enterprises, but only 150,000 businesses buy social insurance for their employees, many of whom are seasonal workers.