What is Mandatory Social Insurance? Key Facts You Need to Know

What is Mandatory Social Insurance?

Mandatory social insurance is a type of insurance that both employees and employers are required to participate in under the law. It is a crucial social welfare program aimed at ensuring the livelihood of employees when they encounter risks such as illness, maternity, workplace accidents, occupational diseases, unemployment, or retirement.

Purpose of Mandatory Social Insurance

• Protect Employees: Provide financial stability for employees and their families during unexpected circumstances.
• Distribute Social Risks: Reduce the economic burden on society and families when employees face difficulties.
• Promote Economic Growth: Allow employees to work confidently, contributing to economic and social development.

Key Benefits of Mandatory Social Insurance

Employees participating in mandatory social insurance, when eligible, can enjoy the following benefits:

• Sickness: Financial support for medical treatment when employees fall ill.
• Maternity: Assistance for maternity-related costs and child-rearing for female workers.
• Workplace Accidents and Occupational Diseases: Compensation for health and property damages caused by workplace accidents or occupational diseases.
• Retirement and Survivors' Benefits: Pensions for retirees and survivor benefits for family members in the event of the employee’s death.

Who Must Participate in Mandatory Social Insurance?

• Employees: All employees working under labor contracts are required to participate.
• Employers: Companies, agencies, and organizations employing workers are responsible for collecting and contributing social insurance payments into the social insurance fund.

Employee Rights under Mandatory Social Insurance

• Participate and receive benefits as per the Social Insurance Law.
• Receive unemployment benefits if eligibility requirements are met.
• Timely and full pensions and social insurance allowances.
• Health insurance coverage in the following cases:
  • While receiving retirement pensions.
  • During maternity leave when giving birth or adopting a child.
  • While receiving monthly allowances for workplace accidents or occupational diseases.
  • While receiving sickness benefits.

Mandatory Social Insurance Contribution Rates

For Vietnamese Employees

Note: Employers in industries with high-risk work environments may qualify for a lower occupational accident and disease insurance rate of 0.3%, subject to approval by the Ministry of Labor, War Invalids, and Social Affairs (MOLISA).

For Foreign Employees

If you need assistance with social insurance registration procedures for businesses and employees, you can contact the team at Zora Consulting for advice and prompt support.