VietNamNet Bridge – The Ministry of Labor, Invalids and Social Affairs is drafting a decree on compulsory social insurance for occupational accidents and diseases, in which the insurance rate is proposed at 0.5% of a company’s total payroll fund, compared to the current 1%.


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In a recent document the ministry sent to the Government, the 2014 social insurance law stipulates that employers shall contribute 1% of their salary funds to the occupational accidents and diseases fund on a monthly basis.

The ministry, in accordance with the Government’s Resolution No. 35 on support for enterprises until 2020, conducted a review of the current social insurance regime for occupational accidents and diseases. The result showed the rate of its expenditure and revenue does not exceed 10%, which has been stable in recent years.

Even though the occupational safety and health law which took effect in mid-2016 stipulates some extra expenditures, this rate does not exceed 25%.

Therefore, the new premium rate for occupational accidents and diseases which will be slower than the current rate and applied in a short-term period is completely feasible with an aim of reducing costs for enterprises.

The ministry has floated two options. One is to reduce the rate for all sectors and jobs to 0.5% of the salary fund. The other is to offer different reduction rates depending on levels of risk and accident consequences for each sector and job.

The ministry said the second option would encourage employees to take proactive steps towards prevention, maximizing occupational accidents and diseases compared to the first choice. However, flexible premium rates should be calculated.

According to the ministry, the first option is simpler than the second and can be applied immediately. Besides, one of the social insurance characteristics is the sharing of risks among participants. Therefore, the ministry would propose the draft decree based on the first option, and evaluate impacts in three years of its implementation to consider the second option’s feasibility.

The new decree should be issued as soon as possible to support local firms. It will take effect 45 days after signing, and be applicable by the end of 2019.


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