Hundreds of enterprises in Dong Nai have failed to pay their social insurance premiums on time or in full, with the existing legal mechanism proving not enough of a deterrent.
Hundreds of enterprises in Dong Nai have failed to pay their social insurance premiums on time or in full, with the existing legal mechanism proving not enough of a deterrent.
Since the beginning of this year, 131 enterprises have defaulted on their commitments worth VND72 billion (US$3.4 million).
Deputy Director of the provincial Social Insurance Agency Pham Minh Thanh said: “These firms were in operation for a while but then stopped making payments. When we tried to trace firms at their registered addresses, we found they had already left.”
He said even though his agency had to resort to filing lawsuits, it was not enough to make the debtors pay.
Since 2007, the agency has filed lawsuits against 18 enterprises which had failed to pay VND17.6 billion ($838,000), and won. However, over the last four years, it was only able to retrieve VND5.6 billion ($267,000).
For enterprises that are no longer in operation, the agency has to wait until their assets have been liquidated before it collects outstanding social insurance payments, but their enterprises often use their funds to pay for other items.
Nguyen Thanh Tam, a former worker of UTC Viet Nam Company whose owner absconded with the social insurance funds said: “In my company, there are some workers who have paid their social security premiums for four years, but the company went bankrupt and didn’t pay its part of the social security premiums so they have lost everything.”
It is estimated that some 15,000 workers who have worked or are working in those enterprises share Tam’s story.
Thanh said as of now, the highest administrative fines were only set at VND30 million ($1,500), which was more like a slap on the wrist.
He suggested that to protect labourers’ rights, there should be some revisions on the order for payment procedure as stipulated in the Civil Law and the Law on Execution, because in practice, banks debts come before social insurance debt.
Thanh said enterprises who failed to make social insurance payments should be subject to criminal prosecution.
(Source: VNS)
