Covid-hit corporates lament social insurance premium payments
Covid-hit corporates lament social insurance premium payments
Many companies are unhappy at being forced to pay employee social insurance premiums though their business itself might be at risk of closure.
Bars and karaoke parlors in HCMC's Bui Vien walking street are closed under the city's order due to Covid 19, March 15, 2020. Photo by VnExpress/Quynh Tran
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One of their key demands is suspension of the premiums for at least a few months rather than mere postponement. They are allowed to delay payment by six months.
Looking at the financial situation of his fresh flowers business with nearly 250 employees in Ho Chi Minh City’s District 3, Pham Hoang Thai Duong said it might only survive for another two months, and is looking for an exit.
Mortgaging his house to borrow from a bank is an option. He has furloughed three fourths of his workers so they could get up to VND 3.7 million ($159.5) a month in unemployment benefits.
The rest remain on the payroll, and he has to fully pay social and health insurance premiums and union fees. He is not interested in the six-month rollover since the accumulated amount of VND1 billion would become too great a burden, especially with the pandemic situation remaining unpredictable.
Nguyen Khanh Trinh, chairman of Clever Group, expressed similar frustration since his business has had to be suspended four times since the pandemic began early last year, and this time it is the worst. The HCMC branch has been shut for five weeks, and Hanoi and Da Nang for more than a month.
He said it is "illogical" that businesses are forced to pay social insurance premiums while they are not allowed to operate.
"Workers are not allowed to work, but they and businesses still have to pay ... social insurance and health insurance premiums."
Many small and medium-sized enterprises do not have enough cash flow and would shut down in the next three months if there is no support, he warned.
"Waiver and reduction of social insurance premiums for the short term, at least until the day employees can return to work, is the most meaningful and rational support."
One business owner explained he does not want to let employees go because it is a difficult time, and many have been with the company for a long time.
The Korea Chamber of Commerce and Industry and Singapore Business Association have also sought a waiver of payment of social insurance premiums for businesses during the period which they are closed.
According to experts, waiving or reducing social insurance premiums for a few months would not affect the fund. It currently totals VND789 trillion.
