HCMC employers funnel insurance money into their own pockets

10:23' 22/07/2009 (GMT+7)

A worker collects his social insurance compensation at an insurance agency in Ho Chi Minh City. VietNamNet Bridge - Thousands of workers in Ho Chi Minh City are working without health and social insurance policies as employers illegally pocket chunks of their salaries meant to pay for mandatory insurance. The city’s Social Insurance Agency, which is also in charge of health insurance, told Thanh Nien Monday it was filing a lawsuit against more than 40 businesses for neglecting to pay more than VND200 million (US$11,230) each in insurance fees. The agency reported they had failed to collect a total of VND62 billion ($3.48 million) of health and social insurance fees from nearly 200 companies that had ignored payment. In Vietnam, workers pay 3 percent of their salary each for both health and social insurance policies and employers are required to deduct the money from salaries to pay the insurance agency directly. Agency director Cao Van Sang said the companies in the lawsuit had ignored payment although they had signed a commitment to pay the fees after several inspections and collection efforts by the agency. This lawsuit includes the highest number of companies the agency has ever filed suit against since its first case in late 2007, the agency reported. Nguyen Dang Tien, head of the agency’s inspection section, said the agency had rejected negotiation efforts as the companies had been using talks to delay payment, he said. He said several companies had requested negotiations as a way to extend payment deadlines, adding that nearly all the firms had blamed salary hikes and the global recession for the delays. The agency also rejected offers by some of the companies to pay just parts of their fees, he said. Tien also said many companies were aware of the lawsuit but had continued pocketing the insurance fees collected from workers without paying a single dong to the insurance agency. He said besides losses to the state budget, the lack of payments also meant that workers would not be entitled to their rightful benefits, especially when they fall ill or get injured. Lax rules “Regulations have not deterred, but only encouraged violations,” said Dang Quang Dieu, deputy head of the Law and Policy Bureau under the Vietnam General Confederation of Labor. He said the actions taken to enforce the payment rules were too lax. “The measures are inadequate: the maximum fine of some dozens of millions of dong is issued against those who ignored billions of dong in insurance fees.” He said health and social insurance violations would have serious and long-term negative consequences on workers. Stricter penalties, including criminal charges, were needed as a deterrent, he said. Nguyen Van Tien, chief inspector of the Ministry of Labor, Invalids and Social Affairs, also said that many violating companies had agreed to pay the fines without paying the insurance fees. “Some showed their business’ bank account figure to prove they had no money,” he said. “But they have other bank accounts to deposit money and we were unable to inspect those.” VietNamNet/Thanh Nien