Question 95: Are Employers entitled to a reduction of payment rate into the insurance fund for labour accidents or occupational diseases?

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  1. Reduction of payment rate into the insurance fund for labour accidents or occupational diseases

Decree 44/2017/NĐ-CP coming into effect from 01/06/2017 stipulates the payment rate into the insurance fund for labour accidents and occupational diseases will be reduced from 1 % to 0.5% on the salary fund serving as a basis for SI payment by Employees (except for Employees as domestic workers)[1]. As such, compared with the previous Decree 37/2016/NĐ-CP dated 15/05/2016, Employers will get more benefit from fulfilling the obligation to pay insurance for labour accidents and occupational diseases for Employees.

2. Time of applying new insurance payment rate for labour accidents and occupational diseases

Article 4 of Decree 37/2016/NĐ-CP on the payment rates to the accident insurance fund and Article 34.1 thereof on the responsibility to adjust the payment rates to the insurance fund for labour accidents and occupational diseases with regard to the MOLISA will forcibly expire and be replaced by Decree 44/2017/NĐ-CP. As a result, in principle, the 1% payment to the insurance fund for labour accidents and occupational diseases under Decree 37/2016/NĐ-CP will no longer apply from the effective date of Decree 44/2017/NĐ-CP. Employers in general and enterprises using Employees in particular shall pay to the insurance fund for labour accidents and occupational diseases at the new premium rate of 0.5% in accordance with Article 3.1 of Decree 44/2017/NĐ-CP since 01/06/2017. Accordingly, as from 01/06/2017, 2018 and 2019, the payment rate will be 0.5%.

In addition, Article 3.3 of Decree 44/2017/NĐ-CP also stipulates that, based on the possibility of balancing the insurance fund for labour accidents and occupational diseases, the Government considers adjusting the payment rate to the insurance fund for labour accidents and occupational diseases as stated in Article 3.1 of Decree 44/2017/NĐ-CP as from 01/01/2020. Thus, the deadline of 01/01/2020 will be considered the time for the Government to review the balance of the insurance fund for labour accidents and occupational diseases. If necessary, the Government may adjust to the 0.5% payment rate as stipulated in Article 3.1 of Decree 44/2017/NĐ-CP in line with the actual situation of the insurance fund for labour accidents and occupational diseases at that time.


[1]Articles 4.1 and 4.2 of Decree 44/2017/NĐ-CP dated 14/04/2017