According to the Da Nang Social Insurance Department, over 1,000 of the city’s businesses owe over 112 billion VND in total for social insurance premiums.  This means that thousands of employees cannot enjoy the many benefits such as retirement, sickness and maternity allowances.

In particular, the Da Nang Automobile Mechanical and Electrical Equipment Company (DAMECO) owes a total of 2.6 billion VND from the past nearly 2 years, whilst the Song Da Someco Company owes 4.9 billion VND.

Over recent years, the city has seen a significant increase in the number of debtors.  It appears that businesses intentionally delay paying their social insurance premiums because any administrative fines imposed are much lower than their bank loan interest rates.  They claim that global economic difficulties are a factor.

Workers at a company in the Hoa Khanh Industrial Park on strike about unfair labour policies

However, the main concern of the city authorities is that the tricks for evading social insurance payments are becoming more and more sophisticated.  For example, some local companies only sign 3-month labour contracts with their employees to avoid their responsibilities.  They might also move their work places to different locations in order to avoid inspections by the local relevant agencies.  In addition, local businesses often report a lower number of employees than the reality in order to pay as few social insurance premiums as possible.

In an attempt to deal with the problem, top priority has been given to suing local debtors in court.  So far this year, the city’s Social Insurance Department has sued 74 local businesses for a total of up to 19 billion VND in social insurance debts.  As a result, 45 have paid their debts.

The department has also urged local employees to take all necessary actions to protect their legal labour rights.  In particular, employees should ask their companies to complete the necessary procedures for their social insurance registration, as well as regularly check their social insurance books.