Major Changes in Social Insurance Law in 2024 (Part 1)
2025/12/30
- Ho Thi Y Nhi
Introduction
The 2024 Social Security Act was promulgated on June 29, 2024, and will be officially enforced from July 1, 2025. The amended law includes many important changes aimed at securing and enhancing workers’ substantive welfare; however, it is also expected to pose new challenges for employers in terms of compliance and organizational arrangements.
This article organizes the main changes in the 2024 Social Security Act and aims to support employers in developing internal systems compliant with the law to ensure the protection of workers’ rights.
1．Expansion of Social Insurance Coverage
The revised law has expanded the subjects eligible for social insurance coverage. Specifically, seven categories of workers were added to those required to enroll in compulsory social insurance, and two categories of workers were added to those eligible for optional social insurance. The table below summarizes three particularly noteworthy items among the former seven categories.
| Social Insurance Act of 2014 | Social Insurance Act of 2024 | Supplement |
| Working under an indefinite labor contract or a fixed-term labor contract of one month or longer. | Working under an indefinite labor contract or a fixed-term labor contract of one month or longer. (Even if the agreement or contract is made under a name different from a labor contract, it is also applicable if the person receives wages and is subject to the employer’s management, operation, and supervision.) |
In some cases, certain employers avoid the obligation to enroll in social insurance systems by not entering into labor contracts and instead concluding agreements or contracts under different names, such as joint work agreements or subcontracting contracts. Therefore, the revised law explicitly states that agreements or contracts with different names from labor contracts, but whose nature is considered to be labor contracts, are subject to social insurance. |
| No applicable subjects | Part-time workers who meet the following conditions are eligible for social insurance enrollment. ・Working part-time under a fixed-term labor contract of one month or longer, or an indefinite labor contract. ・The monthly salary is equal to or exceeds the lower limit of the social insurance premium calculation standard. |
One of the objectives of the revised law’s promulgation is to expand the coverage to include those who need social insurance and those who have the ability to pay social insurance premiums. The addition of the new eligible persons on the left aligns with this objective. |
| No applicable subjects | Corporate managers, board directors, presidents, directors, members of the audit committee, auditors, etc., who are not receiving a salary |
In accordance with this revision, after the enforcement of the amended law next year, employers will need to identify workers who are newly subject to social insurance enrollment and complete registration procedures for the applicable individuals.
2．Changes to the salary basis for social insurance premium payments
In addition to the expansion of social insurance coverage mentioned above, changes will also be made to the salary basis for social insurance premium payments.
Details are as follows.
| Social Insurance Act of 2014 | Social Insurance Act of 2024 |
| The “salary basis for social insurance premium payments” includes the following[1]. (i) Basic Salary (ii) Salary Allowances (iii) Other additional payments based on labor law provisions |
The following are included in “salary that forms the basis for social insurance premium payments”[2]. (i) Base Salary (ii) Salary Allowances (iii) Other additional payments agreed to be paid regularly and stably in each pay period |
According to the detailed guidance on the 2014 Social Insurance Act, “allowances paid considering factors such as labor conditions, job complexity, and living environment that are not included in the agreed basic salary under the labor contract,” as well as “regular additional fixed payments made in addition to the contractual salary,” must be included in the calculation of social insurance premiums.
On the other hand, “wages and allowances related to the worker’s work process and job performance results” and “irregular additional payments made periodically or irregularly, in addition to the wages under the employment contract based on the worker’s job performance results” were excluded from social insurance coverage.
Due to the complex determination conditions stipulated above, there were many cases of discrepancies in the amount of social insurance premium payments and instances of violations.
In response to this, the amended law is expected to curb violations like the ones mentioned above by clarifying and simplifying the salary standards that form the basis for social insurance premium payments.
Employers need to understand the new standard that salaries must be paid “(iii) regularly and stably in each pay period,” wait for detailed guidance from the authorities, and verify the requirements.
3．Changes in the Provisions Regarding the Receipt of Social Insurance Lump-Sum Payments
Under the 2014 Social Insurance Act, the requirements for receiving the social insurance lump-sum payment were very straightforward. Prior to 2014, a worker who met all of the following conditions could receive 1.5 months’ worth of the average monthly salary used as the basis for calculating social insurance premiums for each year of enrollment in social insurance. From 2014 onwards, workers were eligible to receive 2 months’ worth of that average salary for each year of enrollment.
・If the pensionable age has not been reached
・If the required number of years of insurance enrollment for pension receipt has not been met
・If no work was done and no enrollment in social insurance occurred during the year
Because there is a long period between retirement and receiving pension benefits, in reality, many workers often wait to receive a lump-sum payment to cover their living expenses for the time being.
This situation not only highlights inadequacies in Vietnam’s social security policies but also causes numerous problems for companies in managing and utilizing their workers.
In fact, many workers constantly consider sudden resignation as an option solely for the purpose of receiving a lump-sum social insurance payment from the social insurance fund.
For these reasons, the Social Insurance Act was amended in 2024 with the purpose of suppressing the aforementioned deficiencies.
Under the amended law, workers who were enrolled in social insurance before July 1, 2025, and who do not enroll in compulsory or voluntary social insurance within 12 months after withdrawing from insurance, and whose social insurance contribution period is less than 20 years, are allowed to receive a social insurance lump-sum payment.
[3]. On the other hand, for workers who join mandatory social insurance after the enforcement date of the 2024 Social Insurance Act (July 1, 2025), the application of the receipt of a lump-sum social insurance payment under the above conditions is not permitted.
With the amendment, it is expected that the risk of employees leaving related to the receipt of the lump-sum payment will be reduced for employers, leading to more stable human resources.
Conclusion
This time, we introduced the notable points of the 2024 Social Insurance Act amendments.
Along with these revisions, there is a high possibility that employers will face not only positive impacts but also challenges.
Therefore, it is necessary to adjust internal policies in compliance with the changing laws and regulations and improve the quality of personnel management.
By actively engaging in these initiatives, it is expected to maximize the benefits of the above legal and regulatory reforms and contribute to the stability and long-term development of Vietnam’s industry.
[1] Article 89 of the 2014 Social Insurance Law
[2] Article 31, Paragraph 1, Item b of the 2024 Social Insurance Law
[3] Article 70, Paragraph 1, Item dd of the 2024 Social Insurance Law
This article was translated using Yarakuzen.
