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Industry associations propose exempting suspended firms from insurance payments

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CAN THO – Eleven industry associations have sent a petition to Deputy Prime Minister Le Minh Khai and Vietnam Social Security proposing exempting laborers and suspended firms from social insurance payments due to the severe impact of the Covid-19 pandemic.

The associations also proposed allowing firms in the areas enforcing social distancing under the prime minister’s Directive 16 and enterprises applying the stay-at-work mode to delay social insurance payments for at least three months after the stay-at-home order is lifted.

As for employees working at firms applying the stay-at-work mode, it was proposed that these workers and firms enjoy a 50% reduction in social insurance payments for six months.

The associations also proposed imposing no sanctions on firms which have failed to pay social insurance on time during the lockdown as their business operations were affected by the pandemic.

Under the proposal, health insurance companies should cover the Covid-19 testing fees of firms.

The proposal was made as the industry sectors associated with export activities and labor-intensive ones have reached the threshold of financial pressure after entering the first week of September, according to the associations.

A mere 15%-20% of manufacturing facilities have been operating while applying the stay-at-work mode, leading to disruptions in the supply chains as well as a reduction in the number of customers and the market share.

Meanwhile, the payments of salaries, trade union expenditure and social insurance have led to an enormous financial burden on labor-intensive sectors.

As for the social insurance payment, firms and employees must pay 32.5% of the total salary fund.

To slow the spread of Covid-19, enterprises were forced to scale down their production or suspend operations, but still had to pay the salaries of workers and relevant fees in line with the Labor Law, piling greater pressure on firms.

The 11 industry associations also proposed the deputy prime minister chair a meeting before September 18 so that associations could present solutions and proposals for the recovery of business and manufacturing activities in a safe manner.

The 11 industry associations are the Vietnam Electronic Industries Association, the Vietnam Plastics Association, the Vietnam Leather, Footwear and Handbags Association, the Food Transparency Association, the Vietnam Tea Association, the Vietnam Association of Seafood Exporters and Producers, the HCMC Food & Food Stuff Association, the Vietnam Dairy Association, the Business Association of High-Quality Vietnamese Products, the HCMC Handicraft and Wood Industry Association and the Vietnam Pulp and Paper Association.

By Trung Chanh

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