If a company owes social insurance money if it goes bankrupt, will the rights of employees be guaranteed?

If the company goes bankrupt, when carrying out procedures for dividing the Company’s assets, the following order of processing will be prescribed as prescribed in Article 54 of the 2014 Bankruptcy Law as follows:

Order of asset division

1. In case the Judge issues a decision to declare bankruptcy, the assets of the enterprise or cooperative are divided in the following order:

a) Bankruptcy costs;

b) Salary debt, severance pay, social insurance, health insurance for employees, other benefits according to the labor contract and signed collective labor agreement conclusion;

c) Debts arising after opening bankruptcy procedures for the purpose of restoring business activities of enterprises and cooperatives;

d) Financial obligations to the State; Unsecured debt must be paid to creditors in the creditor list; The secured debt has not been paid because the value of the secured assets is not enough to pay the debt.

That is, after deducting bankruptcy costs (including costs of the administrator, management business, asset liquidation, audit costs, newspaper publication costs and other costs as prescribed by law), the next part that will be paid is the salary debt, severance pay, social insurance, and health insurance for employees.

But the rights of workers at this time still depend heavily on the Company’s assets. If the company’s assets are enough to pay this amount, then the workers’ rights will be guaranteed.

Therefore, in this case, right at this time, the employee collective needs to report to the social insurance agency, the Labor Union or the local Department of Labor, War Invalids and Social Affairs to intervene and support them to pay full insurance and ensure their rights.

How long can businesses owe social insurance money?

According to Article 7, Procedures for collecting social insurance, health insurance, unemployment insurance, insurance for labor accidents and occupational diseases; issuance of social insurance books and health insurance cards issued with Decision 595/QD-BHXH of 2017, amended by Clause 13, Article 1 of Decision 505/QD-BHXH of 2020, if choosing the monthly payment method, the employer must pay mandatory social insurance by the last day of the month at the latest.

In case you choose to pay 03 months or 06 months, the enterprise must pay social insurance no later than the last day of that payment method.

If the enterprise is late in paying social insurance compared to the above deadline, the enterprise will violate one of the prohibitions in Article 17 of the Law on Social Insurance 2014. At that time, the enterprise will be handled according to Clause 3, Article 122 of the Social Insurance Law 2014 as follows:

Handling violations of social insurance laws

3. Employers who violate the provisions of Clauses 1, 2 and 3, Article 17 of this Law for 30 days or more, in addition to having to pay the full amount of unpaid or late payment and be handled according to the provisions of law, must also pay an interest equal to 02 times the average social insurance fund investment interest rate of the immediately preceding year calculated on the amount and time of late payment; If not done, at the request of the competent person, bank, other credit institution, the state treasury is responsible for deducting from the employer’s deposit account to pay the unpaid amount, late payment and interest on this amount to the account of the social insurance agency.

Accordingly, businesses are allowed to owe social insurance for less than 30 days. If you are late paying social insurance for 30 days or more, you will have to pay the full unpaid amount and pay additional interest to the Social Insurance Fund, and may also be handled according to relevant laws.

 What acts are strictly prohibited in the field of social insurance?

Prohibited acts in the field of social insurance are specified in Article 17 of the 2014 Law on Social Insurance including:

 Evasion of paying compulsory social insurance and unemployment insurance.

Late payment of social insurance and unemployment insurance.

Misappropriating money to pay social insurance and unemployment insurance.

Fraud and falsification of records in the implementation of social insurance and unemployment insurance.

Illegal use of social insurance fund and unemployment insurance fund.

Obstructing, causing difficulties or damaging the legal and legitimate rights and interests of employees and employers.

Illegally accessing and exploiting social insurance and unemployment insurance databases.

False reporting; providing inaccurate information and data about social insurance and unemployment insurance.