Analyze and assess the status of state management of social insurance collection for state-invested enterprises, thereby offering solutions to complete this work. Invite you to refer to the thesis to understand the content details.
Trang 11. Rationale of the research
Foreigninvested enterprises have been developing strongly, attracting and using a huge amount of labors, contributing positively to economic growth, which is
a factor that promotes technological innovation and enhances competitive capacity, creating a pervasive effect on other economic sectors. However, the labor turnover
of the market leads to the unemployment and complex fluctuations of the economy
in general and the production and business situation of enterprises in particular, that cause to the increase of risks, such as illness and labor accidents. In addition, the average number of employees out of foreigninvested enterprises with high capital, the status of violating the law of participation and contribution to social security are common, which are shown by the rate of enterprises not registering to participate in social security or registering with incorrect number of labors or paying in based on incorrect salary paid to employees That means to protect employees, the state authority has to strengthen the role of managing social security premium collection for foreigninvested enterprises
The State plays an important role in regulating social security policies. In fact,
in recent years, state management on social security still exists some issues, for example: lacking of specific orientation for social security collecting in foreigninvested enterprises, lacking of synchronization and reality among several policies, regulations related to social security, inspection activities are not timely; the application of state management model on social security premium collection in general and social security premium collection for foreigninvested enterprises in particular have not been reviewed in a complete and scientific way, etc. From the above practical issues, the study of state management on social security premium collection for foreigninvested enterprises in Vietnam has becoming necessary. In order to seek for an effective management model of social security premium collection for foreigninvested enterprises, it is critical to have an indepth and systematic research of state management of social security to identify the current shortcomings and find out a more effective management model. That's why the author chose the topic "The management of social security premium collection for foreign invested enterprises" as the research topic.
2. Aim and Research question
Analyzing and assessing the state management of social security premium collection for foreigninvested enterprises, thereby giving solutions to improve it
Trang 2In the collecting management activities of social security agencies, the research studies three main activities: management of social security registration; declaration management and payment management of social security; supervision and monitoring and debt handling activities (excluding Health insurance, voluntary social security, unemployment insurance and fund investment growth activities)
Research room: studying State management activities on social security
4. New contributions of the research
New academic and theoretical contributions: The research has systematized and clarified the theoretical basis, analyzed the factors affecting the state management on collecting social security for foreign invested enterprises and evaluation criteria State management of social security revenues for foreign invested enterprises includes: (i) Criteria of validity, (ii) performance criteria, (iii) Appropriate criteria, (iv) Sustainable criteria
New contributions to practice: The research has evaluated the state management of social security premium collection for foreigninvested enterprises according to the criteria and according to the state management contents: (i) Issuing policies, law; (ii) Implementation of social security premium collection, (iii) Checking and inspecting activities
Trang 3CHAPTER 1: LITERATURE REVIEW AND METHODOLOGY
1.1. Overview of studies related to the research
1.1.1. Research on the principles and functions of state management of social security premium collection for foreign invested enterprises
1.1.2. Research on the content of state management on collection of social security for foreigninvested enterprises.
The content of state management on social security premium collection for foreigninvested enterprises includes 3 contents: issuing policies and laws; organizational implementation for collecting social security; inspection and checking
1.1.3. Research on the evaluation criteria of state management on social security premium collection for foreign invested enterprises
Overview research on evaluation criteria including determining criteria and evaluation methods
1.1.4 Research gaps
There is currently a "gap" in both theory and practical assessment of state management on social security premium collection for foreigninvested enterprises:
Theoretical basis of the content, state management process on social security premium collection in general, social security premium collection for foreign invested enterprises in particular;
Contents of state management on social security premium collection for foreigninvested enterprises in Vietnam;
Factors affecting state management and criteria to assess the level of state management on social security premium collection for foreign invested enterprises;
Comprehensive surveys and assessments on the state management on social security premium collection for foreign invested enterprises in Vietnam;
1.2. Research questions
In order to achieve the objectives, this research focuses on answering these research questions:
What is the difference between managing social security premium collection for foreigninvested enterprises in Vietnam compared to other countries?
Trang 4 What is the current situation of state management for social security collecting activities of foreigninvested enterprises in Vietnam today?
What criteria are used to assess the state management of social security premium collection for foreigninvested enterprises?
What is the solution to improve state management of social security premium collection for foreigninvested enterprises in Vietnam in the upcoming period? What Should/should not the government do in related to the social security collecting activities?
1.3. Research framework
The thesis applied the model of Tim Cadman in 2012, combined with the factors affecting the state management on social security premium collection for foreign invested enterprises and the basic criteria of state management quality assessment: effectiveness and performance, suitability, sustainability
Figure 1: Research framework
1.2. Methodology
1.3.a.1. Research methodology
The thesis approaches research objects based on the application of dialectical materialism method as a general methodology.
Trang 52.1.1.1. The definition of Social security.
"Social security is a guarantee to replace or compensate a part of the income
of employees when his/her income is reduced or lost due to illness, maternity, labor accidents, occupational diseases, unemployment and working age or die"
Social security is a social policy that is legalized according to the specific conditions of each country. Employees participating in social security and their families are the direct beneficiaries of social security policies, when there are insurance events that occur, resulting in reduced or lost income. It is necessary to rely on a monetary fund contributed by employees, employers and sponsors of the State in order to organize and implement social security policies
2.1.1.2. The role of social security in the economy.
The implementation of social security has a role for all parties in the social security relationship: employees, employers, and society
2.1.2 Definition of management of social security premium collection
“State management of social security premium collection is the state to issuance and implementation of legal documents, Propagating social security policies, Status of organizational management, social security premium collection process, inspection and examination of social security implementation in foreigninvested enterprises in order to adjust social security premium collection process relationships”
The state sets out a policy of social security premium collecting, influencing and regulating the collection activities of social security in order to put social security premium collection activities into the general trajectory of social security policies. The strengthening of state management for social security premium collection activities aims to create a fair and democratic mechanism and policy to ensure the legitimate rights and interests of employees when participating in social security
2.1.3 The necessity of managing social security premium collection.
2.1.3.1. Management of social security premium collection ensures benefits for employees
Trang 6Social security can be considered as a public service product to meet the basic and essential needs of employees because social security services satisfy the conditions of public services and are classified as nonpure public services. The role
of the State in the premium collection of social security for foreign invested enterprises is to ensure the provision of public services in the market whether they are provided by the State or private enterprises
2.1.3.2. Management of social security premium collection ensures balance of benefits between social security participants.
Any financial model exists the conflicts of interests need to be balanced and each model corresponds to the different ways of intervention of the State: The State directly involvement The State organizes implementation the state indirectly involvement – the State coordinates with the private sector, or establishes an independent social security implementing organization
2.1.3.3. State management of social security premium collection contributes
to timely dealing with economic changes.
Some changes in the economy, especially in the current period, raise the demand for state management on social security, including:
Movements that are difficult to control of the economy reduce social security revenues
Changes in technology increase the ability to expand participants and control social security revenues
Population aging reduces the number of employees participating in social security contributions in the future
Different points of view on the effectiveness of the implementation of social security policies of the Government
2.2 Management of social security premium collection for foreign invested enterprises
2.2.1. Overview of foreign invested enterprises
2.2.1.1. Definition of foreign invested enterprises.
The current regulation of Vietnam recognizes the activities of foreign investors in the economy in a wider range (foreigninvested economic organizations) compared to foreigninvested enterprises as well as does not regulate the percentage
of foreign investors' capital to be recognized as foreigninvested enterprises.
"Foreigninvested economic organizations are economic organizations with foreign investors being members or shareholders"
2.2.1.2. Classification of foreign invested enterprises.
Foreigninvested enterprises include: 100% foreigninvested enterprises, jointventure enterprises, cooperation contracts with different characteristics. In particular,
Trang 72.2.1.3. The roles of foreigninvested enterprises
Foreigninvested enterprises with strong development, capital capacity, technology, and management skills play a role of promoting the development of the labor market, creating competitive pressure on domestic enterprises and spreading power in the economy
2.2.2. Definition, objectives and characteristics of management of social security premium collection for foreigninvested enterprises
2.2.2.1 Definition of managing social security premium collection for foreigninvested enterprises.
"Management of social security for foreign invested enterprises is the process
of impact and administration of the state on the formation of social security fund from the contribution of foreign invested enterprises to ensure the social security funds to be formed based on the right purposes and following the regulations in the implementation of social security policies and to ensure the safety of social security finance including full collection, payment from the right objects and on time prescribed by the State ”
State management on social security premium collection is the nature of power of the State, based on the law as a key management tool, implementing three functions of the State: legislative, executive and judicial
2.2.2.2 Objectives of managing social security premium collection for foreign invested enterprises.
State management on social security premium collection for foreign invested enterprises aims at three basic objectives:
Ensure financial sustainability of social security fund;
Expanding social security coverage Expanding coverage horizontally (increasing the number of people who participates and benefits social security) and vertically (increasing quality, level of subsidies)
Ensure balance of benefits between the contributors
2.2.2.3. Characteristics of social security premium collection management for foreign invested enterprises.
In terms of management objects: Foreign investors use international capital in
the form of production capital and directly participate in management As the employer is foreigner, land, factory mostly hired. This feature leads to problems arising in ensuring social security benefits for employees when the foreigner employers flee in case of bankruptcy or dissolution
In terms of management methods: The level of corporate governance of
Trang 8by foreign invested enterprises.
In terms of labor relations in foreigninvested enterprises: Differences in culture, industrial style, behavior, etc make labor relations become stressful. Unsustainable labor relation causes employees to regularly quite their jobs, affecting participation and gaining social security benefits
In terms of the allocation of investment capital: the imbalance in attracting
foreign investment among economic sectors and localities makes the differences of characteristics of enterprise sizes, employment, wages and other social security premium collection issues from area to area. This leads to the difficulties to identify specific objectives and organize the collection of social security
2.2.3 Contents of management of social security premium collection for foreigninvested enterprises
2.2.3.1. Planning strategies, policies and laws on social security premium collection
Firstly, strategies, planning, plans, programs and projects to collect social security premium
Secondly, social security premium collection policy
Thirdly, the legal system for premium collecting social security
Regulating to the participants in social security:
Regulating the payment rate, payment basis, the process and method of social security payment.
Regulations on acts of evasion, social security debt and corresponding punishment
Regulating the functions, tasks and authority of the parties in social security relations
The above contents are specified in:
The Constitution, Laws and Codes which directly regulate or relate to social security, legal documents under laws or implementation guidelines
2.2.3.2 Organizational system of the State management on social security premium collection
Trang 9
State management agencies agencies at local level State management
Agency 1 Agency 2
…
Pension fund Labor accident fund
Local authorities
State management agencies at local level
Local authorities
Agency 1 regional level Agency 2 regional level
…
Pension fund local level Labor accident fund local level
…
Manage social security premium collection by region
Managing social insurance collection in the locality
Tax agencies Tax agenciesregional level
cấp khu vực
Tax agencieslocal level Social security agencies Social security agencies regional level Social security agencies – local level
Figure 2.1: Models of management of social security premium collection in the worldThe above figure simulates the selection of state management agencies on the design of the organizational system of the premium collection of social security with two options of classified collection management (classified according to participants
or component funds) and centralized collection management (tax agency or social security agency) Both options are classified by administrative boundaries to facilitate management: central, regional and local levels
In order to organize the management of social security premium collection for foreigninvested enterprises, the organizational system of the social security management includes: propagation, decentralization, process and professional guidance
2.2.3.4 Inspection, supervision and punishment of violations of social security premium collection.
Subjects of inspection on social security premium collection in general, for foreign invested enterprises in particular include: State inspection and specialized inspection "
2.2.4. Criteria for evaluating the management of social security premium collection for foreigninvested enterprises
Trang 10(i) Level of relevance of legal regulations on social security for foreign invested enterprises
(ii) Level of relevance of the way of organizing social security premium collection to foreign invested enterprises
(iii) Level of relevance between inspection and examination to foreign invested enterprises
(4) Sustainability criteria: including indicators
(i) Financial sustainability and stability of social security premium collecting policies for foreign invested enterprises
(ii) Participating in social security in order to ensure benefits for employees(iii) Participating in social security in order to share financial burden for foreigninvested enterprises when employees get risks
(iv) The implementation capacity of social security organizations is increasing”
2.2.5 Elements affecting the management of social security premium collection for foreign invested enterprises
2.2.5.1. Elements belonging to the management environment.
Firstly, the level of economic development
Secondly, Scientific and technological development
Third, the legal environment
Trang 11Secondly, the consciousness of law observance of foreign invested enterprises.
Thirdly, Employment, income, employees' awareness in foreign invested enterprises
2.3 International experiences in managing social security premium collection for foreign invested enterprises
2.3.1. Management of social security premium collection in Germany
2.3.2. Manage collection of social security in the US
2.3.3. Management of social security premium collection in China
2.3.4. Lessons for Vietnam on management of social security premium collection for foreign invested enterprises.
2.3.4.1. Lesson of issuing policies
2.3.4.2. Lesson of organizational management and implementation system 2.3.4.3. Lesson of inspection and supervision of implementation
Trang 12OF SOCIAL SECURITY FOR FOREIGN INVESTED ENTERPRISES IN
VIETNAM3.1 Status of premium collecting social security for foreign invested enterprises in Vietnam
3.1.1. Status of foreign invested enterprises in Vietnam
According to the forms of investment: joint venture companies and 100% foreign invested enterprises
According to investment countries: Korea, Japan
According to the structure of the investment industry: The industry structure differs according to different periods depending on the needs of the market
Local investment funds are received: FDI projects are present in all 63 provinces and cities nationwide However, areas with convenient infrastructure, abundant and skilled labor force have better results in attracting foreign investment than poor provinces
3.1.2 Results of social security premium collection of foreigninvested enterprises in Vietnam.
3.1.2.1. Results of social security participation of foreigninvested enterprises
in Vietnam.
Participants in compulsory social security include employees as well as employees In the 20142018 period, the number of organizations and laborers participating in social security in sectors has all increased. Particularly for foreigninvested enterprises, in 2007 there were 14.001 enterprises in the whole country, this number increased to 25.865 enterprises in 2018
In terms of structure, in 2018, foreigninvested enterprises participated in social security took 5,7% of the total units, however, the number of employees participating in this group counted for 30.74% On average, a foreigninvested enterprise has 172 employees participating in social security, meanwhile, the average
of nonstate enterprises only has 16 employees / units
3.1.2.2. Premium collection of social security by foreign invested enterprises
in Vietnam.
Regarding the salary used as the basis for social security payment: the basis of social security payment for employees working for FDI enterprises is the salary regime decided by the employers Basically, the salary used as a basis of the employee's social security payment for all types of employees increased In particular, the average salary of employees working for foreign invested enterprises
Trang 13is from 2014 to 2018:
Number of foreign invested enterprises and employees participating in social security
Contributing rate increased from 7% for employees, 17% for employers in
2012 to 8% and 18% respectively in 2014 onwards according to the roadmap to increase the premium rate stipulated in the Law on Social security in 2006
Evading social security payment for all employees in the enterprise
Paying in social security fund with the incorrect number of employees who
Trang 14 Breakdown the salary scales and payrolls into multiple steps, separating wages into allowances and bonuses for evading social security premiums
Secondly, social security debt: it is the act in which, the employers who had established labor relations, participated in social security for employees (employees are issued insurance books or had insurance books) but try to postpone or evade the payment
3.2 Status of management of social security premium collection for foreign invested enterprises in Vietnam
3.2.1. Status of policies and regulations on management of social security premium collection in Vietnam
(i) In terms of the form of expression: Legal documents on social security are basically structured and logical
(ii) In terms of the content: The system of professional guidance documents of the social security industry is fully promulgated and regularly revised and improved
to meet the actual requirements The contents include: documents regulating functions and tasks of state management agencies and organizing the implementation of social security; documents regulating social security premium collection activities including: participants of compulsory social security, payment rate, salary as a basis for social security, social security payment methods; adjustment documents on inspection, sanctions on violations in the field of social security, procedures, processes, records, participation forms in social security, etc
3.2.2 Status of organizational management of social security premium collection for foreign invested enterprises in Vietnam.
3.2.2.1. State management system for premium collecting social security for foreign invested enterprises in Vietnam
The Government unifies the state management of social security, directs the formulation, issuance and implementation of legal documents, regimes and policies
on social security in general The Ministry of Labor, War Invalids and Social Welfare is responsible for implementing state management on social security, the Ministry of Finance on financial management of the social security segment; People's Committees of provinces and cities directly under the Central Government implement state management of social security in their localities
3.2.2.2. The organizational system of premium collecting social security for foreigninvested enterprises in Vietnam.
Vietnam Social Security: synthesizing and allocating estimated revenue;