Social Insurance Advisory According to Vietnam's Law 2024

Key Takeaways

• Vietnam’s Social Insurance Law 2024 reduces retirement benefit eligibility from 20 years to 15 years of contributions, creating powerful incentives for talent retention and strengthening employee loyalty to enterprises.
• The expansion of mandatory social insurance coverage and tightened regulations on lump-sum withdrawals require businesses to comprehensively review their budgets and HR policies.
• The new multi-tiered retirement system opens opportunities for enterprises to build competitive benefit packages through supplementary retirement insurance.
• Changes in digitalization processes and collection management will reduce administrative burden while requiring stricter compliance to avoid legal risks.
• Businesses need to act immediately on three priorities: budget review, transparent internal communication, and enhanced compliance risk management.

With 11 chapters and 141 articles (an increase of 2 chapters and 16 articles compared to the current law), this latest social insurance legislation brings both challenges and opportunities for enterprises. These changes directly impact budgets, internal processes, and employees’ financial planning. This article analyzes two core aspects: first, the most significant changes in the new law, and second, the strategic actions enterprises must implement immediately to ensure compliance, optimize costs, and enhance competitive advantage through comprehensive social insurance advisory services.

7 core changes in Social Insurance Law 2024 businesses need to know

These seven pivotal adjustments not only transform social insurance operations but also reshape HR strategies and budget planning for enterprises in the coming decade.

Reduced retirement benefit eligibility to 15 years

According to Article 64 of the new law, employees who reach retirement age and have contributed to mandatory social insurance for at least 15 years will be eligible for monthly retirement benefits, reduced from the current 20-year requirement. This represents the most significant impact on HR strategy.

This change means many employees will have stronger motivation to commit long-term to enterprises. The easier eligibility conditions will increase the proportion of workers choosing to preserve their social insurance rather than withdrawing lump sums when leaving jobs. Enterprises need to leverage this to build a culture of engagement and long-term talent retention strategies.

The law also supplements calculation methods for retirement benefit levels for those with 15-20 years of participation, ensuring fair benefits for all employees.

Expanded mandatory social insurance coverage

The 2024 law adds 5 new groups subject to mandatory social insurance participation:

• Individual business household owners
• Full-time militia members
• Non-professional workers at commune, village, and neighborhood levels
• Spouses of officials on overseas assignments not receiving state budget salaries
• Enterprise managers and cooperative management positions without salaries

This expansion not only increases costs but also requires enterprises to establish new management processes for these specific groups. Particularly, enterprises with unsalaried managers need to prepare additional budgets for social insurance contributions for these positions, while understanding social insurance benefits to effectively advise employees.

Addition of multi-tiered retirement system

The law officially establishes a more robust social security system with two new pillars. Social retirement allowances guaranteed by the state budget for those aged 75 and above (or 70 for poor/near-poor households) without retirement benefits, reduced from the current 80-year threshold.

Supplementary retirement insurance allows enterprises and employees to contribute additionally for higher retirement benefits. This creates a new tool for building competitive benefit packages and attracting high-quality talent.

The system also adds monthly allowances for those who reach retirement age but don’t qualify for retirement benefits and aren’t yet eligible for social retirement allowances, creating a comprehensive safety net. This opens opportunities for enterprises to build employee benefit policies that are competitive and attract top talent.

Tightened lump-sum social insurance withdrawal regulations

Employees beginning social insurance participation from July 1, 2025, will only be eligible for lump-sum withdrawals in strictly defined cases: reaching retirement age without 15 years of contributions, emigrating abroad, suffering from serious illnesses, or having work capacity reduced by 81% or more.

This means lump-sum social insurance withdrawals will no longer be a common choice as before, forcing employees to carefully consider long-term benefits. Enterprises need to adjust their communication strategies and advise employees about the benefits of preserving social insurance.

Addition of new maternity and sickness benefits

Welfare benefits have been significantly expanded. Voluntary social insurance participants receive maternity allowances of 2 million VND per child guaranteed by the state budget, without additional contributions. Male employees receive increased paternity leave from 5-14 days depending on specific circumstances.

Non-professional workers at commune and village levels receive additional sickness and maternity benefits instead of only retirement and survivor benefits as before. Female employees undergoing infertility treatment also receive maternity benefits if they have contributed to social insurance for at least 6 months within 24 consecutive months.

Replacement of “base salary” with “reference level”

The reference level will be flexibly adjusted based on consumer price index, economic growth, and state budget capacity, rather than being fixed like the base salary. When the base salary hasn’t been abolished, the reference level equals the current base salary.

When the base salary is abolished, the reference level will not be lower than the final base salary, ensuring employee benefits are not reduced. This is an important technical change affecting how enterprises forecast and manage long-term welfare costs.

Strengthened collection management and simplified procedures

The law dedicates a separate chapter to social insurance collection and contribution management with strict enforcement measures. Late payment and evasion will be penalized at 0.03% per day on overdue amounts and may lead to criminal prosecution.

Simultaneously, the law adds electronic transaction regulations, reducing and simplifying documentation procedures. This helps enterprises save time and operational costs while requiring investment in systems and staff training to effectively utilize digital conveniences.

What actions do businesses need to prepare for the change?

The period from now until July 2025 is a golden window for enterprises to transition from passive compliance to proactively leveraging opportunities from the new law.

Budget review and internal policy adjustments

Enterprises need comprehensive assessment of budget impacts from expanded participation coverage and new benefit schemes. Particularly important is identifying additional costs for new groups like unsalaried managers and individual business households.

Social insurance procedures need complete redesign from start to finish: from registering social insurance for new employees, monitoring contribution and benefit processes, to handling procedures when employees leave. Establishing automated monitoring systems will help enterprises avoid risks of late payments and evasion with strict penalties under the new law.

Enterprises should also consider leveraging types of employee benefits and investing in supplementary retirement insurance as tools for building competitive benefit packages, especially for key personnel positions.

Building transparent communication plans for employees

Communication strategies need to be designed for different target groups. For current employees, the focus is clearly explaining changes in retirement, maternity, and sickness benefits and the advantages of preserving social insurance through accurate social insurance updates.

For new hires after July 1, 2025, enterprises need to emphasize the mandatory employee benefits and the inability to withdraw lump-sum social insurance and guide them in long-term financial planning. Understanding will help enterprises communicate accurate information.

Transparent and proactive communication not only demonstrates enterprise care but also helps build trust and strengthen engagement during the transition period.

Enhanced risk management and compliance assurance

With penalties of 0.03% per day and potential criminal prosecution, accurate compliance is no longer optional. Enterprises need to establish strict control processes with regular checkpoints and early warning systems. Understanding why compliance services are essential will help enterprises properly assess risk levels.

Professional social insurance law advisory becomes more critical than ever. Specific steps to implement:

1. System investment: Upgrade HR management software to integrate automatic social insurance monitoring features
2. Staff training: Organize specialized courses for HR and accounting departments on new regulations
3. Checklist development: Establish monthly review lists to ensure no social insurance contributions are missed
4. Backup setup: Prepare contingency plans for personnel changes or system failures

Simultaneously, enterprises should utilize professional administrative procedures and compliance services to minimize risks and optimize processes.

Vietnam’s amended Social Insurance Law 2024 is not a future story but a strategic requirement that needs preparation starting today. Delays will expose enterprises to legal risks, budget instability, and loss of employee trust. Leaders need to direct their teams to act decisively to transform compliance challenges into advantages for attracting and retaining talent.

To ensure complete compliance and process optimization, enterprises should consider using professional payroll services that fully integrate new law requirements. Social insurance advisory services from experts will help enterprises stay on track, saving time and costs long-term. Talentnet is ready to partner with enterprises through social insurance law advisory programs and specialized sharing, designed specifically to help you and your team confidently enter the new phase.