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1 INTRODUCTION Rationale of the research Foreign-invested 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 foreign-invested 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 foreign-invested 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 foreign-invested 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 foreign-invested enterprises in Vietnam has becoming necessary In order to seek for an effective management model of social security premium collection for foreign-invested enterprises, it is critical to have an in-depth 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 Aim and Research question Analyzing and assessing the state management of social security premium collection for foreign-invested enterprises, thereby giving solutions to improve it Research subjects and research scope 3.1 Research subjects a The project focuses on state management on social security premium collection for foreign-invested enterprises 3.2 Research scope - Research content: The research focuses on the state management of social security premium collection for foreign-invested enterprises, including three major groups of contents: policy making, organizational structure and decentralization of management and supervision and treatment of violation In the content of policy making and inspection, supervision, the object of research is the state management of the Ministry of Labor, War Invalids, & Social Welfare In 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 premium collection for foreign-invested enterprises in Vietnam - Duration of research: The thesis conducts primary data from July 2016 to April 2018 to study the state management of state budget revenue on social security of foreign-invested enterprises; secondary data from 2014-2018; proposes solutions to enhance the state management on social security premium collection for foreigninvested enterprises by 2020, with a vision of 2025 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 foreign-invested 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 New contributions for solutions: The research has proposed solutions to improve the state management of social security premium collection for foreign invested enterprises CHAPTER 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 foreign-invested enterprises The content of state management on social security premium collection for foreign-invested enterprises includes 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 foreign-invested 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 foreign-invested 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 foreign-invested enterprises in Vietnam compared to other countries? What is the difference between managing social security premium collection for foreign-invested enterprises compared to domestic enterprises? - What is the current situation of state management for social security collecting activities of foreign-invested enterprises in Vietnam today? - What criteria are used to assess the state management of social security premium collection for foreign-invested enterprises? - What is the solution to improve state management of social security premium collection for foreign-invested enterprises in Vietnam in the upcoming period? What Should/should not the government 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 1.3.1 Research methodology The thesis approaches research objects based on the application of dialectical materialism method as a general methodology 1.3.2 Specific methodologies 1.3.2.1 Qualitative method 1.3.2.2 Quantitative methods CHAPTER 2: THEORETICAL AND PRACTICAL BASIS ON MANAGEMENT OF SOCIAL SECURITY PREMIUM COLLECTION FOR FOREIGN-INVESTED ENTERPRISES 2.1 Theoretical basis for management of social security premium collection 2.1.1 The definition and role of social security in the economy 2.1.1.1 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 Social 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 non-pure 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 (foreign-invested economic organizations) compared to foreign-invested enterprises as well as does not regulate the percentage of foreign investors' capital to be recognized as foreign-invested enterprises "Foreign-invested economic organizations are economic organizations with foreign investors being members or shareholders" 2.2.1.2 Classification of foreign invested enterprises Foreign-invested enterprises include: 100% foreign-invested enterprises, joint-venture enterprises, cooperation contracts with different characteristics In particular, the form of cooperation contract does not establish a new legal entity, so foreign-invested enterprises include: 100% foreign-invested enterprises and jointventure enterprises 2.2.1.3 The roles of foreign-invested enterprises Foreign-invested 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 foreign-invested enterprises 2.2.2.1 Definition of managing social security premium collection for foreign-invested 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 foreign-invested enterprises is often very good, the risk prevention and risks are thoroughly calculated and social responsibilities are often perceived and complied by foreign invested enterprises In terms of labor relations in foreign-invested 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 foreign-invested 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 Figure 2.1: Models of management of social security premium collection in the world The 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 foreign-invested 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 foreign-invested enterprises (1) Criteria of validity: State management validity is a social concept which indicates the level of law to be complied with and the degree of realization of the command and obedience power in the relationship between the management subject and the management object in certain historical conditions.” State management validity is considered on two aspects: - Level of realization of state power: - The level of law observance, comply with all directives from the management agencies on the premium collection of social security (2) Performance criteria: the effectiveness of state management on social security is measured through indicators: (i) The level of increase in social security revenues of foreign invested enterprises (ii) The level of minimizing social security payment time (iii) Level of cost savings (3) Fair and appropriate criteria The relevance of the content is assessed through: (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 10 (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 foreign-invested 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 2.2.5.2 Elements belonging to the subject of management Firstly, the State's view on social security Secondly, Capacity of social security premium collectors Thirdly, the facilities of the social security organizations 2.2.5.3 Elements belonging to the object of management Firstly, the organizational and managerial capacity and resources of foreigninvested enterprises Secondly, 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 11 CHAPTER 3: STATUS OF MANAGEMENT OF PREMIUM COLLECTION OF SOCIAL SECURITY FOR FOREIGN INVESTED ENTERPRISES IN VIETNAM 3.1 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 foreign-invested enterprises in Vietnam 3.1.2.1 Results of social security participation of foreign-invested enterprises in Vietnam Participants in compulsory social security include employees as well as employees In the 2014-2018 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, foreign-invested 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 foreign-invested enterprise has 172 employees participating in social security, meanwhile, the average of non-state 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 is the highest (5.8 million VND / person / month in 2018) position and has the most stable growth rate among all sectors 12 Regarding collection results: Table 3.5: Situation of social security premium collection in the period of 2014-2018 (unit: Billion VND) Sectors 2014 2015 2016 2017 2018 Administrative career, 47,943 50,847 53,313 56,019 Parties, Unions, Armed 46.759 Forces 13.113 13,603 15,949 17,680 18,021 State enterprises Foreign-invested 36.910 43,397 56,738 65,026 74,126 enterprises 29.936 36,575 46,369 54,020 65,822 Private enterprises 4.273 4,083 4,587 5,160 6,458 Others 147,549 174,490 195,199 220,446 Total 130.991 In the 2014-2018 period, the number of social security revenues in all sectors tends to increase Foreign invested enterprises have a growth rate of 151.8%, higher than the average growth rate of all sectors In 2018, the revenue of foreign invested enterprises is VND 74.126 billion, accounting for 46,92% of the total revenue of enterprises and accounting for 33,6% of the total revenue of all sectors The reason is 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 - The basis salary and the regional minimum wage increases as prescribed 3.1.2.3 The situation of evading and postponing social security payment of foreign-invested enterprises First of all, evading social security payment This is the behavior of the employer who not initiate social security relations with the insurance organization, not carry out the procedures to participate in the insurance for employees right from the establishment of the labor relations The acts of evasion: - Evading social security payment for all employees in the enterprise - Paying in social security fund with the incorrect number of employees who work for enterprises - 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 13 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 foreign-invested enterprises in Vietnam Vietnam Social Security: synthesizing and allocating estimated revenue; managing premium collection nationwide, performing the function of specialized inspection on social security1 Social security departments at provincial and city level are directly under the management of social security premium collection in the province: Estimating social According to Decree 21/2016 / ND-CP dated March 31, 2016 regulating the implementation of specialized inspection functions on social security, health insurance and voluntary social security of social security agencies (effected from June 1, 2016) 14 security premium collection to send to Vietnam Social Security; allocating revenue plans and directly controlling and managing the premium collection of social security at district level; directly collecting social security premium of units which have not yet been assigned to district level; performing the function of specialized inspection on social security payment in the province District social security departments: managing and organizing the collection of social security for the objects in the district, which decentralized by the provincial social security; making annual plans to send provincial social security The specialized inspection function on social security has not been decentralized to the district level Depending on the number and size of foreign-invested enterprises in each locality, the division of social security agencies is different In addition, assigning specialized staff to manage the social security in foreign invested enterprises is very flexible Laws and Vietnam Social Security not set a general way in the whole system but allow local social security agencies to take the initiative in assigning the management Although only 3.1% of social security agencies assign specific officers to manage social security of foreign-invested enterprises, each of them is controlled by one of the particular social security officers 3.2.2.3 Propagating social security policies and laws for foreign-invested enterprises Figure 3.9: The level of understanding of the employees on social security premium collection policy Employees learn about social security through various information channels, of which the most popular channel is communications of social security agencies with 25% of choices, 16% via employers, and 22% by employees themselves; 14% by labor unions; 12% from other channels such as leaflets, professional training 15 courses; and 11% of employees did not learn information through any channel 3.2.2.4 Guidance on the process of organizing social security premium collection for foreign-invested enterprises in Vietnam Step 1: Prepare and assign the social security premium collection plan for foreign invested enterprises Step 2: Implement social security premium collection for foreign invested enterprises - Receive list and declaration of social security participation of foreigninvested enterprises - Checking, comparing and managing social security books - Checking, comparing and confirming the social security receipts Step 3: Report and evaluate the results of social security premium collection In all of the steps in the process, IT applications are increasingly expanded 3.2.2.5 Process of organizing the premium collection of social security debt for foreign-invested enterprises in Vietnam Social security classifies the types of debts based on the criteria of debt period, collection methods, responsibility of debt collection teams in the local social security, however there is still no agreement on how to punish enterprises which did not register for social security payment: (i) some localities to conduct collection arrears, (ii) some localities to use the arrear reason to make it difficult for enterprises; (iii) some localities take the date of register to count the social security payment; (iv) some localities have an "agreement" with enterprises to collect arrears a certain period of time in the total amount 3.2.3 Current status of inspection and examination of social security premium collection activities for foreign-invested enterprises in Vietnam 3.2.3.1 Specialized inspection on social security payment for foreign-invested enterprises in Vietnam The function of social security inspection is carried out by: Specialized inspectors of the Ministry of Labor, War Invalids and Social Welfare, Financial Inspectors of social security department of the Ministry of Finance 16 Table 3.4: Inspection of social security implementation by the Ministry of Labor, Invalids and Social Welfare for the period 2015-2018 Criteria 2014 2015 2016 2017 2018 Number of inspected units 239 438 376 580 570 Number of sanctioned units 13 11 36 71 100 Amount (million VND) 562 762 1.560 5.139 8068 Number of penalty units 10 26 35 38 Penalty rate (%) 62% 91% 72% 50% 38% (Source: Ministry of Labor, War Invalids and Social Welfare) The inspection force, low number of sanctioning units, low penalty execution rates are outstanding issues of the social security inspectorate of the state management agency 3.2.3.2 Specialized inspection of social security contribution of Vietnam Social Security In the process of determining the subject of inspection, the social security agency has focused mainly on the two groups with the highest debt in all the sectors being foreign invested enterprises and non-state enterprises 3.2.3.3 State Inspectorate on the implementation of social security of foreign invested enterprises Inspector of Government and People's Committees at all levels are inspectors of the State, who will conduct social security inspections at the request of management levels In 2014, under the direction of Political Bureau of the Party Central Committee, the Government Inspectors inspected the observance of the law on social security at 68 enterprises, including foreign-invested enterprises in 12 provinces and cities The results showed that all foreign-invested enterprises had late payment with a delay of months to 67 months (26 months on average) 3.2.4 Evaluate the management of premium collection of social security for foreign-invested enterprises in Vietnam based on a set of criteria 3.2.4.1 Effectiveness (1) Level of realization of state power (a) Level of strategic planning and plans of social security premium collection The level of participation and information acceptance on strategies, zoning and plans for premium collecting social security of enterprises is limited According to the author's survey, only 37.7% of foreign-invested enterprises have ever contributed in the social security premium collecting plan, 47.2% of them are fully informed about social security premium collecting plans (b) The level of promulgation of law Evaluation of foreign-invested enterprises on the issue of legal documents; 80.9% of enterprises rated documents fairly completed and; 45.9% of enterprises 17 stated that the documents were not detailed [Appendix 9] More specifically, around 85% of FDI enterprises believe that laws and decrees are unclear2, and have not adjusted problems (c) The level of government regulation (c1) The level of regulation of the state management agency at the central level (c2) The level of regulation of local state management agencies: (c3) Roles of boards of management in industrial zone and economic zone (d) Inspection and examination of social security premium collection (2) The level of law compliance However, the process of organizing and implementation had some errors from the parties in social security, including: (a) The implementing agency (b) Foreign-invested enterprises (c) Employees in foreign invested enterprises 3.2.4.2 Performance (1) The level of increase in social security revenues of foreign invested enterprises Figure 3.12: Level of increase of social security revenues (2) Level of minimizing the time of social security premium collection In 2015, administrative procedures were cut from 115 procedures to 33 Survey of VCCI for the implementation of social security of foreign-invested enterprises in November 2016 18 procedures The requirements on documents (including forms, declarations, applications, proposal dispatch) decreased by 56%, the form decreased by 82%, the process and operation also decreased by 78% In 2016, Vietnam Social Security has reduced 01 administrative procedure (from 33 procedures to 32 procedures); reduced by 38% in application components; 42% in criteria on declarations and forms; 54% reduction in process and operation On the business side, 81.8% of enterprises confirm that the transaction time in social security payment is increasingly shortened; 64.6% of enterprises considered that the payment procedure is convenient In detail, 91.1% of enterprises stated that the procedures and forms of premium collecting social security are publicly listed, but incomplete and unclear (52.7% of enterprises); 45.4% rated the forms of social security declaration complicated (3) Level of cost savings 3.2.4.3 Fairness - suitability (1) Level of suitability of legal regulations on social security for foreign invested enterprises (2) Level of suitability of method used for social security premium collection with foreign invested enterprises (3) Level of suitability of inspection and examination activities for foreign invested enterprises 3.2.4.4 Sustainability criteria (1) Financial sustainability and stability of social security premium collection policies for foreign invested enterprises (2) Participating in social security to contribute to ensuring benefits for employees (3) Participation in social security contributes to share financial burden for foreign invested enterprises when employees face risks (4) The organization capacity to implement is increasing 3.3 Successful remarks, limitations in managing the premium collection of social security for foreign-invested enterprises and causes 3.3.1 Success Firstly, regarding policy making, law collecting social security for foreign invested enterprises: - The socio-economic development strategy and sectored strategy are fully developed - Policies and laws on social security are issued based on scientific bases, statistical data forecasts about demographic fluctuations and balance of the fund - Legal documents on social security premium collection for foreign-invested 19 enterprises have ensured the consistency between the regulations on social security premium collection for foreign-invested enterprises with other types of enterprises - The process of implementing social security policies and laws are monitored and evaluated by Vietnam Social Security Secondly, organize the premium collection of social security for foreigninvested enterprises: - Organize the system of social security under a vertical, centralized and unified system from the central to local levels that is suitable for the nature of the work - The issue of simplifying procedures under the authority of Vietnam Social Security is drastically implemented and achieved good results - The whole process obtained IT applications towards integrated, centralized and modern systems Thirdly, related to inspection and checking - Vietnam Social Security is assigned an inspection function that has been effective in managing and adjusting the results of social security premium collection - Local social security agencies highly appreciate the work of citizen reception and dialogue with citizens to solve problems in time 3.3.2 Existing limitations Firstly, regarding policies and laws about premium collect social security for foreign-invested enterprises: - Some regulations are incomplete, unclear, and inconsistent, some practical issues of foreign-invested enterprises such as the situation of employers who are fleeing foreigners have not been instructed - The document guiding the implementation of the Law is not timely, causing difficulties in organizing implementation for businesses Secondly, organize the collection of social security for foreign-invested enterprises: - Lack of unified management and coordination at macro level - The process and organization of implementation are not consistent - The process of social security premium collection through employers creates problems affecting employees' benefits - Responsibility of explanation of status of social security premium collection and payment and information of the employee's contribution has not been fully implemented Thirdly, about inspection and checking - Inspection and supervision activities are also strongly influenced in solving 20 cases, there is no mechanism to solve systematic problems." - The rate of debt recovery through inspection is still low 3.3.3 Reasons One is the reason from the social security agency - Capacity of staff collecting social security premium - Lack of coordination with relevant agencies: local labor management agencies, People's Committees, People's Councils at all levels, Labor unions - Social security fund investment is not effective - Vietnam Social Security does not have a unified database which can be connected, shared Secondly, the causes of foreign invested enterprises Figure 3.12: Causes of hiding social security Survey results show that 80.9% of businesses believe that they will comply if other businesses also comply When an enterprise violates and is not punished, or be punished with light sanctions; other enterprises tend to follow In addition, 10.9% of employees also admit the views of enterprises, even agreeing with enterprises to not pay or pay with lower levels to receive immediate benefits instead of long-term protection Besides businesses that are able to contribute but intentionally not to pay, 25.9% of businesses are affected by economic conditions in general and business operations are facing difficulties, some enterprises dissolve and stop working dynamic, especially enterprises where foreigners are fleeing away of Vietnam Third, the cause of the employees Figure 3.13: Causes of employees not complying with social security 21 The most important reason affecting employees' intention to participate in social security is that the employee wants to receive higher subsidies in the present, instead of the future benefits of social security (selected by 27.9% of employees) which is actually the synthesizing result of knowledge, salary, unattractive policies Fourth, other causes CHAPTER 4: SOLUTIONS TO COMPLETE THE MANAGEMENT OF PREMIUM COLLECTION OF SOCIAL SECURITY FOR FOREIGNINVESTED ENTERPRISES IN VIETNAM 4.1 Viewpoints, orientations of completing the state management of social security premium collection for foreign-invested enterprises by 2020, with a vision to 2025 4.1.1 State management perspectives on premium collection of social security for foreign invested enterprises 4.1.2 State management orientations on premium collection of social security for foreign invested enterprises 4.2 Proposing to improve management of social security premium collection for foreign invested enterprises 4.2.1 Group of solutions on system of policies and laws on social security premium collection for foreign invested enterprises 4.2.1.1 Promulgating planned and targeted laws 4.2.1.2 Adjust and supplement some legal contents on social security premium collection for foreign-invested enterprises Firstly, with a group of documents regulating state management functions and tasks on social security premium collection Secondly, the group of documents regulating social security premium collection activities Thirdly, adjust some of regulations to be appropriate with practical requirements 4.2.2 Group of solutions on organizational system 22 4.2.2.1 Integrating the system of premium collecting social security and collecting taxes Combine or through tax authorities to manage based on the customer-oriented mechanism The integrated acquisition system provides a unique access to both tax and social security issues Service center provides timely and accurate information; increase the use of electronic services (e-mail, chat, ) 4.2.2.2 Building up a management system for collecting social security with a centralized data processing center model All information about employees and the process of participation and contributions include: name, date of birth, social security book number, participation status, number of accumulated years and detailed payment amounts; information on policy beneficiaries of employees and their relatives include: entitlements, benefits, conditions, limits on the duration of benefits of employees and their relatives; information on the status of declaration, deduction and payment of social security of labor force units is kept concentratedly in the central data center of Vietnam Social Security 4.2.3 Group of solutions on organizing the management of social security premium collection for foreign-invested enterprises It is the group of solutions selected by the Social Security agencies as the most necessary group of solutions to enhance social security compliance [Appendix 10] 4.2.3.1 Propagating and disseminating policies and laws on social security premium collection to foreign-invested enterprises Propagating Social security according to a methodical communication campaign aimed at different audiences: Foreign-invested enterprises, employees, related agencies 4.2.3.2 Reform process, procedures for collecting social security premium for foreign invested enterprises Firstly, continuing administrative reformation, IT application in implementing organizations Appropriate software should enhance the overall efficiency of collecting social security, by supporting data management and professionalizing the payment process Electronic records allow cross-checking and therefore will improve operational management efficiency To speed up the progress of IT application in managing social security: compulsory implementation for all communications, exchange, record keeping, fee payment, between the government and the people who are in charge Secondly, collecting social security premium directly from employees instead of collecting through foreign invested enterprises at this time 23 Diagram 4.1: Proposed social security premium collection process Thirdly, the social security agencies establish a set of criteria for evaluating employees, enterprises participating in social security according to the compliance level 4.2.3.3 Management of social security debts and evaded payment Step 1: Identify, classify and prioritize debts Step 2: Provide debt repayment method Step 3: Manage debts 4.2.3.4 Enhance the effectiveness of coordinating agencies and organizations which relate to social security premium collection activities Enhancing the effectiveness of coordination of related agencies and organizations including: General Statistics Office; Ministry and Department of Planning and Investment; Courts; trade unions; bank, state management agencies on local labors 4.2.4 Group of solutions on inspection and examination of social security implementation in foreign-invested enterprises Firstly, need to change the perception of inspection and examination activities Secondly, well perform the specialized inspection function on social security contribution of Vietnam Social Security Thirdly, controlling foreign invested enterprises fleeing: Fourth, strengthen the role and power of social security inspectors Fifthly, strengthen the monitoring activities on social security premium collection for foreign invested enterprises 4.2.5 Some other solutions - The system of employment, labor and wage policies must be reformed synchronously - Change the way of assigning revenue targets 24 - Implement social security development targets for local authorities and industrial parks and economic zones - Research to change the approach to social security model towards the minimum of social security, design multi-level system - Enhance the effectiveness of social security fund investment to increase revenue for the fund, reduce pressure on contributions to employees and employers - Transparent information management - Strengthening the capacity of genuine representation of employees CONCLUSION Social security as a pillar of the social security system is one of the policies that contribute significantly to promoting the socio-economic development of the country Social security is implemented on the principle of contribution and benefits, social security fund is formed mainly from the contributions of employees and employers State management of social security premium collection for foreign-invested enterprises affects the premium collection of social security, making the premium collection of social security of foreign-invested enterprises take place properly, sufficiently and promptly, ensuring the maintenance and growth of funds The thesis has systematized the basic theoretical issues of social security premium collection and state management on social security premium collection On that basis, the thesis analyzes and assesses the situation; points out the achievements and limitations in the premium collection of social security and state management on social security premium collection for foreign invested enterprises The evaluation based on a set of criteria and the state management content is the basis for the author to give some key solutions to enhance the state management of social security premium collection for foreigninvested enterprises in the upcoming time The thesis also gives some recommendations to the State, and relevant Ministries and social security agencies to create favorable mechanisms, policies and conditions to improve the effectiveness of state management on social security premium collection in Vietnam However, within certain limits, the thesis only focuses on the most basic issues of State management for social security premium collection Therefore, it is necessary for some other research to: - Study to access the remaining contents of state management on social security premium collection such as international cooperation on social security premium collection, - The current law does not control the amount of contributed capital of foreign investors in an enterprise which has registered business and conducted operations; meanwhile, the social security agency proceeds to collect social security premium on the basis of labor and salary In addition, the method of classifying business units of social security agencies is inconsistent, leading to the fact that the data on social security premium collection of foreign invested enterprises is not really sufficient and accurate Further research directions are made when the social security data system is more complete, classification of enterprises more accurately; practical research on a larger scale ... INVESTED ENTERPRISES IN VIETNAM 3.1 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... labor force have better results in attracting foreign investment than poor provinces 3.1.2 Results of social security premium collection of foreign-invested enterprises in Vietnam 3.1.2.1 Results... 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:
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