TAKING EXTENDED UNPAID LEAVE BUT WANTING TO CONTINUE PAYING SOCIAL INSURANCE IN FULL WITHOUT INTERRUPTION: WHAT SHOULD YOU DO?

During the course of employment, employees may, for various reasons, need to take unpaid leave for an extended period. However, taking unpaid leave may affect their participation in social insurance (SI), particularly for employees who wish to maintain a continuous period of SI contributions. So, can employees on extended unpaid leave continue to participate in SI? If they wish to maintain full and uninterrupted SI contributions, what should they do?

1. How can employees on extended unpaid leave continue paying social insurance?

Under the 2024 Law on Social Insurance, in principle, employees who do not receive salary for 14 or more working days in a month are not required to pay SI for that month. However, the law allows employees and employers to reach an agreement to continue paying SI during this period.

Specifically, an employee who falls within the category of persons subject to compulsory social insurance participation under Points a, b, c, d and i, Clause 1, and Clause 2, Article 2 of the 2024 Law on Social Insurance, and who does not receive salary for 14 or more working days in a month, is not required to pay social insurance for that month, except where the employer and employee agree to continue paying social insurance for the employee for that month, with the contribution base being equal to the social insurance contribution base of the most recent month.

Therefore, an employee taking extended unpaid leave who still wishes to continue making compulsory social insurance contributions in full and without interruption may reach an agreement with the employer to continue paying social insurance during the unpaid leave period.

This matter is specifically provided for in Clause 5, Article 33 and Clause 3, Article 34 of the 2024 Law on Social Insurance regarding compulsory social insurance contributions, as follows:

Article 33. Contribution rates, methods and deadlines for compulsory social insurance contributions by employees

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5. Persons specified in Points a, b, c, d and i, Clause 1, and Clause 2, Article 2 of this Law who do not receive salary for 14 or more working days in a month are not required to pay social insurance for that month, except where the employer and employee agree to pay social insurance for the employee for that month, with the contribution base being equal to the social insurance contribution base of the most recent month.

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Article 34. Contribution rates, methods and deadlines for compulsory social insurance contributions by employers

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3. Employers are not required to pay social insurance for persons specified in Clause 5, Article 33 of this Law, except where the employer and employee agree to pay social insurance for the employee for that month, with the contribution base being equal to the social insurance contribution base of the most recent month.

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Accordingly, taking unpaid leave for 14 or more working days in a month does not necessarily mean that the employee’s social insurance contribution period must be interrupted. Where the employee wishes to continue participating in social insurance, the two parties may agree to continue making social insurance contributions for the month of unpaid leave, with the contribution base being equal to the social insurance contribution base of the most recent month.

2. Why is maintaining the social insurance contribution period important?

The period of social insurance contributions is one of the important factors in determining an insured person’s entitlements when they become eligible for social insurance benefits under the law. Therefore, for employees who wish to maintain a continuous social insurance contribution period, it is important to understand the regulations governing social insurance contributions during unpaid leave.

In addition to the specific provisions applicable to unpaid leave, the 2024 Law on Social Insurance also establishes general principles governing participation in and entitlement to social insurance benefits.

3. What are the current principles governing social insurance?

To better understand social insurance contributions and the relationship between contribution levels, contribution periods and benefits, it is necessary to refer to the principles of social insurance set out in Article 5 of the 2024 Law on Social Insurance.

Pursuant to Article 5 of the 2024 Law on Social Insurance, the current principles governing social insurance are as follows:

• The level of compulsory and voluntary social insurance benefits is calculated based on the amount and period of social insurance contributions, with risk-sharing among social insurance participants in accordance with this Law.
• Compulsory social insurance contributions are calculated based on the salary serving as the basis for compulsory social insurance contributions. Voluntary social insurance contributions are calculated based on the income selected by the participant as the basis for voluntary social insurance contributions.
• A person who has both compulsory and voluntary social insurance contribution periods is entitled to monthly benefits, retirement benefits and survivorship benefits based on the periods of compulsory and voluntary social insurance contributions.
• A period of social insurance contributions that has already been used as the basis for receiving a lump-sum social insurance benefit may not be included in the period used as the basis for calculating social insurance benefits.
• The social insurance fund is managed centrally, uniformly, publicly and transparently; used for proper purposes; and accounted for independently according to its component funds and groups of persons subject to salary regimes prescribed by the State and salary regimes determined by employers.
• The implementation of social insurance must be simple, easy and convenient, ensuring the timely and full enjoyment of benefits by participants and beneficiaries of social insurance.
• The minimum social insurance contribution period for determining eligibility for retirement pensions and monthly survivorship benefits is calculated by year, with one year consisting of a full 12 months. For the purpose of calculating benefit levels, a fractional period of 01 to 06 months is counted as half a year, while a fractional period of 07 to 11 months is counted as one year.
• The settlement of social insurance benefits shall be determined in accordance with the social insurance laws in effect at the time the social insurance benefits are claimed.

Accordingly, the social insurance contribution period plays an important role in determining the benefits of participants. Therefore, in cases of extended unpaid leave, employees should proactively discuss with their employers the option of continuing social insurance contributions if they wish to maintain a continuous contribution period.

Will an employer’s failure to make social insurance contributions on time be publicly disclosed?

In addition to the rights and obligations of employees during their participation in social insurance, the law also imposes responsibilities on employers to properly and fully fulfill their social insurance contribution obligations.

Notably, where an employer delays social insurance contributions or evades compulsory social insurance contributions, the social insurance authority is responsible for taking measures to urge compliance and publicly disclose information in accordance with the law.

Clause 2, Article 35 of the 2024 Law on Social Insurance provides as follows:

Urging the fulfillment of obligations to make compulsory social insurance and unemployment insurance contributions

1. In cases specified in Clause 1, Article 38 of this Law, the social insurance authority is responsible for detecting the violation and issuing written notices urging compliance.

Upon detecting that an employer has delayed contributions in the cases specified in Clauses 2 and 3, Article 38 of this Law or has evaded contributions, the social insurance authority is responsible for promptly issuing written notices urging compliance.

2. The social insurance authority shall publicly disclose on its electronic information portal information concerning employers that have delayed or evaded compulsory social insurance and unemployment insurance contributions.

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The provision expressly states that the social insurance authority shall publicly disclose on its electronic information portal information concerning employers that have delayed or evaded compulsory social insurance and unemployment insurance contributions.

Conclusion

Accordingly, an employee who does not receive salary for 14 or more working days in a month is, in principle, not required to pay social insurance for that month. However, if the employee wishes to continue making social insurance contributions in order to avoid an interruption in their contribution period, they may reach an agreement with the employer to continue paying social insurance during the unpaid leave period.

In this case, the social insurance contribution base is determined based on the social insurance contribution base of the most recent month, in accordance with Clause 5, Article 33 and Clause 3, Article 34 of the 2024 Law on Social Insurance.

Therefore, before taking extended unpaid leave, employees should discuss and clearly agree with their employers on whether social insurance contributions will continue during the unpaid leave period, in order to safeguard their social insurance contribution history and related entitlements.