How do employees pay insurance when the regional minimum wage increases?

According to Decision 595/QD-BHXH, monthly, employees and employers will have to pay for compulsory insurances including: compulsory social insurance, health insurance (HI) ), unemployment insurance (UI).

According to Clause 2, Article 89 of the Law on Social Insurance 2014, this amount includes salary, salary allowance and other additional amounts which are specifically recorded and paid regularly during the salary period for employees.

Illustration.

In addition, Point 2.6, Clause 2, Article 6 of Decision 595/QD-BHXH stipulates:

2.6. The monthly salary for which compulsory social insurance is paid specified in this Clause must not be lower than the regional minimum wage at the time of payment for who perform the simplest jobs or titles under normal working conditions.

a) Employees who perform jobs or titles that require trained or apprenticed workers (including those trained by enterprises themselves) must be at least 7% higher than the regional minimum wage;

b) Employees doing jobs or titles with heavy, hazardous or dangerous working conditions must be at least 5% higher; a job or title with particularly heavy, hazardous or dangerous working conditions must be at least 7% higher than the salary of a job or title of equivalent complexity, working in poor conditions.

Therefore, the regional minimum wage has a direct influence on the minimum salary for monthly social insurance contributions. When the regional minimum wage increases, employees and employers who are paying insurance premiums with a low salary will have to adjust the increase to ensure that it is higher or equal to the new regional minimum wage.