In early October, the Thuan Thien factory, which specializes in shoe manufacturing, located in District 12 of Ho Chi Minh City, received resignation letters from around 500 workers.
Production at the factory has slowed so far this year due to a lack of orders, and workers are no longer forced to work overtime or weekends as before, although their wages are not reduced.
Most recently, the factory’s parent company received new orders to produce more than 3 million pairs of shoes by the end of the year, meaning the factory must produce between 250,000 and 280,000 pairs per month.
Nguyen Quang Toan, head of human resources management at the factory, said it would need 2,500 employees to meet the deadline, but only has 2,000 left.
Most of those who resigned have worked at the factory for 10 to 18 years.
“They all resigned so they could benefit from the single social insurance before the revised law came into effect,” he said.
According to the company, workers began quitting in July when a revised social insurance bill was under discussion.
The proposal that most people have been paying attention to in the draft suggests that those who choose to make a one-time withdrawal will only be allowed to withdraw 50% of their contributions.
Under current policy, social security holders can only receive their pension 20 years after paying their contributions.
The conditions for withdrawing from social insurance in one go are quite easy to meet at present. Participants in Vietnam’s compulsory social insurance scheme can withdraw it after one year of unemployment; and voluntary participants after one year without paying premiums.
“We have tried every means possible to retain workers, because a qualified worker is three times more productive than a new one,” Toan said. “If workers continue to quit, it would be very difficult for the company.”
Not far from the Thuan Thien factory, Viet An Garment Production Trading Co. Ltd. in Tan Binh district is in the same situation.
Many of its employees now want to resign to benefit from the single social insurance, while the company has only just started receiving new orders for the upcoming holiday season, after months of low demand.
In Long An and Dong Nai provinces bordering the city, factories also reported a reduction in their workforce due to the revised social insurance bill.
At a workshop held earlier this month in HCMC to gather feedback on the project, Bui Thi Ngoc Trang, chairwoman of the Industrial Parks Union of Long An Province, said a company in the province had lost more than half of its workforce. 5,000.
Vu Ngoc Ha, director of the legal advice center of the Dong Nai province labor union, shared the same situation, saying that workers had rushed to ask for their resignations despite the fact that factories had started receiving orders again .
Nguyen Phan Bao Khuyen, a staff member at the HCMC union legal advice center, said that in most cases, workers were affected by unverified information on social media.
She said workers who wanted to resign and benefit from the one-time social insurance withdrawal told her they wanted to withdraw money to start their own businesses or put it in banks, which they said would benefit them. would grant more benefits than continuing to work and paying insurance premiums and waiting for the retirement pension, which they considered low.
Before 2021, the retirement age was 55 for women and 60 for men. From 2021, the government gradually increased the retirement age until it reached 60 for women and 62 for men.
Those who retire at state pension age and contribute to social insurance for at least 35 years (for men) and 30 years (for women) will be entitled to the highest pension rate, i.e. 75% of their last salary.
This means that many older workers who have fully paid their social insurance contributions will have to work for many more years to obtain the maximum pension and feel more financially secure about their retirement.
