Beginning January 1, 2018, employers who commit the acts of (i) evading payment of social insurance (“SI”), health insurance (“HI”), unemployment insurance (“UI”) on behalf of employees and/or (ii) illegal dismissal of employees may be prosecuted for criminal liability.

Evasion of SI, HI, UI payment on behalf of employees

The payment of SI, HI and UI on behalf of employees is a mandatory obligation of employers, as specified in Article 6 of the 2019 Labor Code. Employers who commit fraud or use other methods to avoid paying or fully paying SI, HI, and UI on behalf of employees as required for a period of six months or more may be prosecuted for the offence of evading payment of SI, HI, and UI under the provision of Article 216 of the 2015 Penal Code, amended and supplemented in 2017. The State’s justification for punishing employers is to protect employees’ legitimate rights and interests while ensuring that the SI, HI, and UI funds are not depleted.

Illegal dismissal of employees

Dismissal of an employee is the most severe form of labor punishment, in which the employer exercises his/her managerial power to compel the employee to quit, regardless of the validity of the employment agreement. However, not all dismissal decisions are legal.  In addition to the responsibility to the employee when illegally firing, the State also imposes criminal liability on the person who illegally dismisses an employee. Specifically, an individual who, for personal gain or other personal motives, illegally dismisses an employee, resulting in serious consequences, may be prosecuted for criminal liability under Article 162 of the 2015 Penal Code, amended and supplemented in 2017.

To avoid violating the above-mentioned acts, businesses need to review labor regulations on a regular basis, as well as control and manage personnel-related activities such as the payment of SI, HI, and UI for employees, and the process and grounds for disciplining employees. Le & Tran has over a decade of experience in the fields of business consultancy and labor dispute resolution, and we understand the needs of businesses, the dangers they may face, and the most effective ways to assist them in resolving employee-related issues. Simultaneously, with a team of qualified criminal lawyers on our side, we are uniquely equipped to fully protect businesses and employers from unfounded allegations.