THE WAGES ACTUALLY PAID AND WAGES USED AS THE BASIS FOR SOCIAL INSURANCE CONTRIBUTIONS: A JUDGMENT STUDY AND COMPARATIVE LESSONS FROM INDONESIA, SOUTH KOREA, JAPAN AND CHINA
DOI:
https://doi.org/10.26740/ijllir.v3i01.57435Keywords:
wages as the basis for social insurance contributions, wage splitting, regional minimum wage, comparative law, Indonesia, East AsiaAbstract
Abstract
Drawing on Judgment No. 1180/2023/LĐ-PT of the People’s Court of Ho Chi Minh City, this article examines the “dual wage” phenomenon in Vietnam, whereby the same panel of judges, on the same body of evidence, determined the employee’s wage to be VND 20 million per month when settling wage arrears, yet only VND 6 million per month when determining the base for retrospective social insurance contributions. Situated within the envelope-wages literature, the article identifies a hitherto undescribed variant — formally lawful wage splitting — in which every payment is documented and bears precisely the label that the law excludes from the contribution base. The analysis shows that the defect lies in the enumerative legislative technique, not in adjudication. Employing functional comparison with Indonesia, South Korea, Japan and China, the article proposes amending Article 31 of Vietnam’s 2024 Law on Social Insurance towards a catch-all definition, imposing absolute ceilings on excluded items and nullifying any agreement that depresses the contribution base, with accompanying policy implications for Indonesia.
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