Social insurance obligations during the probation period stipulated in an employment agreements

Probation is an agreement between the Employer and the Employee whereby the Employee will perform the job on a trial basis for a specified period. The purpose of the probation period is to evaluate the Employee’s skills, qualifications, awareness, working conditions, adaptability to the working environment, and other factors before deciding to sign an official employment agreement. Pursuant to the applicable Labor Code, the Employers and the Employees can agree on the terms of the probation period in the employment agreement or through a separate probationary contract. 

However, a question arises regarding whether the Employers and the Employees are required to fulfill social insurance obligations as per regulations when the probation period is stipulated in the employment agreement. This remains a contentious issue affecting the rights and obligations of both parties.

1. Regulations related to probation periods under the labor law

1.1 Probation Period Duration: The probation period is agreed upon by both parties based on the nature and complexity of the job, but it is allowed only once for a particular job and must meet the following conditions: 

(i) No more than 180 days for managerial positions as defined by the Enterprise Law and the Law on Management and Use of State Capital Investment in Production and Business Enterprises; 

(ii) No more than 60 days for positions requiring higher education or technical qualifications equivalent to college level or above; 

1. No more than 30 days for positions requiring intermediate technical qualifications, technical workers, or professional staff; 

1. No more than 6 working days for other types of work.(1)

Note: Probation does not apply to Employees who enter into an employment contract with a term of less than 1 month.(2)

1.2 Probationary Salary: 

The salary of the Employee during the probation period is agreed upon by both parties but shall be at least 85% of the salary for the job position.(3)

1.3 Conclusion of the Probation Period:  

(i) At the end of the probation period, the Employer must notify the Employee of the probation results. 

– If the probation is successful, the Employer will continue to implement the employment contract if the probation terms are included in the employment agreement or must enter into an employment agreement if entering into a probationary agreement beforehand. 

– If the probation is unsuccessful, the Employer will terminate either the existing employment or the probationary agreements. 

(ii) During the probation period, either party shall have the right to terminate the probationary agreement or the employment agreement without prior notice and compensation.(4)

2. Obligations for social insurance during the probation period stipulated in the employment agreement

Pursuant to the law on social insurance 2014, Employees working under an indefinite-term employment agreement, a fixed-term employment agreement, a seasonal agreement, or an agreement for a specific job with a duration of 3 months to less than 12 months are subject to mandatory social insurance contributions.(5)

Based on this regulation, both Employees and Employers are responsible for participating in mandatory social insurance when entering into an employment agreement.(6) In other words, the effective date of the employment agreement is the time when the obligation to contribute to social insurance is established for both parties. 

Furthermore, the law does not specify whether social insurance contributions should be made during the probation period if it is included in the employment agreement or if such obligations should be made only when the Employee officially begins working for the Employer. 

In practice, most social insurance agencies interpret and apply the regulation that Employers and Employees must fulfill social insurance obligations at the time of signing the agreement, even if the agreement includes a probation period. Therefore, during the probation period, both parties are still required to make social insurance contributions as stipulated. 

If the Employer prefers to make social insurance contributions only from the time when the Employee starts working officially, the Employer might consider entering into a separate probationary agreement from the employment agreement This probationary agreement should include: 

(i) The name and address of the Employer and the name and position of the person representing the Employer in the probationary agreement; 

(ii) The Employee’s name, date of birth, gender, place of residence, and identity card number or passport number of the person entering into the probationary agreement on the Employee’s side; 

(iii) The job and workplace location; 

(iv) The salary for the job or position, salary payment method, payment frequency, allowances, and other additional payments; 

(v) Working hours and rest periods; 

(vi) Provision of personal protective equipment for the Employee.(7)

(1) Article 25 of Labor Code 2019 

(2) Article 24.3 of Labor Code 2019 

(3) Article 26 of Labor Code 2019 

(4) Article 27 of Labor Code 2019 

(5) Article 2.1 of Law on Social Insurance 2014.

(6) Article 19 and Article 21.2 of Law on Social Insurance 2014

(7) Article 24.2 of Labor Code 2019 

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