A member of the Board of Directors is an enterprise manager and may receive salary, remuneration, bonus and other regimes according to regulations.
Legal grounds:
- Enterprise Law 2020;
- Law on Social Insurance 2014.
We get the following questions:
My company is a joint stock company, the members of the Board of Directors are paid monthly but do not enter labor contracts. I want to ask if the company has to participate in social insurance for these people?
The members of the Board of Directors are those who work under the regime elected by term. Members of the Board of Directors may not hold positions in any department in a joint-stock company, but they will still be paid income to fulfill their duties in the Board of Directors.
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Income of members of the Board of Directors
Pursuant to Point a, Clause 2, Article 163 of the Law on Enterprises in 2020 as follows:
Article 163. Salary, remuneration, bonus and other benefits of members of the Board of Directors, Director, General Director
2. Unless otherwise provided for in the company’s charter, salaries, remuneration, bonuses and other benefits of members of the Board of Directors, Director or General Director shall be paid according to the following provisions:
- Members of the Board of Directors are entitled to work remuneration and bonuses. Remuneration for work is calculated according to the number of working days required to complete the tasks of a member of the Board of Directors and the remuneration per day. The Board of Directors estimates the remuneration for each member on the principle of consensus. The total remuneration and bonus of the Board of Directors shall be decided by the General Meeting of Shareholders at the annual meeting;
According to the above provisions, unless otherwise provided in the company’s charter, members of the Board of Directors are entitled to income including:
- Remuneration for performing duties as a member of the Board of Directors;
- Bonus.
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Members of the Board of Directors have to pay compulsory social insurance?
According to Article 163 of the Enterprise Law 2020, unless otherwise provided in the charter, members of the Board of Directors are not entitled to salary.
Pursuant to Point h, Clause 1, Article 2 of the Law on Social Insurance as follows:
Article 2. Subjects of application
1. Employees being Vietnamese citizens are eligible to participate in compulsory social insurance, including:
h) The enterprise manager, the executive manager of the cooperative receiving salary;
According to the above provisions, if an individual acts only as a member of the Board of Directors but does not hold any other position in the company under the employment contract, there are 2 cases:
- If the company’s charter stipulates that members of the Board of Directors are entitled to salary, the company and members of the Board of Directors must participate in compulsory social insurance;
- If members of the Board of Directors do not receive salary, they are not subject to participation in compulsory social insurance.
