Probationary Employees Not Subject to Participation in Social Insurance

Regarding the Time Basis for Calculating Severance Allowance for Employees

According to the provisions in Clause 3 Article 14 of Decree 05/2015/ND-CP dated January 12, 2015, issued by the Government of Vietnam, the working time used to calculate severance allowance is the total actual working time that the employee has worked for the employer, minus the period during which the employee has participated in unemployment insurance as stipulated by law, and the working time for which the employer has already paid the severance allowance.

In particular:

- Actual working time for the employer includes the period during which the employee is on leave to enjoy policies under the provisions of the Social Insurance Law 2014.

- Period of unemployment insurance participation includes the time when the employer has paid unemployment insurance as stipulated by law and the time when the employer has made a payment equivalent to the unemployment insurance contribution together with the employee's salary payment period.

The working time for calculating severance allowance is calculated by the year (full 12 months). In cases of fractional months, from 1 full month to less than 6 months is counted as ½ year; from 6 months and above is counted as 1 full working year.

Therefore, if an employee terminates the labor contract and has a period without participating in unemployment insurance due to illness or maternity leave from one full month or more, the company is responsible for paying severance allowance to the employee for the said period.

Regarding Unemployment Insurance Participation During the Probationary Period

According to the provisions in the Social Insurance Law (2006, 2014), employees who work under indefinite-term labor contracts, fixed-term labor contracts from 3 months or more (from January 1, 2018, fixed-term labor contracts from 1 month or more) are subject to compulsory social insurance participation.

According to Articles 26 and 27 of the Labor Code 2012, the employer and the employee may agree on probation, rights, and obligations of both parties during the probation period. If there is an agreement on probation, the parties can enter into a probation contract. The probation contract must include the contents specified in points a, b, c, d, dd, g, and h Clause 1 Article 23 of this Code, excluding the contents related to social insurance and health insurance.

Thus, during the probation period according to the probation contract, the employee is not subject to compulsory social insurance participation.

According to the Electronic Information Portal of the Ministry of Labor, Invalids and Social Affairs

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