Who are compulsory participants in unemployment insurance in Vietnam? What are the latest methods of payment of unemployment insurance premiums in Vietnam?
Who are compulsory participants in unemployment insurance in Vietnam?
Pursuant to Article 43 of the 2013 Law on Employment stipulating as follows:
Compulsory participants in unemployment insurance in Vietnam
1. Workers are obliged to participate in unemployment insurance when working under employment contracts or working contracts below:
a/ Employment contracts or working contracts of indefinite time;
b/ Employment contracts or working contracts of definite time;
c/ Seasonal or job-based working contracts with a term of between full 3 months and under 12 months.
In case a worker has signed and is performing more than one employment contract specified in this Clause, the worker and the employer under the employment contract signed first shall participate in unemployment insurance.
2. Workers defined in Clause 1 of this Article who are currently on pension or doing housework are not required to participate in unemployment insurance.
3. Employers obliged to participate in unemployment insurance include state agencies, public service providers and people’s armed forces units; political organizations, socio-political organizations, socio-political-professional organizations, social organizations and socio-professional organizations; foreign agencies and organizations and international organizations operating in the Vietnamese territory; enterprises, cooperatives, households, business households, cooperative groups, other organizations and individuals that hire or employ workers under the employment contracts or working contracts specified in Clause 1 of this Article.
Thus, employees and employers in the above cases will be required to participate in unemployment insurance according to current regulations.
Who are compulsory participants in unemployment insurance in Vietnam? What are the latest methods of payment of unemployment insurance premiums in Vietnam?
How does Decision No. 490/QD-BHXH change the methods of payment of unemployment insurance premiums?
On March 28, 2023, Vietnam Social Insurance has just issued Decision No. 490/QD-BHXH in 2023.
Pursuant to the provisions of Clause 5, Article 2 of Decision No. 490/QD-BHXH in 2023 as follows:
Amending and supplementing a number of articles of the process of collecting social insurance, health insurance, unemployment insurance, occupational accident and occupational disease insurance; manage social insurance books and health insurance cards issued together with Decision No. 595/QD-BHXH dated April 14, 2017 by the General Director of Vietnam Social Insurance as follows:
....
5. To amend Article 16 as follows:
“Article 16. Method of payment
Every month, the employer pays unemployment insurance premiums and deducts each employee's salary according to the prescribed rate to contribute at the same time to the UI Fund."
Decision No. 490/QD-BHXH in 2023 modified the method of paying unemployment insurance premiums according to the monthly payment method.
Thus, from April 1, 2023, every month, the employer shall pay unemployment insurance premiums and deduct the salary of each employee according to the prescribed rate to contribute at the same time to the Unemployment Insurance Fund.
What are the methods of payment of unemployment insurance premiums before April 1, 2023?
Previously, according to Article 16 of the Procedures issued together with Decision No. 595/QD-BHXH in 2017 stipulating as follows:
Methods of payment
Methods of payment of unemployment insurance premiums applying to both employers and employees shall comply with Clauses 1, 2 and 3 of Article 7.
Refers to Article 7 Procedures enclosed with Decision No. 595/QD-BHXH in 2017 (amended by clause 13 Article 1 of Decision No. 505/QD-BHXH in 2020 and clause 1 Article 1 of Decision No. 888/QD-BHXH in 2018) as follows:
Payment methods prescribed in Articles 85 and 86 of Law on social insurance and its instructional documents
1. Monthly payment
Every month, no later than the last day of the month, the employers shall make deductions from the monthly salary fund of participants in compulsory social insurance to pay for compulsory social insurance contributions and simultaneously make deductions from monthly salary as the basis for payment of compulsory social insurance of each employee at prescribed rate and transfer them at the same time to the collecting account opened at the state banks or treasuries by the social insurance authorities.
2. If enterprises, cooperatives, sole proprietorship households, cooperative associations operating their business in the agriculture, forestry, aquaculture, salt industry pay their employees in a piece-rate or lump-sum manner, they can register either three-monthly or six-monthly contribution regime with Social Security authorities. Social Security authorities in conjunction with labor authorities can conduct field inspection at each unit before deciding between these regimes for the unit's implementation. They are obliged to pay contributions in full to the SI scheme by the ending day of the permitted contribution interval at the latest.
3. Payment by areas
3.1. An employer whose head office is located in a province shall register to pay social insurance contributions in this province under the assignment of the social insurance authority of the province.
3.2. An enterprise’s branch shall pay social insurance contributions in the area where it operates or at the parent company.
Thus, before April 1, 2023, employees' unemployment insurance premiums will be paid in three methods: 1 month, 3 months or 6 months.
However, from April 1, 2023, employees' unemployment insurance premiums will only be paid according to the monthly payment method.
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