Can employers reduce unemployment insurance payments due to impact of the Covid-19 epidemic in Vietnam?

Can employers reduce unemployment insurance payments due to impact of the Covid-19 epidemic in Vietnam?

Pursuant to Article 4 of Decision 28/2021/QD-TTg regulating employers eligible for reduction as follows:

Employers that are prescribed in Article 43 of the Law on Employment, participating in unemployment insurance before October 01, 2021, except:

1. State agencies, political organizations, socio-political organizations, units of people’s armed forces. 

2. Public service providers whose recurrent expenditures are financed by the state budget according to the Government’s Decree No. 60/2021/ND-CP and applicable regulations of law on financial autonomy of public service providers.

The public service provider that is eligible for reduction shall submit to the social insurance authority to which it is paying unemployment insurance 01 copy of the competent authority’s document about its financial autonomy according to  the Government’s Decree No. 60/2021/ND-CP and applicable regulations of law on financial autonomy of public service providers.

3. Not applicable to those who voluntarily waive the aid.

According to Article 43 of the Employment Law 2013, regulations on compulsory participants in unemployment insurance are as follows:

1. Workers are obliged to participate in unemployment insurance when working under labor contracts or working contracts below:

a/ Labor contracts or working contracts of indefinite time;

b/ Labor 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 labor contract specified in this Clause, the worker and the employer under the labor 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 non-business units 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 labor contracts or working contracts specified in Clause 1 of this Article.

Thus, employers specified in Article 43 of the Employment Law who are participating in unemployment insurance before October 1, 2021, excluding the cases specified in Article 4 of the above Decision, will have their contribution rates reduced due to the impact of the Covid-19 pandemic in Vietnam.

Can employers reduce unemployment insurance payments due to impact of the Covid-19 epidemic in Vietnam? (Image from the Internet)

What are reduction rates of unemployment insurance premiums in Vietnam? 

Pursuant to Article 5 of Decision 28/2021/QD-TTg regulating reduction rates and time as follows:

1. Reduction from 1% to 0% of the monthly wage fund for employees who are participating in unemployment insurance.

2. Duration: 12 months, from October 1, 2021 to September 30, 2022 inclusive.

3. Every month during October 01, 2021 to September 30, 2022, social insurance authorities shall reduce the contribution rates payable to employers to 0% of the monthly wage fund for employees who have participated in unemployment insurance.

Thus, the unemployment insurance premium is reduced from 1% to 0% of the monthly salary fund of employees participating in unemployment insurance in Vietnam.

In the above case, you are a private business owner who is eligible for a reduction in unemployment insurance payments for employees due to the impact of the Covid-19 epidemic. According to this Article, the unemployment insurance premium you must pay is reduced from 1% to 0% of the monthly salary fund of employees participating in unemployment insurance in Vietnam.

Best regards!