Vietnam: Guidelines on calculation of severance allowance of public employees (latest)

For your question, LAWNET would like to answer as follows:

Currently, the calculation of severance allowance for severing public employees is prescribed in Decree No. 115/2020/NĐ-CP of Vietnam, to be specific:

1. For public employees who have been working since December 31, 2008 and earlier, and now resign, the severance allowance shall be calculated as follows:

- Each working year is equal to 1/2 of the current salary, including: salary according to professional title, allowance for management position, extra-seniority allowance, seniority allowance and differential coefficient difference in salary reserve (if any).

- The minimum allowance is equal to 01 month's current salary.

- In case the public employee is recruited before July 01, 2003, the working time for which severance allowance is calculated is the total working time (cumulative) from the time the public employee has the recruitment decision until the end of December 31, 2008.

=> Your working period from July 10, 2006 to the end of December 31, 2008 is 2 years 5 months 21 days, because the Decree No. 115/2020/NĐ-CP does not have separate guidelines on rounding the severance allowance calculation period for severing public employees, so the rounding of working time with odd months is done according to Point c Clause 3 Article 14 of Decree No. 05/2015/NĐ-CP as follows:

Working time serving as the basis for calculating severance pay and redundancy pay to employees shall be in years (full 12 months)and the period from 01 full month to under 06 months shall be rounded to a half of year; the period from full 06 months to 01 year shall be rounded to 1 year.

Thus, your severance allowance from December 31, 2008 backwards = 2.5 (years) x ½ x 6.258.400 (VND). (1)

2. For public employees who have been working from January 01, 2009 to present, the severance allowance shall comply with the provisions of the law on unemployment allowance.

According to Article 50 of the Law on Employment 2013 of Vietnam, unemployment allowance are specified as follows:

- The monthly unemployment allowance level equals 60% of the average monthly wage of 6 consecutive months before the worker becomes unemployed on which unemployment insurance premiums are based, but must not exceed 5 times the basic wage level.

- The duration of unemployment allowance receipt is based on the number of months of payment of unemployment insurance premiums. This duration is 3 months if the period of payment of unemployment insurance premiums is between full 12 months and full 36 months, which is added with 1 month for each additional period of payment of full 12 months, but must not exceed 12 months.

=> From January 01, 2009 to December 01, 2020 is 11 years and 11 months, you have full 11 years of paying unemployment insurance. Therefore, you are entitled to 11 months of severance allowance as prescribed above.

Your unemployment benefit from January 01, 2009 to December 01, 2020 = 11 (months) x 60% x 6.258400 (VND). (2)

Thus, according to (1) and (2), the total unemployment benefit for the public employee in this case = 2.5 x ½ x 6.258.400 + 11 x 60% x 6.258.400 = 49.128.440 (VND).

Hai Thanh

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE