Hanoi-Vietnam: Guidance on calculation of unemployment benefits 2016

In cases where all conditions stipulated in Article 49 of the Law on Employment are met, individuals who have paid unemployment insurance premiums will be entitled to unemployment benefits. The calculation of unemployment benefits in Vietnam is applied according to the provisions of Article 50 of the Law on Employment and Circular 28/2015/TT-BLDTBXH.

The monthly unemployment benefit

1. In the last months before unemployment, if there is a period over which the payment for unemployment insurance premiums are paid (hereinafter referred to as payment period) that is interrupted, the 6-month payment period does not need to be continuous.

Example 1: Ms. Nguyen Thi A entered into a 24-month labor contract with E primary school with the monthly salary as follows: VND 2 million from September 1, 2013 to August 31, 2014 and VND 4 million from September 1, 2014 to August 31, 2015. However, from January 1, 2015 to June 30, 2015, Ms. A took maternity leave. Subsequently, due to family circumstances, Ms. A failed to keep performing the labor contract. Therefore, Ms. A submitted a letter of resignation as prescribed in law on labors and the E primary school issued a decision on acceptance for the resignation of Ms. A, which comes into force from the day on which it is signed, on July 1, 2015. Consequently, the salary amount on which the unemployment benefit premiums are paid is the average 6-month salary over the payment period before resignation (July, August, September, October, November, and December of 2014). Her monthly unemployment benefit equals (VND 2 million x 2 months + VND 4 million x 4 months)/6 x 60% = VND 2 million.

Example 2: Mr. Dao Van B had 38 consecutive month’s payment period (from January 1, 2012 to February 28, 2015), the monthly salary on which unemployment insurance is paid over the last 6 months before the labor contract termination (from September 9, 2014 to February, 2015) was VND 8 million. Mr. B was eligible for unemployment benefit for 3 months (hereinafter referred to as payout period, from April 5, 2015 to July 4, 2015). On May 2, 2015, Mr. B concluded a 12-month labor contract with enterprise X (the monthly salary on which unemployment insurance is paid was VND 7 million) and notified the employment service center as prescribed. From May 2, 2015, Mr. B stopped receiving unemployment benefit and 26-month payment period/payment period of 26 months was preserved. On July 28, Mr. B agreed to terminate the labor contract with enterprise X due to his sickness and claimed unemployment benefit for the second time. His payment period of 6 consecutive months comprises: December of 2014 and January, February, May, June and July of 2015. Consequently, his monthly unemployment benefit equals (VND 8 million x 3 months + VND 7 million x 3 months)/6 x 60% = VND 4.5 million.

2. The maximum monthly unemployment benefit to which the employee is eligible does not exceed 5-month base salary applicable to employees receiving salaries as prescribed by the State or does not exceed 5-month regional minimum wage as prescribed in the Labor Code applicable to employees receiving salaries decided by the employers at the time of labor contract termination.

Example 3: On October 1, 2015, Mr. Trinh Xuan C concluded a 12-month labor contract with enterprise F with the monthly salary level of VND 70 million. The enterprise F operates in the region I which applies the monthly regional minimum wage of VND 3.1 million as prescribed by the Government. Therefore, the monthly salary on which the unemployment insurance is paid is: 20 x VND 3.1 million = VND 62 million.

On September 28, 2015, Mr. C agreed to terminate the labor contract with the enterprise F and concluded a 3-month labor contract with enterprise G (from October 1, 2015 to December 31, 2015) with the monthly salary of VND 80 million. The enterprise G has the headquarter operated in the region IV which applies the monthly regional minimum wage of VND 2.15 million as prescribed by the Government. However, Mr. C did not work at the headquarter but work a branch that operates in region III and applies the monthly regional minimum wage of VND 2.4 million as prescribed by the Government. Accordingly, Mr. C bought and paid unemployment insurance premiums at the social security agency where the branch operates according to the monthly salary amount of: 20 x VND 2.4 million = VND 48 million.

When the labor contract with the enterprise G expired, Mr. C applied for unemployment benefit. Therefore, 60% of average salary of 6 consecutive months before the labor contract termination equals (VND 62 million x 3 months + VND 48 million x 3 months)/6 x 60% = VND 33 million. However, Mr. C may not receive the unemployment benefit which exceeds 5-month regional minimum wage as prescribed at the time of labor contract’ termination. Therefore, the monthly unemployment benefit to which Mr. C is eligible is VND 12 million (VND 2.4 x 5 = VND 12 million).

The months over which the unemployment benefits are received

The payout months shall be expressed as calendar months. Each payout month shall be determined from the first date on which the employee starts receiving unemployment benefit as prescribed in Clause 3 Article 50 of the Law on employment to the previous date of the same date of the next month.

Example 4: Mr. Cao Van D is entitled to receive 3-month unemployment benefit; the payout period of Mr. D is from March 11, 2015 to June 10, 2015. Accordingly, the payout months shall be determined as follows:

The first payout month is from March 11, 2015 to April 10, 2015;

The second payout month is from April 11, 2015 to May 10, 2015;

The third payout month is from May 11, 2015 to June 10, 2015.

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