Vietnam: All things to note about unemployment insurance in 2019

1. What is unemployment insurance?

Unemployment insurance is a measure to support employees in resolving unemployment situations, aiming to timely provide assistance to individuals who are currently unable to find employment and creating opportunities for them to learn new skills and seek new jobs.

This is considered one of the important schemes of insurance. Monthly, both employees and employers will contribute a portion of their income to the unemployment insurance fund.

2. Levels of payable unemployment insurance premiums

According to Vietnam’s current regulations, every month, enterprises shall contribute to unemployment insurance for their employees, deducting 2% from the monthly salary. Specifically:

- Enterprises shall contribute 1% from the monthly salary of participating employees to the unemployment insurance fund.

- Employees shall contribute 1% from their monthly salary.

The minimum monthly salary used to calculate the contribution is the regional minimum wage, and the maximum is 20 times the regional minimum wage.

3. Conditions for unemployment allowance receipt

According to Article 49 of the Law on Employment 2013 of Vietnam, an employee who currently pays unemployment insurance premiums may receive unemployment allowance when fully meeting the 04 following conditions:

- Terminating the labor contract or working contract, except the following cases:

+ He/she unilaterally terminates the labor contract or working contract in contravention of law;

+ He/she receives monthly pension or working capacity loss allowance.

- Having fully paid unemployment insurance premiums as prescribed by law, specifically as follows:

+ Having paid unemployment insurance premiums for at least full 12 months within 24 months before terminating the labor contract or working contract, for the case of indefinite-term and definite-term labor contract or working contract;

+ Having paid unemployment insurance premiums for at least full 12 months within 36 months before terminating the labor contract, for the case of seasonal or job-based working contracts with a term of between full 3 months and under 12 months.

- Having submitted a dossier for receipt of unemployment allowance to an employment service center.

- Having not yet found any job after 15 days from the date of submission of the dossier for receipt of unemployment allowance, except the following cases:

+ He/she performs the military or public security obligation;

+ He/she attends a training course of full 12 months or longer;

+ He/she serves a decision on application of the measure to send him/her to a reformatory, compulsory education institution or compulsory detoxification establishment;

+ He/she is kept in temporary detention or serves a prison sentence;

+ He/she goes abroad for settlement or as guest worker;

+ He/she dies.

Note: Within 3 months after terminating his/her labor contract or working contract, an employee shall submit a dossier for receipt of unemployment allowance to an employment service center.

4. Levels, duration and time of receipt of unemployment allowance

* Levels of receipt of unemployment allowance

According to Clause 1 Article 50 of the Law on Employment 2013, 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.

Note: The monthly unemployment allowance level must not exceed 5 times the basic wage level, for employees receiving wages under the State-prescribed regime, or must not exceed 5 times the region-based minimum wage level under the Labor Code, for employees who pay unemployment insurance premiums under the wage regime decided by employers.

* Duration of receipt of unemployment allowance

According to Clause 2 Article 50 of the Law on Employment 2013, 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.

* Time of receipt of unemployment allowance

The time for unemployment allowance receipt is counted from the 16 th day after the date of submission of a complete dossier for receipt of unemployment allowance as specified in Clause 1, Article 46 of this Law.

This content is specified in Clause 3 Article 50 of the Law on Employment 2013.

Note: From January 01, 2015, the lump-sum unemployment benefit is no longer in effect. Instead, individuals will receive monthly unemployment benefits, and the duration of benefit payments will be determined according to the regulations of the Social Insurance Organization of Vietnam.

5. Cases of reserving the period of payment of unemployment insurance premiums

According to Clause 4 Article 53 of the Law on Employment 2013, employees may have the period of payment of unemployment insurance premiums reserved for calculating the subsequent duration of receipt of unemployment allowance in the following cases:

- He/she has found a job;

- He/she performs the military or public security service obligation;

- He/she attends a training course of full 12 months or longer;

- He/she serves a decision on application of the measure to send him/her to a reformatory, compulsory education institution or compulsory detoxification establishment;

- He/she is declared by a court as missing;

- He/she is kept in temporary detention;

- He/she serves a prison sentence.

Note: The reserved period equals the total of the periods of payment of unemployment insurance premiums minus the period during which the worker has received unemployment allowance, with one month of receipt of unemployment allowance equivalent to 12 months of payment of unemployment insurance premiums.

- Nguyen Trinh -

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