What Payments Do Employees Receive When They Leave Their Job?

Severance Allowance

According to Clause 1 Article 14 of Decree 05/2015/ND-CP, employers are responsible for paying severance allowances to employees who have worked regularly for them for 12 months or more when the labor contract is terminated according to Clauses 1, 2, 3, 5, 6, 7, 9 of Article 36, and when the employer unilaterally terminates the labor contract under the provisions of Article 38 of the Labor Code 2012.

Additionally, Clause 2 Article 48 of the Labor Code stipulates that the working period for calculating severance allowance is the total actual working time the employee has worked for the employer minus the time the employee participated in unemployment insurance and the time the employer has paid severance allowances. For each working year, the employee is entitled to a half-month salary allowance.

Unemployment Allowance

Unemployment allowance is paid by the Social Insurance agency to the employee upon termination of the labor contract, provided that the employee meets certain conditions stipulated in Article 49 of the Employment Law 2013:

- Submit a dossier for unemployment allowance within 3 months from the date of termination of the labor contract;- Unable to find a job within 15 days from the day of filing for the unemployment allowance;- Have paid unemployment insurance for at least 12 months within 24 months before the termination of the labor contract or working contract for the cases specified in points a and b, Clause 1, Article 43 of this Law; have paid unemployment insurance for at least 12 months within 36 months before terminating the labor contract for the case specified in point c, Clause 1, Article 43 of this Law.

The monthly unemployment allowance that the employee is entitled to is defined in Clause 1, Article 50 of the Employment Law 2013, which is 60% of the average monthly salary of the 6 consecutive months before unemployment.

The duration of receiving the unemployment allowance is calculated based on the number of months of unemployment insurance contribution, with 3 months of allowance for 12 to 36 months of contributions and an additional 1 month of allowance for every subsequent 12 months of contributions but not exceeding 12 months. The employee will stop receiving unemployment allowance once they find a job.

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