The regulations on employment, salaries, and social insurance policies may not be unfamiliar to employees, as these are issues we are always concerned about. Below, Lawnet would like to highlight some basic legal provisions that employees in Vietnam need to know about this field.
Article table of contents
1. From January 1, 2016, salary payment in Vietnam will not necessarily occur within the month.
This is stipulated in Circular 47/2015/TT-BLDTBXH guiding labor contracts, labor discipline, and material responsibilities. This Circular has amended the salary payment time for employees as follows: “Employees receiving monthly salaries shall be paid once a month or semi-monthly and at the salary payment time.”
Thus, according to Circular 47/2015/TT-BLDTBXH, the salary payment time will be agreed upon by both parties, not necessarily within the working month as previously stipulated in Circular 23/2015/TT-BLDTBXH. This ensures the employees’ benefits and the business production pace.
2. From January 1, 2018, social insurance contributions in Vietnam will be calculated based on salary, allowances, and other additional items recorded in the labor contract.
According to Decree 115/2015/ND-CP, detailing certain articles of the Social Insurance Law on compulsory social insurance for officials and public employees, and Vietnamese employees working under labor contracts: “From January 1, 2018 onwards, the monthly salary for social insurance contributions includes the salary, salary allowance, and other additional items as prescribed by labor law recorded in the labor contract.” This regulation helps employees gain more benefits for pensions as well as other policies like labor accidents and maternity.
This content is also detailed in Article 30 of Circular 59/2015/TT-BLDTBXH:
| Article 30. Monthly Salary for Compulsory Social Insurance Contributions The monthly salary for social insurance contributions for employees with policies on wages decided by the employer is regulated as follows: … 2. From January 1, 2018, the monthly salary for social insurance contributions includes the salary, salary allowances as prescribed by Clause 1 of this Article, and other additional items as per Point a Clause 3 Article 4 of Circular 47/2015/TT-BLDTBXH. |
Other additional items included in the salary for social insurance contributions under this regulation include specific monetary amounts agreed upon in the labor contract and paid regularly in each salary period.
3. Regional minimum wage increased by an average of 6.5% from January 1, 2018
Decree 141/2017/ND-CP on regional minimum wages for employees stipulates that from January 1, 2018, the regional minimum wages across all areas increased by an average of 6.5%. Specifically, the 4 regions will have new minimum wages as follows:
- Region I: 3,980,000 VND/month (up 6.1% compared to 2017);
- Region II: 3,530,000 VND/month (up 6.3% compared to 2017);
- Region III: 2,090,000 VND/month (up 6.6% compared to 2017);
- Region IV: 2,760,000 VND/month (up 7.0% compared to 2017).
Additionally, Decree 141/2017/ND-CP clarifies that businesses operating in any given area must apply the regional minimum wage stipulated for that area. If a business has units or branches operating in areas with different regional minimum wages, each unit or branch must apply the regional minimum wage stipulated for its respective area.
| Article 4. Principles for Applying Regional Minimum Wages by Location 1. Businesses operating in any given area must apply the regional minimum wages stipulated for that area. If a business has units or branches operating in areas with different regional minimum wages, each unit or branch must apply the regional minimum wage stipulated for its respective area. 2. Businesses operating in industrial zones and export processing zones located in areas with different regional minimum wages must apply the highest regional minimum wage. |
4. Employees going abroad for labor export are eligible for compulsory social insurance.
Decree 115/2015/ND-CP guides the Law on Social Insurance regarding compulsory social insurance with specific provisions on certain policies of compulsory social insurance:
| Article 2. Subjects of Application … 2. Individuals working abroad under contracts as stipulated in the Law on Vietnamese Nationals Working Abroad under Contracts are subject to compulsory social insurance according to this Decree, applied to the following contracts: a) Contracts to send employees to work abroad with enterprises providing services to send employees to work abroad or public non-business agencies that are allowed to send employees to work abroad; b) Contracts to send employees to work abroad with enterprises winning bids, receiving contracts, or organizations/individuals investing abroad and sending employees to work abroad; c) Contracts to send employees to work abroad for skill enhancement internships with enterprises sending employees for skill enhancement internships; d) Personal contracts. |
Thus, according to this regulation, employees going abroad for labor export under contracts are also subject to compulsory social insurance participation.
5. Changes in pension calculation
The Law on Social Insurance 2014 effective from January 1, 2016, stipulates that the monthly pension rate for employees eligible for pensions under Article 54 of the Social Insurance Law 2014 will be calculated as follows in Article 56 of the Social Insurance Law 2014 and Article 7 of Decree 115/2015/ND-CP:
| Article 7. Monthly Pension Rate The monthly pension rate specified in Article 56 of the Social Insurance Law is as follows: 1. The monthly pension of an employee is calculated by multiplying the monthly pension rate by the average monthly salary on which social insurance contributions are based. 2. The monthly pension rate for employees eligible for pensions under Article 54 of the Social Insurance Law is calculated as follows: a) For employees retiring between January 1, 2016, and December 31, 2017, the monthly pension rate is 45% for 15 years of social insurance contributions. Beyond this, each additional year counts for 2% for men and 3% for women, up to a maximum of 75%. b) For female employees retiring from January 1, 2018, onward, the monthly pension rate is 45% for 15 years of social insurance contributions. Beyond this, each additional year counts for 2%, up to a maximum of 75%. c) For male employees retiring from January 1, 2018, onward, the monthly pension rate is 45% for the number of years of social insurance contributions according to the table below. Beyond this, each additional year counts for 2%, up to a maximum of 75%. |
The age to calculate the number of retirement years before the statutory age for reducing the pension rate is determined as follows:
- For employees working under normal conditions, the retirement age is 60 for men and 55 for women;
- For employees doing heavy, hazardous, dangerous, or particularly heavy, hazardous, dangerous jobs or working in areas with a regional allowance coefficient of 0.7 or higher, the retirement age is 55 for men and 50 for women;
- For coal miners working underground, the retirement age is 50.
Note:
- The monthly pension rate for employees eligible under Article 54 of the Social Insurance Law 2014 and Article 16 of Circular 59/2015/TT-BLDTBXH is calculated according to the above regulations. For each year of early retirement, the pension rate is reduced by 2%;
- When calculating the pension rate, if the social insurance contribution period has odd months, 01 to 06 months are counted as half a year; 07 to 11 months are counted as one year.
6. Female employees in surrogate pregnancy are entitled to maternity benefits
This significant content is provided in Decree 115/2015/ND-CP guiding the Social Insurance Law 2014. The Decree stipulates maternity benefits for female employees in surrogate pregnancies as follows:
| Article 3. Maternity Benefits for Female Employees in Surrogate Pregnancy Maternity benefits for female employees in surrogate pregnancy as prescribed in Clause 1 Article 35 of the Social Insurance Law 2014 are as follows: 1. Female employees in surrogate pregnancy paying compulsory social insurance into the illness and maternity fund are entitled to leave for prenatal check-ups five times, one day each time. If they live far from the medical examination, treatment facility or have medical conditions or abnormal fetal conditions, they are entitled to two days for each check-up. The maternity leave stipulated in this Clause is calculated on working days excluding holidays, Tet, and weekends. |
Additionally, Decree 115/2015/ND-CP stipulates that female employees in surrogate pregnancy, while paying compulsory social insurance into the illness and maternity fund, are entitled to leave for maternity benefits when experiencing miscarriage, abortion, stillbirth, or pathological abortion as prescribed by the competent medical examination and treatment facility. The maximum leave duration is as follows:
- No more than 10 days if the fetus is under 5 weeks old;
- 20 days if the fetus is from 5 weeks to under 13 weeks old;
- 40 days if the fetus is from 13 weeks to under 25 weeks old;
- 50 days if the fetus is 25 weeks old or more.
The maternity leave duration stipulated above includes holidays, Tet, and weekends.
7. People's Artists, Meritorious Artists receive hardship allowances
Decree 109/2015/ND-CP on support for People's Artists, Meritorious Artists with low income and difficult circumstances was issued on October 28, 2015.
The subjects applied are People's Artists, Meritorious Artists honored by the state, and whose household average monthly income is below the statutory pay rate as stipulated by the Government of Vietnam.
The specific support levels are as follows:
| Article 3. Monthly Living Allowance 1. 1,000,000 VND applied to subjects specified in Points a, b, and c Clause 1 Article 2 of Decree 109/2015/ND-CP, with average monthly household income below 50% of the statutory pay rate. 2. 850,000 VND applied to: a) Subjects specified in Points a, b, and c Clause 1 Article 2 of Decree 109/2015/ND-CP, with average household income from 50% of the statutory pay rate to below the statutory pay rate; b) Subjects specified in Point d Clause 1 Article 2 of Decree 109/2015/ND-CP, with average household income below 50% of the statutory pay rate. 3. 700,000 VND applied to subjects specified in Point d Clause 1 Article 2 of Decree 109/2015/ND-CP, with average household income from 50% of the statutory pay rate to below the statutory pay rate. |
Additionally, the beneficiaries of the allowance are also entitled to policies on health insurance and funeral cost support.
8. Vocational training under 3 months, with support up to 6 million VND
Decision 46/2015/QD-TTg issued by the Prime Minister on September 28, 2015, stipulates support for vocational training for employees participating in vocational programs at primary level or under 3 months. The maximum support is 6 million VND, with an additional 200,000 VND/course if distant from home by 15 km.
Decision 46/2015/QD-TTg adjusts for women, rural employees, and disabled people participating in primary level vocational programs or training under 3 months. Priority is given to disabled persons and those entitled to preferential policies, people with meritorious services to the revolution, ethnic minorities, people from poor households, near-poor households, households with agricultural or business land revoked, female employees losing jobs, and fishermen; related agencies, organizations, and individuals.
Support levels for training costs set out in Article 4 of Decision 46/2015/QD-TTg and Clause 1 Article 7 of Circular 152/2016/TT-BTC are as follows:
- Up to 6 million VND/person/course: For disabled individuals;
- Up to 4 million VND/person/course: For people from poor ethnic minority households; people from poor households in particularly difficult communes, villages, and hamlets as prescribed by the Prime Minister;
- Up to 3 million VND/person/course: For ethnic minorities, people entitled to preferential policies, people with meritorious services to the revolution, poor individuals, households with agricultural or business land revoked, female employees losing jobs, and fishermen;
- Up to 2.5 million VND/person/course: For near-poor households;
- Up to 2 million VND/person/course: For women and rural employees not falling into the above categories.
Note: In the case where a learner simultaneously belongs to multiple categories mentioned above, only the highest training cost support level will be granted.
9. Special Allowances for Teachers at Public Vocational Education Institutions
Decree 113/2015/ND-CP stipulates special allowances, preferential allowances, responsibility allowances, and hazardous, harmful, and dangerous allowances for teachers in public vocational education institutions.
Accordingly:
- Teachers specializing in teaching disabled individuals in public vocational education institutions for the disabled or in separate classes for the disabled within public vocational education institutions are entitled to: a responsibility allowance of 0.3 compared to the statutory pay rate and a preferential teaching allowance for the disabled of 70% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any);- Teachers who do not specialize in teaching disabled individuals but teach in separate classes for the disabled within public vocational education institutions are entitled to: a responsibility allowance of 0.3 compared to the statutory pay rate and a preferential teaching allowance for the disabled of 40% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any).
Additionally, Decree 113/2015/ND-CP stipulates that teachers specializing in teaching disabled individuals in inclusive classes for the disabled within public vocational education institutions are entitled to a responsibility allowance of 0.2 compared to the statutory pay rate and preferential teaching allowances for the disabled as follows:
| Article 8. Allowance Levels … 3. Teachers as stipulated in Clause 3, Article 7 of this Decree are entitled to a responsibility allowance of 0.2 compared to the statutory pay rate and preferential teaching allowances for the disabled as follows: a) 35% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 5% to less than 10% disabled students; b) 40% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 10% to less than 20% disabled students; c) 45% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 20% to less than 30% disabled students; d) 50% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 30% to less than 40% disabled students; đ) 55% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 40% to less than 50% disabled students; e) 60% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 50% to less than 60% disabled students; g) 65% of the current salary plus leadership position allowances and seniority allowance beyond the limit (if any) applicable to inclusive classes having from 60% to less than 70% disabled students. … |
The Decree also explicitly stipulates the allowance levels for teachers who do not specialize in teaching disabled individuals but teach in inclusive classes for the disabled within public vocational education institutions in Clause 4, Article 8. The calculation and eligibility for responsibility allowances and preferential allowances are detailed in Circular 22/2017/TT-BLDTBXH.
10. Regional Minimum Wage Level for 2019, Increased by 5.3% Compared to 2018
This is the content unanimously agreed upon by the National Wage Council in Draft Decree stipulating the regional minimum wage level for employees working under labor contracts. The Decree adjusts the increase in the regional minimum wage for 2019 by 160,000 VND to 200,000 VND compared to the regional minimum wage in 2018.
Thus, from January 1, 2019, the regional minimum wage applicable to employees working in enterprises is stipulated as follows:
- For enterprises operating in Region I: 4,180,000 VND/month (currently 3,980,000 VND/month), an increase of 200,000 VND/month (5.0%);
- For enterprises operating in Region II: 3,710,000 VND/month (currently 3,530,000 VND/month), an increase of 180,000 VND/month (5.1%);
- For enterprises operating in Region III: 3,250,000 VND/month (currently 3,090,000 VND/month), an increase of 160,000 VND/month (5.2%);
- For enterprises operating in Region IV: 2,920,000 VND/month (currently 2,760,000 VND/month), an increase of 160,000 VND/month (5.8%).
- Key word:
- labor
- salaries
- social insurance
- Vietnam
