The Resolution 154/NQ-CP 2020 2020 of the Government of Vietnam, which has just been issued, amends and supplements the conditions for employers (NSDLĐ) to borrow without collateral to pay salaries during work stoppages for employees (NLĐ) as previously stipulated in Resolution 42/NQ-CP.
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Conditions for employers to obtain unsecured loans to pay wages dring work suspension for employees (Illustration)
Previously, under Resolution 42/NQ-CP on measures to support people facing difficulties due to the Covid-19 pandemic issued by the Government of Vietnam, it was stipulated that employers are allowed to borrow without collateral up to 50% of the regional minimum wage for each employee based on the actual wage payment period but not exceeding 3 months at a 0% interest rate with the conditions:
- The employer has financial difficulties; and
- The employer has paid at least 50% of the furloughed wages to employees according to Clause 3, Article 98 of the Labor Code within the period from April to June 2020.
The maximum loan period was 12 months at the Social Policy Bank. This loan is used to pay the remaining wages and is disbursed directly on a monthly basis to furloughed employees.
However, under Resolution 154/NQ-CP, this provision has been amended and supplemented as follows:
Employers with revenue in the first quarter of 2020 decreasing by 20% or more compared to the fourth quarter of 2019 or revenue of the quarter immediately preceding the proposed period for loan benefits decreasing by 20% or more compared to the same period of 2019 can borrow without collateral up to 50% of the regional minimum wage to pay furloughed wages to employees as stipulated in Clause 3, Article 98 of the Labor Code from April to December 2020 based on the actual wage payment period but not exceeding 3 months at a 0% interest rate, with a maximum loan period of 12 months at the Social Policy Bank. Employers directly prepare the loan application, self-declare, and are responsible before the law for the accuracy and truthfulness of the number of furloughed employees, revenue data meeting loan conditions, and send it to the Social Policy Bank to receive the support policy as stipulated.
Based on this provision, employers can borrow without collateral up to 50% of the regional minimum wage to pay furloughed wages to employees as stipulated in Clause 3, Article 98 of the Labor Code from April to December 2020 based on the actual wage payment period but not exceeding 3 months at a 0% interest rate when:
- The employer's revenue in the first quarter of 2020 decreases by 20% or more compared to the fourth quarter of 2019; or
- The revenue of the quarter immediately preceding the proposed period for loan benefits decreases by 20% or more compared to the same period of 2019.
The loan period for employers remains a maximum of 12 months at the Social Policy Bank.
Resolution 154/NQ-CP also includes additional stipulations that employers directly prepare the loan application, self-declare, and are responsible before the law for the accuracy and truthfulness of the number of furloughed employees, revenue data meeting loan conditions, and send it to the Social Policy Bank to receive the support policy as stipulated.
Thus, the conditions for employers to get loans without collateral to pay furloughed wages to employees are more specifically defined, determined by whether revenue in the first quarter of 2020 decreases by 20% or more compared to the fourth quarter of 2019, or revenue of the quarter immediately preceding the proposed period decreases by 20% or more compared to the same period of 2019, instead of the general provision of having financial difficulties as in Resolution 42/NQ-CP. At the same time, Resolution 154/NQ-CP has removed the condition that employers must have paid at least 50% of the furloughed wages to employees to be eligible for loans without collateral at a 0% interest rate.
Thuy Tram
- Key word:
- Resolution 154/NQ-CP
