Vietnam: Salary for calculation of benefits for redundant employees in State-owned companies

Vietnam: Salary for calculation of benefits for redundant employees in State-owned companies
Trần Thanh Rin

On November 29, 2022, the Government of Vietnam issued Decree 97/2022/ND-CP stipulating benefits for redundant employees when transferring ownership or rearranging one-member limited liability companies in which 100% of charter capital is held by the State.

The salary of redundant employees, as a basis for calculating the regimes prescribed in Vietnam's Decree 97/2022/ND-CP, is determined as follows:

- The salary used as the basis for calculating the allowance is the average monthly salary on which social insurance premiums are based for the last 5 years before retiring.

- The average monthly minimum wage is determined by the average of all regional minimum wages prescribed by the government of Vietnam at the time of termination of employment.

- The salary used as the basis for calculating the job loss allowance, severance allowance, and the support amount, including salary, salary allowance, and other additional amounts for the calculation of job loss allowance, unemployment benefit, and granting severance, is written in the contract according to the provisions of Article 21 of Vietnam's Labor Code 2019 and guiding documents.

Vietnam's Decree 97/2022/ND-CP takes effect on January 15, 2023.

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