Levels of and responsibility to pay unemployment insurance premiums in Vietnam 2023

Levels of and responsibility to pay unemployment insurance premiums in Vietnam 2023 (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Levels of and responsibility to pay unemployment insurance premiums in Vietnam 2023

According to Clause 1, Article 57 of the Law on Employment 2013, the levels of and responsibility to pay unemployment insurance premiums are specified as follows:

- Workers shall pay unemployment insurance premiums equal to 1% of their monthly wage;

- Employers shall pay unemployment insurance premiums equal to 1% of the monthly wage fund of the workers currently participating in unemployment insurance;

- The State shall provide at most 1% of the monthly wage fund from the central budget as support for payment of unemployment insurance premiums of workers currently participating in unemployment insurance.

2. Sources and use of, the Unemployment Insurance Fund in Vietnam

Sources and use of, the Unemployment Insurance Fund according to Clauses 2 and 3, Article 57 of the Law on Employment 2013 are as follows:

- Sources forming the Unemployment Insurance Fund include:

+ Contributions and support specified in Section 1;

+ Profits from the Fund’s investment activities;

+ Other lawful revenues.

- The Unemployment Insurance Fund must be used for:

+ Paying unemployment allowance;

+ Supporting training and retraining activities to improve occupational skills qualifications for job maintenance for workers;

+ Supporting vocational training;

+ Supporting job counseling and recommendation;

+ Paying health insurance premiums for workers on unemployment allowance;

+ Paying expenses for unemployment insurance management in accordance with the Law on Social Insurance;

+ Making investment for preservation and growth of the Fund.

3. Wages on which unemployment insurance premiums are based in Vietnam

According to Article 58 of the Law on Employment 2013, the wages on which unemployment insurance premiums are based are as follows:

- For workers who receive wages under the State-prescribed regime, the monthly wage on which unemployment insurance premiums are based is the monthly wage on which compulsory social insurance premiums are based under the Law on Social Insurance.

In case the monthly wage on which unemployment insurance premiums are based is higher than the twenty months’ region-based basic wage, the monthly wage on which unemployment insurance premiums will be equal to the twenty months’ region-based basic wage at the time of payment of unemployment insurance premiums.

- For workers paying unemployment insurance premiums under the wage regime decided by employers, the monthly wage on which unemployment insurance premiums are based is the monthly wage on which compulsory social insurance premiums are based under the Law on Social Insurance.

In case the monthly wage on which unemployment insurance premiums are based is higher than the twenty months’ region-based minimum wage, the monthly wage on which unemployment insurance premiums are based will be equal to the twenty months’ region-based minimum wage as prescribed by the Labor Code at the time of payment of unemployment insurance premiums.

4. Regulations on management of the Unemployment Insurance Fund in Vietnam

Regulations on management of the Unemployment Insurance Fund under Article 59 of the Law on Employment 2013 are as follows:

- The Unemployment Insurance Fund may apply independent cost-accounting. Social insurance organizations shall collect, spend, manage and use the Unemployment Insurance Fund.

- The Unemployment Insurance Fund’s investment activities must ensure safety, transparency, efficiency, and capital retrieval when necessary, through:

+ Buying bonds and bills of the State and bonds of commercial banks with over 50% of charter capital owned by the State;

+ Making investment in important projects under the Prime Minister’s decisions;

+ Providing loans for the state budget, the Vietnam Development Bank, the Vietnam Bank for Social Policies, and commercial banks with over 50% of charter capital owned by the State.

- The Government shall detail the percentages of state budget support; the management and use of the Fund; and the implementation of unemployment insurance.

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