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The current unemployment benefits policy in Vietnam has several shortcomings, making it inadequate for societal changes and failing to ensure workers’ rights during difficult times. Therefore, the Vietnam General Confederation of Labor has recently proposed several amendments to the unemployment benefits regulations in Vietnam.
The Vietnam General Confederation of Labor suggests increasing the unemployment benefit from 60% to 75% and eliminating the maximum duration of 12 months, instead basing it on the duration of insurance contributions.
Currently, the Ministry of Labor, Invalids and Social Affairs proposes in the draft amended Employment Law that the monthly unemployment benefit be set at 60% of the average monthly salary on which unemployment insurance contributions were based during the six months preceding job loss, with a maximum of five times the regional minimum wage and a maximum benefit duration of 12 months.
However, the Vietnam General Confederation of Labor proposes increasing this to 75% for each year of unemployment insurance contributions.
The Confederation also recommends removing the 12-month maximum benefit duration, replacing it with a duration that corresponds to the time of insurance contributions. This proposal has gained support from many workers, as the current 12-month cap on unemployment benefits has caused significant difficulties.
Previously, most workers were unaware of the 12-month benefit cap and did not make specific plans to maximize their benefits. Many workers, who worked continuously for decades without taking breaks, believed they would receive unemployment benefits equivalent to one month for each year of participation without a 12-month cap.
This has caused significant dissatisfaction in society because it means that a worker who worked continuously for 40 years and then retired to receive benefits is not treated differently from a worker who worked for 12 years and then retired to receive benefits.
A worker who worked for 12 years and then retired to receive benefits could even do so twice more, each time working for 12 years and then taking a full year off to receive benefits.
Such plans create instability and disruptions in the workforce and increase the rate at which workers withdraw their social insurance in a lump sum, as they lose trust in the transparency of social insurance and unemployment insurance policies in Vietnam.
In addition to the debate over benefit levels and duration, the Vietnam General Confederation of Labor also suggests reconsidering the policy that disqualifies workers from receiving unemployment benefits if they unilaterally terminate their contracts or are dismissed. This severely affects workers’ rights.
In reality, many companies create pressures leading to workers voluntarily resigning or unfairly dismissing them, not following legal procedures. Workers lose their income and are not eligible for unemployment benefits, which is unreasonable, meaning the time they have contributed to unemployment insurance is not recognized, despite contributing 1% of their monthly salary and 1% from the employer.
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