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When employees do not have a job while participating in the social insurance and unemployment insurance regimes, they will receive unemployment benefits for a specified period of time as support to cover their expenses. So, what are the regulations on payment and enjoyment of unemployment insurance in Vietnam?
Both employees and employers are required to participate in unemployment insurance based on Article 43 of the Employment Law 2013.
In addition, Article 57 of the Employment Law 2013 also stipulates that the monthly unemployment insurance contribution rate of employees and employers is 1% of the monthly salary paid into the unemployment insurance fund by the employee and 1% of the monthly salary fund of employees who are participating in unemployment insurance by the employer.
The employee’s monthly salary on which unemployment insurance contributions are based is the salary used as the basis for his/her social insurance contributions payment. Regarding unemployment insurance contributions, employees and employers should pay attention to the minimum and maximum contributions.
Specifically, the minimum contribution to the social insurance regime as well as the unemployment insurance regime will depend on the regional minimum wage.
In which, the minimum contribution rate = 1% x Regional minimum salary
Maximum contribution rate = 1% x 20 x Regional minimum wage = 0.2 x Regional minimum wage
Unemployment benefits
According to Article 50 of the 2013 Employment Law, the employee’s unemployment benefit allowance will be 60% of the average monthly salary on which unemployment insurance contributions are based for the 06 consecutive months before unemployment.
Accordingly, employees working at enterprises in region 1 will receive a maximum unemployment allowance of 23.4 million VND.
Because employees can enjoy unemployment benefits for a maximum period of 12 months, from July 2022, employees can enjoy maximum unemployment benefits for a maximum period of 280.8 million VND.
Note on unemployment insurance contributions during the Covid-19 pandemic
During the period from July 1, 2022, to the end of September 30, 2022, based on the Government’s business support policy to overcome difficulties caused by the Covid-19 pandemic (resolution No. 116/NQ- CP), the employer will not have to pay 1% for the unemployment insurance fund.
Specifically, according to Resolution 116, employers will be supported through the reduction of the contribution rate from 1% to 0% of the monthly salary fund of employees who are subject to unemployment insurance for 12 months, from October 1, 2021, to the end of September 30, 2022
Employees are not eligible for support from this policy, so Vietnamese employees still have to pay 1% to the unemployment insurance fund with a total contribution of 10.5% of their salary to the social insurance fund.
From October 1, 2022, onward, the employer will return to paying 1% for the unemployment insurance fund (the total is 21.5% of the salary paid to the social insurance fund for employers).
ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.
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