Vietnam’s new regulations on unemployment insurance

By Tuan Minh 14:32, 2015/01/08

Expanding the list of participants, amending provisions on conditions to enjoy unemployment allowance and on the level of such allowance, etc., are some of the significant adjustments on the policy of unemployment insurance stipulated in Law on Employment (2013), which will be brought into effect from January 1, 2015.

Benefits of unemployment insurance
Apart from the benefits when participating in unemployment insurance according to current provisions such as unemployment allowance, vocational training support and job search assistance, Law on Employment has been amended with the regime of support for training, retraining, improving qualifications of occupational skills to maintenance employment for workers.

Wages on which unemployment insurance premiums are based
According to new regulations, the monthly wage, based on which unemployment insurance premiums are calculated, is the wage on which compulsory social insurance premiums are based under the Law on Social Insurance. In the event where the monthly wage, on which unemployment insurance premiums are based, is higher than the 20 months’ regional minimum wage, the 20 months’ regional minimum wage will be applied in accordance with the provisions at the time of payment of unemployment insurance premiums, unlike current provisions which base on the common minimum wage.

Level and duration of unemployment allowance
1. Based on new regulations, while monthly unemployment allowance level of the employee equals 60% of the average monthly wage of 6 consecutive months before the worker becomes unemployed but “must not exceed 5 times the region-based minimum wage level in accordance with the provisions at the time of termination of the labor contract”, current provisions do not regulate about the limit of maximum level.
2. The duration of unemployment allowance entitlement is based on the number of months of payment of unemployment insurance premiums. Accordingly, this duration is 3 months if the period of payment of unemployment insurance premiums is between full 12 months and full 36 months, which is added with 1 month for each additional period of payment of full 12 months, but must not exceed 12 months.

Termination of unemployment allowance
Basically, the cases of termination of unemployment allowance under the Law on Employment inherit from the current provisions of Law on Social Insurance and supplemented with the following cases: the employee performs public security service obligation; goes abroad under a labor contract; attends a training course of full 12 months or longer; is administratively sanctioned for violations of the law on unemployment insurance; is declared by a court as missing; is kept in temporary detention. Workers, who stop receiving unemployment allowance in cases such as finding a new job or performing military obligation, may have the period of payment of unemployment insurance premiums reserved for calculating the subsequent duration of receipt of unemployment allowance when they fully satisfy certain conditions. While under the current regulations, the employee will be entitled to onetime payment of the remaining value of unemployment allowance.

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