UNEMPLOYMENT INSURANCE 2019

I. Legal basis:

            Law on employment No: 38/2013/QH13 of the National Assembly of the Socialist Republic of Vietnam, issued on November 16, 2013 (“2013 Employment Law”)

II. Content:

1. What is unemployment insurance?

In difficult economic times, unemployment insurance is considered a life buoy to solve many difficulties for workers.

Unemployment insurance means a scheme aiming to compensate part of income of a worker when he/she becomes unemployed, support him/her to receive vocational training, maintain employment, or seek employment, on the basis of making contributions to the Unemployment Insurance Fund. (clause 4, Article 3 of the 2013 Employment Law)

2. Participants in unemployment insurance:

Under Article 43 of the 2013 Employment Law, both workers and employers are obliged for participating in unemployment insurance.

Workers who are currently on pension or doing housework are not required to participate in unemployment insurance.

3. Conditions for unemployment insurance:

Article 49 of the 2013 Employment Law states that a worker who currently pays unemployment insurance premiums may receive unemployment allowance when fully meeting the following conditions:

“1. Terminating the labor contract or working contract, except the following cases:

a/ He/she unilaterally terminates the labor contract or working contract in contravention of law;

b/ He/she receives monthly pension or working capacity loss allowance.

2. Having paid unemployment insurance premiums for at least full 12 months within 24 months before terminating the labor contract or working contract, for the case specified at Points a and b, Clause 1, Article 43 of this Law; or having paid unemployment insurance premiums for at least full 12 months within 36 months before terminating the labor contract, for the case specified at Point c, Clause 1, Article 43 of this Law.

3. Having submitted a dossier for receipt of unemployment allowance to an employment service center under Clause 1, Article 46 of this Law.

4. Having not yet found any job after 15 days from the date of submission of the dossier for receipt of unemployment allowance, except the following cases:

a/ He/she performs the military or public security obligation;

b/ He/she attends a training course of full 12 months or longer;

c/ He/she serves a decision on application of the measure to send him/her to a reformatory, compulsory education institution or compulsory detoxification establishment;

d/ He/she is kept in temporary detention or serves a prison sentence;

dd/ He/she goes abroad for settlement or as guest worker;

e/ He/she dies.”

4. Levels of contribution

The levels of and responsibility to pay unemployment insurance premiums are specified as follows: (Article 57 of 2013 Employment Law)

- 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;

5. Levels, duration and time of receipt of unemployment allowance

a. The monthly unemployment allowance level equals 60% of the average monthly wage of 6 consecutive months before the worker becomes unemployed on which unemployment insurance premiums are based, but must not exceed 5 times the basic wage level, for workers receiving wages under the State-prescribed regime, or must not exceed 5 times the region-based minimum wage level under the Labor Code, for workers who pay unemployment insurance premiums under the wage regime decided by employers at the time of termination of the labor contract or working contract.

b. The duration of unemployment allowance receipt is based on the number of months of payment of unemployment insurance premiums. 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.

c. The time for unemployment allowance receipt is counted from the 16 th day after the date of submission of a complete dossier for receipt of unemployment allowance as specified in Clause 1, Article 46 of this Law.