Unemployment insurance benefits in Vietnam

In the period of economic difficulties, many businesses have implemented policies to cut staff, causing many workers to fall into unemployment. In this case, workers wonder how to receive unemployment insurance. To answer clients’ questions, Viet An Law Firm provides an article on current unemployment insurance benefits in Vietnam below.

Legal basis

• Employment Law 2013;
• Decree 28/2015/ND-CP guiding the Law on Employment and unemployment insurance, as amended and supplemented by Decree 30/2016/ND-CP and Decree 61/2020/ND-CP ;
• Circular 28/2015/TT-BLDTBXH guiding the implementation of Article 52 of the Employment Law and several articles of Decree No. 28/2015/ND-CP dated March 12, 2015, of the government detailing the implementation of several articles of the Employment Law on unemployment insurance.

What is the unemployment benefit?

Pursuant to the provisions of Clause 4, Article 3 of the 2013 Employment Law, the unemployment insurance regime is a regime aimed at compensating part of an employee’s income when losing a job, supporting vocational training, finding a new job based on salary deductions paid into the unemployment insurance fund during they worked.

The Employment Law stipulates 4 unemployment insurance regimes including:

• Unemployment benefits.
• Consulting support and job introduction.
• Vocational Training Support.
• Support training, fostering, and improving vocational skills to maintain jobs for workers.

Accordingly, unemployment insurance is one of four unemployment insurance regimes. This is a subsidy deducted from the unemployment insurance fund to pay employees who lose their jobs based on the employee’s previous unemployment insurance payment process.

Conditions for receiving unemployment benefits

According to Article 49, Section 3 of the Employment Law 2013, employees will receive unemployment benefits when they fully meet the following conditions:

• The employee has terminated the labor contract or working contract with the employer, except in the cases that the employee unilaterally terminated the labor contract or working contract illegally; Received monthly pension and disability allowance;
• Employees have paid unemployment insurance for 12 months or more within 24 months before terminating the labor contract or employment contractindefinite term and definite term contracts;
• Have paid unemployment insurance for 12 months or more within 36 months before terminating a seasonal labor contract or a certain job with a term of 3 months to less than 12 months;
• Have applied for unemployment benefits at an employment service center established by the state management agency on employment within 03 months from the date of termination of the labor contract or working contract.
• Have not found a job after 15 days from the date of applying for unemployment insurance, except for the following 06 cases: Performing military service or police service; Going to study for 12 months or more; Comply with the decision to apply the measure of sending to reformatories, compulsory education establishments, and compulsory detoxification establishments; Detained; serve a prison sentence; Settling abroad; go to work abroad under contract; Pass away.

Unemployment benefit rate

Pursuant to Clause 1, Article 8 of Circular 28/2015/TT-BLDTBXH and Clause 1, Article 50 of the Employment Law 2013, the formula for calculating unemployment benefits is determined as follows:

Unemployment benefit rate = 60% ( × ) average salary of 6 consecutive months of unemployment insurance payment before unemployment.

However, in case the employee has a period of interruption in paying unemployment insurance in the last months before unemployment, the 06 consecutive months used to calculate unemployment benefits are the average salary of 06 months of paying unemployment insurance before the employee terminates the labor contract according to the provisions of law.

For people implementing the salary regime prescribed by the State.

• The maximum level of unemployment benefits cannot exceed 5 times the base salary.

For those implementing the salary regime, the salary is decided by the employer.

• The maximum level of unemployment benefits must not exceed 5 times the regional minimum wage.

Application for unemployment benefits

Pursuant to the provisions of Article 16, Decree 28/2015/ND-CP on applications for unemployment benefits, employees need to prepare documents including:

• Social insurance book.
• A written form of unemployment benefit defined by the Minister of Labor, Invalids and Social Affairs.
• An original or certified true copy of one of the following documents certifying the termination of the labor contract or working contract:
  • The labor contract or working contract expired or terminated under its term;
  • The resignation decision;
  • The dismission decision;
  • Disciplinary decision on dismissal;
  • The written notice or agreement of termination of the labor contract or working contract.

However, it should be noted that employees who have a seasonal labor contract or a certain job with a term of 3 to less than 12 months (specified in Point c, Clause 1, Article 43 of the Employment Law 2013) participate in unemployment insurance must submit documents confirming the termination of the labor contract based on a season or a certain job.

Procedures for receiving unemployment benefits in Vietnam

The process of completing procedures for receiving unemployment benefits will include the following steps:

Step 1: Apply for unemployment insurance

Employees who have not had a job within 3 months from the date of termination of the labor contract or work contract and need to receive unemployment benefits must apply for unemployment benefits at the employment service center where workers want to receive unemployment benefits during administrative working hours (except holidays and days off).

In case the employee cannot apply, he or she can authorize another person to submit it or send the application by post. Employees in the following cases are authorized to others to submit the application or send the application by post:

• Sickness or maternity certified by a competent medical facility;
• Having an accident certified by traffic police or a competent medical facility;
• Fires, floods, earthquakes, tsunamis, enemy sabotages, and epidemics certified by the Chairman of the People’s Committee of the commune, ward, or town.

The date of applying for unemployment benefits in the above cases is the date the authorized person directly submits the application or the date recorded on the postmark in case of sending by post.

Step 2: Obtain results

After applying, the job introduction center is responsible for receiving, and checking the application, recording the appointment slip to return the results, and giving the ballot directly to the applicant or sending it by mail to the applicant through the post office. Accordingly, one of the following cases can occur:

• If the application does not comply with regulations, the employment service center must return it to the submitter and clearly state the reason. Based on the reason for returning the dossier, the employee will complete the dossier and resubmit it.
• If the application follows regulations, the employment service center is responsible for reviewing and submitting it to the Director of the Department of Labor, Invalids and Social Affairs to decide on the employee’s unemployment benefits within 20 working days from the date of receipt of complete documents according to regulations.

Step 3. Receive unemployment benefits payment

Employees receive unemployment benefits paid by social insurance organizations according to the instructions in Clause 2, Article 18, Decree 28/2015/ND-CP.

Step 4: Employees report monthly on their job search situation

To be able to receive unemployment benefits in the following months, employees need to report their job search status to the employment service center where the employee is receiving unemployment benefits, except in the following cases:

• Sick, maternity, or accident workers have a certificate from a competent medical examination and treatment facility according to the law on medical examination and treatment;
• Case of force majeure.

Some questions related to unemployment insurance benefits in Vietnam

How is the unemployment benefit period calculated?

Pursuant to Clause 2, Article 50 of the Employment Law 2013, the period of unemployment benefits is as follows:

• Employees who pay unemployment insurance for 12 to 36 months are entitled to 3 months of benefits.
• After that, for every additional 12 months of payment, you will receive an additional month of benefits but no more than 12 months.

What should I do if I have an accident and do not receive the decision to receive unemployment benefits on time?

Under Clause 3, Article 18 of Decree 28/2015/ND-CP:

After 02 working days from the date recorded in the appointment slip to return the results, if the employee does not come to receive the decision on unemployment benefits, he or she is considered not in need of unemployment benefits, except for the following: following cases:

• Sickness or maternity certified by a competent medical facility;
• Having an accident certified by traffic police or a competent medical facility;
• Fires, floods, earthquakes, tsunamis, enemy sabotages, and epidemics certified by the Chairman of the People’s Committee of the commune, ward, or town.

Clients need advice on unemployment insurance benefits in Vietnam, please get in touch with Viet An Law Firm – Tax Agent for the best support.