Vietnam Issues Latest Incentives for Businesses and Employees
On July 1, 2021, the government has unveiled several financial packages to employers and employees affected by the fourth wave of COVID-19, Under Resolution 68/NQ-CP (Resolution 68).
Resolution 68 was issued and became effective on July 1, 2021, announcing support policies for employers and employees facing challenges due to the pandemic with a support package of US$1.13 billion (VND 26 trillion).
Support for employers
From July 1, 2021, to June 30, 2022
Mai Quoc Hung, Associate for Dezan Shira & Associates, HR and Payroll Ho Chi Minh Office notes that there are several benefits to businesses and employees alike. For example, employers are now eligible for a reduced premium rate of 0 percent (currently 0.5 percent) to the insurance fund of occupational accident and disease.
Employers and employees are entitled to suspend contributing to the pension/retirement and survivorship fund for six months starting from the month the dossier is submitted if the company/offices meet two requirements:
- Have fully paid the SI contribution or have suspended the contribution of insurance fund of occupational accident and disease until April 2021; and
- Have had to reduce the number of employees paying social insurance by at least 15 percent compared to April 2021.
After the suspension period, employers and employees are expected to continue making contributions to the fund and compensate for the suspension period. However, the compensation is not subject to late payment interest.
Employers are also entitled to financial support for training and improving vocational skills for employees using the unemployment insurance fund. The maximum value is set at VND 1,500,000 (US$65) per employee per month with a maximum duration of six months. A request document must be submitted to the relevant authorities between July 1, 2022, and June 30, 2022. However, they must meet the following conditions:
- Contribute in full to unemployment insurance for 12 months;
- Their revenue of the previous quarter must have decreased by 10 percent or more compared to the same period in 2019 or 2020; and
- Have a plan or cooperate with a vocational education institution on training and improving vocation skills and qualifications to maintain jobs.
Support package for employees
Employees who take unpaid leave or their work contracts are suspended due to the pandemic are entitled to a one-time support of VND 1,855,000 (US$80) per person. The period of suspension or unpaid leave must be at least 15 continuous days to less than one month between May 1, 2021, and December 31, 2021 period and employees must be contributing to the social insurance of the month before starting the work suspension.Employees that are out of work (take unpaid leave or their work contract is suspended) for more than a month will be entitled to VND 3,710,000 (US$161).
This applies to employees working at enterprises, cooperatives, public business units, and educational institutions.
Employees that cannot work due to being in medical isolation or in blockaded areas for more than 14 days are also entitled to a one-time payment of VND 1,000,000 (US$43) provided they have been contributing to social insurance.
Employees whose labor contracts were terminated and are not eligible for unemployment allowance between May 1, 2021, to December 31, 2021, due to the pandemic will be entitled to a one-time payment of VND 3,710,000 (US$161) provided they were contributing to social insurance.
In addition, employees that are pregnant are eligible to receive VND 1,000,000 (US$43); those taking care and raising children under 6 years of age are eligible for an additional VND 1,000,000 (US$43) per child.
People that undergo treatment for COVID-19 from April 27, 2021, to December 31, 2021, are eligible for a meal allowance of VND 80,000 (US$3) per day for a maximum of 45 days as well as individuals that have to undergo treatment as per government or health authorities.
People that undergo isolation (F1) from April 27, 2021, to December 31, 2021, are eligible for a meal allowance of VND 80,000 (US$3) per day for a maximum of 21 days.
Support for other jobs
Individuals working as art directors, actors, painters, and tour guides that have had to suspend operations for more than 15 days between May 1, 2021, to December 31, 2021, are eligible for a one-time payment of VND 3,710,000 (US$161).
Employees without labor contract or self-employed
This will depend on each provincial authority or city; however, the support will not be lower than VND 1,500,000 (US$65) per person for one time or VND 50,000 (US$2) per person/per day based on the actual number of suspended days.
Business households with a registration certificate and tax registration that have had to cease operations for 15 continuous days between May 1, 2021, to December 31, 2021, are entitled to one-time support of VND 3,000,000 (US$130)
In addition, the Ministry of Finance in June issued Circular no 47/2021/TT-BTC (Circular 47) reducing fees charges for several business lines affected by the pandemic from July 1, 2021, to December 31, 2021. Industries that can benefit include, banks, construction activities, tour businesses, water resources, securities, commercial publications, healthcare, automobiles, and so on.
Further, most banks have agreed to cut the lending rate for businesses affected by the pandemic.
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