During the uncertain time due to the COVID-19 pandemic, some noteworthy support packages for employers and employees of the Government are made available pursuant to Resolution 68/NQ-CP of 1 July 2021 and Decision 23/2021/QD-TTg of 7 July 2021 (Guiding Documents). The Guiding Documents introduce 12 types of support packages provided by the Government to employees and employers seriously affected by the COVID-19 pandemic.

In this legal update, we only list 5 packages enterprises might be most interested in. It is important to note that qualification for a support package is subject to the conditions as set out under the Guiding Documents.

1. Suspension of Contributions to Retirement and Survivorship Fund

Employees and employers may suspend payments to the retirement and survivorship fund for 6 months as from the month the employer submits the application.

In case payment to the retirement and survivorship fund according to the 2020 resolutions of the Government had already been approved, the period of suspension of payment to the retirement and survivorship fund may be extended but not exceed 12 months.

2. Employees

2.1 Suspension Labour Contract or Unpaid Leave

For employees who suspend the performance of their labour contracts or take unpaid leaves the following funds will be available:

- VND 1,855,000 per person for a period between 15 consecutive days to less than 1 month;

- VND 3,710,000 per person for a period of 1 month or more;

- VND 1,000,000 per person additionally for a pregnant employee; and

- VND 1,000,000 per child under 6 years old additionally.

2.2 Cease of Employment

An employee who must cease employment would qualify for:

- VND 1,000,000 per person;

- VND 1,000,000 per person additionally for a pregnant employee; and

- VND 1,000,000 per child under 6 years old additionally.

2.3 Terminated Labour Contracts

An employee who has their labour contract terminated and is ineligible for unemployment payment would qualify for:

- VND 3,710,000 per person;

- VND 1,000,000 per person additionally for a pregnant employee; and

- VND 1,000,000 per child under 6 years old additionally.

Note that the additional payment per child under 6 years old in section 2.1-2.3 applies to an employee raising, having adopted children or taking care of children under the age of 6, and only 1 person in the family (father, mother or caretaker) could qualify.

3. Employer: Loans to Cover Wages for Employees

If employers continue paying wages, they can apply for a loan for payments of (i) work-ceasing wages, and (ii) wages during the production recovery period. The loan term is less than 12 months with an interest rate of 0%. The Bank for Social Policies will act as the lender.

The maximum loan amount will be based on the actual payment period but not exceeding 3 months and is equal to the regional minimum wage for the number of employees according to the actual payment period of work-ceasing wages or wages during production recovery period.

The last disbursement should be made on 5 April 2022 at the latest or when VND 7,500 billion refinanced by the State Bank of Vietnam is fully reimbursed, whichever comes first.

For more information, please contact:

An Tran / Senior Associate  an.tran@acsvlegal.com

Thien Pham / Junior Associate  thien.pham@acsvlegal.com