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Ho Chi Minh City Adopts Policies To Support Businesses And Employees Affected By The Covid-19 Pandemic

Ho Chi Minh City Adopts Policies To Support Businesses And Employees Affected By The Covid-19 Pandemic

“Owing to the situation of the Covid-19 pandemic and the implementation of The Government’s Directive No.16 from 0:00 am on 09/07/2021 throughout Ho Chi Minh City, only some essential business activities are allowed to operate. Thus, many businesses and employees have been suffering heavy losses. To support employees and businesses to overcome this difficulty, and to promote the prevention and control of epidemics, the Government has promptly issued Resolution No. 68/NQ-CP dated 01 July 2021 adopting some policies to support employees and employers facing difficulties due to the Covid-19 pandemic. This article shall provide information on the said policies related to employees and employers and explain the application of these policies in Ho Chi Minh City:”

No.PolicyContentDuration of applicationConditionNote
1.Reduction of insurance premiums for occupational accidents and occupational diseases

Employers can enforce the payment equal to 0% of the salary fund as a basis for payment of social insurance premiums to the Insurance Fund for occupational accidents and occupational diseases.

Employers should fund all the money reduced from the Insurance Fund for occupational accidents and diseases for employees to prevent the COVID-19 pandemic.

For 12 months (from July 1, 2021 to June 30, 2022)Employees are subject to the insurance regime of occupational accidents and occupational diseases

Currently, the written guidelines for implementation have not been issued. For more details please contact directly the office of Labor, War Invalids and Social Affairs and the local social insurance agency where the company is located.

 

2.

Suspension of contributions to retirement and death funds

 

Employees and employers are allowed to suspend their contributions to the retirement and death fund06 months from the time of submission of the application. (No more than 12 months for settlement of suspension of closure under the supporting policy in 2020)Employers who have paid enough social insurance or are temporarily suspended from paying for the retirement and death fund until the end of April 2021, have to reduce employees participating in social insurance by 15% or more compared to April 2021 (including employees who stop work, postpone the implementation of labor contracts and agreements on unpaid leave).The guidelines applicable to 2021 have not been issued. For more details, please refer to the instructional dispatch ‘No. 553/BHXH-QLT’ dated 23 March 2020 or contact the ‘Labor, War Invalids and Social Affairs Office’ and the local social insurance agency where the company is located.
3.

Supporting employment maintenance training for employees

 

Employers are supported with funding for training, retraining and improving vocational skills by the Unemployment Insurance Fund. Maximum support is VND 1,500,000 per employee per month.

up to 06 months.

 

·   The unemployment insurance is sufficiently paid for employees for 12 months or more until the time of request for support.

·   Change of technological structure as prescribed in Clause 1 Article 42 of the Labor Code;

·   The revenue of the adjacent quarter before the time of request for support decreased by 10% or more as compared to the same period in 2019 or 2020.

·   Plan or coordinate with vocational education institutions to train, retrain and improve vocational skills to maintain jobs for employees as prescribed.

Deadline for submission of application for support is from 01/7/2021 to 30/6/2022.

 

4.

Support employees who postpone labor contracts, or un-paid leave

 

Employees are entitled to one-time support for loss caused by the suspension of labor contracts or un-paid leave as follows:

·      From 30 consecutive days or more to VND 1,800,000/person.

·      Pregnant employees are supported with VND1,000,000/person. Raising or caring children under 06 years of age   is supported by an additional VND 1,000,000/child for children under 06 years of age and are only supported by a single parent.

 

Once

·   Employees are working at enterprises which are suspended from operation at the request of competent authorities to prevent and combat COVID-19 epidemic.

·   The labor contract, or un-paid leave is postponed for a period of 30 consecutive days or more, (from 01 May 2021 to 31 December 2021) and the time of suspension of the performance of the labor contract, or un-paid leave is between 01 May 2021 and 31 December 2021.

·   Participation in compulsory social insurance immediately before the suspension of the labor contracts or un-paid leave.

Please refer to ‘Dispatch No. 2209/UBND-KT’ of The People’s Committee of Ho Chi Minh City dated 01 July 2021, ‘Dispatch No. 2525/BHXH-QLT’ dated 05 July 2021 of Social Insurance office of  Ho Chi Minh City for more details.
5.Support employees who stopped working

Employees who stop working are supported once with VND 1,000,000 / person.

Pregnant employees are supported with an additional VND 1,000,000/person. Raising or caring  children under 06 years of age   is supported by an additional VND 1,000,000/child under 06 years of age who is only supported by a single parent.

Once

·   Working under the labor contract

·   Stopped working under Clause 3, Article 99 of the Labor Code and is subject to medical isolation or in blockaded areas at the request of competent authorities for a period of 14 days or more between 01 May 2021 and 31 December 2021.

·   Participating in compulsory social insurance immediately before the work was stopped.

 
6.Support employees who terminated their labor contracts but are not eligible for unemployment benefits.

Employees who receive one-time support due to termination of labor contracts but are not eligible for unemployment benefits:

·      Support with VND 1,800,000/person.

·      Pregnant employees are supported with an additional VND 1,000,000/person. Raising or   caring    children under 06 years of age is supported by an additional VND 1,000,000/child under 06 years of age who is only supported by a single parent.

Once

·   Employees are working at enterprises which terminated their labor contracts due   to the suspension of operation at the request of competent authorities to prevent and control COVID-19 epidemic between 01 May 2021 and 31 December 2021.

·   Are participating in compulsory social insurance.

·   Not eligible for unemployment benefits.

Please refer to ‘Dispatch No. 2209/UBND-KT’ of The People’s Committee of Ho Chi Minh City dated 01 July 2021 and ‘Dispatch No. 2525/BHXH-QLT’ dated 05 July 2021 of Social Insurance office of  Ho Chi Minh City for more details
7.Loan policy for Pay-outEmployers are allowed to borrow money from the Bank for social policy at an interest rate of 0% and do not have to secure loans to pay their employees’ wages.Loan term is less than 12 months

·   Employees who are paid to stop working in compulsory social insurance must stop working for 15 consecutive days or more as prescribed in Clause 3, Article 99 of the Labor Code between May 1, 2021 and March 31, 2022.

·   Employers have no bad debts at credit institutions or branches of any foreign banks at the time of loan application

Maximum loan amount is equal to the regional minimum wage for the number of employees as per the period of actual leave for up to 03 months.
8.Loan Policy for Production RestorationEmployers are allowed to borrow money from banks for social policy with an interest rate of 0% and do not have to secure loans to pay salaries to employees.

·   Employees are working under the labor contract and are participating in compulsory social insurance.

·   Employers have no bad debts at credit institutions or branches of any foreign banks at the time of loan application.

·   Employers must have suspended their operations at the request of competent authorities to prevent and control COVID-19 epidemic from 01 May 2021 to 31 March 2022 while returning to production and business

(or)

·   Employers are operating in the field of transport, aviation, tourism, or accommodation services and sending Vietnamese employees to work abroad under contract from 01 May 2021 to 31 March 2022.

The maximum loan amount is equal to the regional minimum wage for the number of employees working under the labor contract as per the maximum salary for a period of 03 months

Based on the above information, we can see that the Government’s policies for supporting employees and employers affected by the pandemic are mainly in the form of financial support such as subsidies for employees, loans to enterprises etc. This can be considered as a prompt and effective mechanism to help employees and enterprises during this difficult time.

For more details on the Government’s policies for supporting employees and employers affected by the Covid-19 pandemic and for the guidelines on the procedures to enjoy the benefits of these policies, employees and enterprises may refer to the regulatory documents outlined in each policy section or contact the ‘Office of Labor, War Invalids and Social Affairs’ and the local social insurance agency where the company is located for more information.

Writing period: 12/07/2021.

The article is based on applicable law at the time noted above and may no longer be relevant at the time the reader approaches this article due to the change in applicable law and the specific case in which the reader wishes to apply. Therefore, the article has only reference values.

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