The Ministry of Labor, Invalids, and Social Affairs (MOLISA) reported a surplus of approximately $2.5 billion (59.3 trillion VND) in the Unemployment Insurance Fund by the end of 2023.

Annually, about $420 million (10 trillion VND) is allocated for unemployment benefits, providing a solid foundation for worker support policies.

Expanding coverage and benefits

The draft revision of the Employment Law proposes expanding the scope of unemployment insurance to include:

All workers with employment contracts, including those with indefinite or fixed terms of one month or more.

Part-time employees earning a monthly salary equal to or above the mandatory social insurance minimum base.

Business managers, controllers, representatives of state capital in enterprises, and cooperative executives receiving salaries and participating in mandatory social insurance.

Additional provisions include requiring unemployment insurance for individuals with stable, regular incomes as defined by the government based on socio-economic conditions.

The law also plans to:

Allow certain cases to retain unemployment insurance contribution periods.

Cap contributions at 1% of monthly salaries for employees, employers, and state support.

Set a salary base for contributions at a maximum of 20 times the regional minimum wage.

Supporting quick re-entry to the workforce

According to Vu Trong Binh, Director of the Employment Department, the fund aims to quickly reintegrate workers into the labor market rather than encouraging long-term reliance on benefits.

"If workers remain unemployed and only rely on benefits, the fund fails its purpose. Its success lies in matching supply and demand effectively," Binh stated.

The revised law introduces more flexible measures to support not only workers’ livelihoods during unemployment but also employers, aiming to strengthen market resilience with comprehensive strategies.

Since the implementation of the 2013 Employment Law:

The unemployment insurance policy covered 31.6% of the workforce by the end of 2023, exceeding the 28% target set by Central Resolution No. 28.

The average annual increase in participants was 6%, while fund revenue grew by 9% per year between 2015 and 2023.

By 2023, the fund disbursed annual unemployment benefits to 826,000 recipients, while 7.4 million workers had received benefits by March 2024.

1.68 million individuals were referred to jobs, although vocational training uptake remained low, with only 261,600 participants, showing a declining trend.

The fund’s surplus is derived from contributions by employers, employees, state support, investment returns, and other lawful revenues. However, challenges persist:

Employers delay or evade contributions, including unemployment insurance, causing irregularities in benefit distribution.

Some employees violate regulations by failing to report new employment or claiming benefits while employed, leading to recovery measures.

The current contribution rate ensures the fund's stability and surplus, supporting policies aimed at laborers. The MOLISA emphasizes that unemployment insurance is crucial for maintaining livelihoods, alleviating employer financial burdens, and reducing pressure on the state budget.

The ongoing revision of the Employment Law seeks to address gaps and inefficiencies, making unemployment insurance more inclusive and responsive to modern labor market demands.

Vu Diep