On 9 April 2020, the Government of Vietnam passed Resolution No. 42/NQ-CP (Resolution 42) to help employees and businesses affected by coronavirus (COVID-19).

Resolution 42 consists of a financial package aimed at helping those affected by coronavirus and targets individuals and businesses. The measures have been introduced in order to help the economy recover quicker and support businesses after the coronavirus pandemic ends.

Some of the key measures to help employees and businesses have been outlined below:

Financial Assistance for Employees

If an employee’s labor contract is temporarily suspended or they have had to take unpaid leave for a month or more, they will be eligible for financial assistance of VND 1.8 million (US$77) per month. This can be applicable for a maximum duration period of up to three months, starting from 1 April 2020.

If an employee loses his/her job but is not eligible for unemployment allowance or works without a labor contract and has lost his/her job, they are eligible for financial assistance of VND 1 million (US$43) per month.

From 1 April 2020 onwards, employees must submit their application to the relevant local authority in Vietnam to benefit from the assistance. Should an employee be eligible for more than one allowance category, they will only be entitled to the one with the highest financial assistance amount.

Financial Assistance for Employers

If an employer is facing financial difficulties as a result of coronavirus and has paid at least 50% of staff salaries in advance to their employees during their suspension from work (from April to June 2020), they will be given collateral-free, zero-percent interest loans from the Vietnam Bank for Social Policies for a maximum period of 12 months. The loan amount is 50% of the regional minimum salary per employee for not more than a maximum of three months. Should an employee be suspended from work due to the coronavirus pandemic, by law they must still be paid an amount agreed by both parties, however not lower than the regional minimum wage.

If an employer has no choice but to reduce its workforce by 50% or more (compared to its workforce size at the time the coronavirus pandemic was declared) due to the pandemic, both employer and its employees will be permitted to suspend their contributions to the pension and survivor funds for a maximum of 12 months.

On 24 April 2020, the Government of Vietnam issued Decision No. 15/2020/QD-TTg, guiding the implementation of Resolution 42. Also referred to as ‘The Decision’, it contains forms and applications that employees and businesses can use for submitting their applications for the incentives mentioned above.

For more information on Vietnam’s labour laws, tax, and payroll landscape, browse activpayroll’s Vietnam Global Insight Guide: find background on Vietnam’s global economic profile, major industrial sectors and common business practices.

For more news and information on how the coronavirus pandemic is impacting payroll across the globe, check out our News Section.

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