Pricewaterhouse Coopers - New Circular on Unemployment Insurance

Pricewaterhouse Coopers - New Circular on Unemployment Insurance

On 22 January 2009, the Ministry of Labour, War Invalids and Social Affairs issued Circular 04/2009/TT-BLDTBXH (“Circular 04”), providing guidance for implementing a number of Articles in Decree 127/2008/ND-CP (“Decree 127”), on unemployment insurance, dated 12 December 2008.

Under Circular 04, various provisions in Decree 127 are now clarified, including:

 Circular 04 clarifies the rules for calculating the monthly unemployment allowance – the period prior to job loss need not now be a consecutive 6 month period – interruptions are now taken into account for these calculations.

 Employers with 10 or more employees (including those under indefinite, definite and seasonal labour contracts) are required to participate in the scheme. Employers must participate in the scheme on the 1st day of the following month after this threshold is met.
If/when the number of employees falls below 10, employers who have previously
participated in the scheme must continue to contribute unemployment insurance for their remaining employees until the end of that year. The number of employees for identifying whether an employer will contribute unemployment insurance will be counted as at 1st January of each year.

 Guidelines are also provided on the procedures for registering with, contributing to, and receiving benefits from the unemployment insurance fund.

Despite providing deadlines for employers to register new employees in the scheme, Circular 04 does not provide a deadline for registering existing employees (whose labour contracts were signed before 1 January 2009), nor the procedures for this.

Circular 04 is retroactively effective from 1 January 2009.