Vietnam: More Firms Liable for Unemployment Insurance, Health Insurance Contribution Cap Unclear Under New Legislation

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By Lien Hoang

Dec. 17—The threshold for employer liability for unemployment insurance has been lowered under legislation effective the first of the year, while other legislative changes have introduced ambiguity as to the cap for employer and employee health insurance contributions.

Under the Law on Employment, effective Jan. 1, 2015, businesses must start paying for unemployment insurance if they have employees with contracts of at least three months. Previously, insurance liability attached only to employers that had at least 10 workers under contracts valid for at least 12 months.

“This provision has broadened the range of participants,” Tran Nguyen Mong Van, tax senior manager at Grant Thornton in Ho Chi Minh City, told Bloomberg BNA.

The employer and employee each pay 1 percent of the worker's monthly salary up to a limit of 20 times the regional minimum wage. Companies must register with local social insurance agencies within 30 days of signing a work contract.

Health Insurance

Also effective Jan. 1, changes to the Law on Health Insurance limit employer health insurance contributions to 4 percent of salary and employee contributions to 2 percent, although under earlier and still effective regulations contribution maximums were 3 percent for employers and 1.5 percent for employees.

“There still is confusion regarding this provision,” Van said, adding that “we expect that further guidance will be released in December or early January 2015.”

To contact the reporter on this story: Lien Hoang in Ho Chi Minh City at lhoang@bnaglobal.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com