Working duration serves as the basis for calculating severance allowance and redundancy pay

The Government issued Decree No. 148/2018/ND-CP (“Decree 148”) on October 24, 2018 amending, supplementing certain guidelines of Decree No. 05/2015/ND-CP detailing the implementation of the Labor Code. Decree 148 shall become effective from December 15, 2018.

According to the current regulation, the working duration that is previously used by the employer as the basis to pay severance allowance (if any) to employee, is incorporated into the working duration for the purpose of calculating future severance allowance and redundancy pay. However, Decree 148 has amended this regulation. Accordingly, working duration that was already used as the basis to compute redundancy pay previously, will not be used to compute redundancy pay thereafter.

The basis for calculation of salary for annual leave, extra annual leave by seniority, public holiday, Tet holiday, paid leave is the salary indicated in labor contract of the preceding month. However, according to Decree 148, the basis for calculation has been changed to salary stated in labor contract.

Adjustment of pensions for female laborers

Decree 153/2018/ND-CP shall come into force on December 24. Decree 153 defines policy on adjustment of pensions for female laborers who start to receive pensions for the period from 2018 to 2021 and have paid social insurance premiums for full 20 years to 29 years and six months.

The Viet Nam Social Security reported that in the 2018-2021 period, the number of female laborers who paid social insurance from 20 to 29 years and six months will touch about 91,000 including 20,500 ones in 2018; 22,000 in 2019; 23,500 in 2020 and 25,100 in 2021.

More pupils eligible for exemption from tuition fees from academic year 2018-2019

Under Decree 145/2018/ND-CP, in addition to 15 cases specified in current regulations, from academic year 2018-2019 (September 1, 2018) children aged five entering kindergarten shall be entitled to exemption from tuition fees if they reside in areas with extremely poor conditions for socio-economic development whose parents or father or mother or guardian permanently reside in extremely poor towns, ethnic minority areas, mountainous areas and islands.

Foreign workers are required to pay 8% of compulsory social insurance premium from 2022

Decree 143/2018/ND-CP came into force from December 1 stipulates that any foreign worker working in Viet Nam is a mandatory participant in social insurance if he/she is granted a work permit or practicing certificate or practicing license by a Vietnamese authority and enters into an indefinite-term labor contract or fixed-term labor contract with an employer in Viet Nam.

An employee shall contribute 8% of monthly salary to the retirement and survivorship allowance fund (from December 01, 2018).

From December 01, 2018, contribution rate is 3% of monthly salary for insurance premium payment to the sickness and maternity fund and 0.5% to the occupational accident and occupational disease fund.

From January 01, 2022, contribution rate will be 14% of monthly salary to the retirement and survivorship allowance fund.