Support packages for enterprises and workers need to be deployed soon

According to estimates by the International Labour Organisation, as many as 25 million people could become unemployed, with a loss of up to US$3.4 trillion in workers’ income due to the impact of the COVID-19 pandemic. In Vietnam, the epidemic has caused a number of businesses to narrow or stop production whilst many workers have lost their jobs.

Labourers carry out procedures for receiving unemployment insurance benefits at the Hanoi Job Service Centre. (Photo: NDO/Xuan Cuong)
Labourers carry out procedures for receiving unemployment insurance benefits at the Hanoi Job Service Centre. (Photo: NDO/Xuan Cuong)

Among the six policy groups proposed to the Government by the Ministry of Labour, War Invalids and Social Affairs (MoLISA) to support enterprises and workers, it can be seen that unemployment insurance support is one of the most important policy groups in need of being“activated” soon.

A report by the MoLISA shows that, in early March, when the Covid-19 epidemic had complicated developments, over 15% of businesses had to cut their production scale. The impact of the Covid-19 epidemic on labour and employment is also reflected through the unemployment insurance index.

The number of unemployed people who applied for unemployment insurance in February hit 47,164, an increase of 59.2% compared to January (29,839 people) and up 70% over the same period last year.

According to the proposal from MoLISA, the unemployment insurance policy group focuses on three main contents, including creating conditions for all enterprises and employees to temporarily suspend payment of unemployment insurance; completely exempting unemployment insurance for those who lost their jobs due to the impact of the COVID-19 epidemic; and using the surplus of the unemployment insurance fund to support businesses and workers such as training and retraining to improve their qualifications, capacity and skills.

The draft Government Resolution to support people facing difficulties caused by the COVID-19 epidemic was reviewed and discussed by the Government at its regular meeting in March.

Following the Prime Minister’s direction and conclusion at the meeting of permanent Government members on March 31, the Ministry of Planning and Investment is currently coordinating with the Government Office, the State Bank of Vietnam and relevant ministries and branches to complete the draft Government Resolution on measures to support people who are facing difficulties caused by the Covid-19 epidemic.

Along with a number of specific target groups, groups of workers and employers are given particular attention. Accordingly, workers who were laid off or put on leave without pay due to the direct impacts of the COVID-19 pandemic will each be provided with VND1.8 million (US$76) a month.

A monthly payment of VND1 million paid for three months will be given to an estimated five million workers who either lost their jobs, don’t have a labour contract or had their contracts terminated as their social insurance contribution period was not sufficient for unemployment benefit payout.

Employers can borrow from the Vietnam Social Policy Bank with a zero interest rate over 12 months to pay salaries for their furloughed workers in the three-month period.

Those eligible for more than two types of support in this bill will only be able to receive the highest value support. There will also be policies in place to help simplify the process of claiming unemployment support for workers.

Employers and employees will also temporarily be exempt from their obligatory contributions to the retirement and survivors’ fund (part of the Government-sponsored insurance programme).

More than half of the package’s value will be sourced from the State budget, while the remainder will come from “mobilisation of other sources,” according to the Government.

Speaking at the meeting, PM Nguyen Xuan Phuc emphasised that the Government highly supports the draft package and ordered measures be put in place to ensure the transparency of the implementation, that there would be no fraud, and that the support will go to the right people.