Luu Quang Tuan Institute of Labour Science and Social Affairs

Transcription

1 UNEMPLOYMENT INSURANCE IN VIETNAM: REFORM AND IMPLEMENTATION Luu Quang Tuan Institute of Labour Science and Social Affairs Manila, 18-20, Aug. 2015

2 CONTENTS 1. History of Unemployment Insurance in Vietnam 2. Unemployment Insurance Reform 3. Main Results of Unemployment Insurance Implementation 4. Key Implications 2

3 1. History of UI in Vietnam Before 1986: under the model of planned economy, there had no concept unemployment in Vietnam : the Government issued regulations to support the unemployed, mainly focus on the redundant workers from SOE restructuring (5 decisions, 3 decrees, 1 ordinance had been issued) : UI schemes was identified and implemented via the Social Insurance Law (compulsory SI, Voluntary SI and UI) Since 1 Jan. 2015: UI schemes has been implemented via the Employment Law (Employment creation, LM information, National occupational skills, Employment Services, UI). 3

4 2. UI Reforms Coverage Contributors to the UI fund UI policy 2009 UI policy Vietnamese citizens working under labor contracts of at least 3 months for employers, those employers are also covered by the UI law - Vietnamese citizens working under labor contracts of at least 12 months for employers who employ 10+ employees, those employers are also covered by the UI law - Employees: 1% of their monthly wage - Employers: 1% of the monthly wage fund - Government: 1% of the monthly wage fund - Employees: 1% - Employers: 1% -Gov: at most 1% 4

5 2. UI Reforms UI regimes 1. level of monthly UA UI policy 2009 UI policy Unemployment Same as UI policy 2009 allowance (UA) plus 2. Aid for job searches 5. Aid for employers in 3. Aid for vocational training/re-training to training improve qualifications of 4. Social health insurance occupational skills for job maintenance for workers = 60% of the average six consecutive month contribution before unemployment Same as UI policy 2009 but not exceed 5 times the MW 5

6 2. UI Reforms 1. Period of UA 2. Aid for job searches UI policy 2009 UI policy months, if contributed UI - 3 months, if for 12-<36 months contributed UI for months, if contributed UI <36 months for 36-< 72 months - added with 1 month - 9 months, if contributed UI for each additional for 72-<144 months period of payment of - 12 months, if contributed UI full 12 months, but not for 144+ months exceed 12 months. Free job counseling and recommendation Same as UI policy

7 2. UI Reforms 3. Duration of vocational training support for unemployed 4. Health insurance 5. Duration of support for employers in training/re-training for workers UI policy 2009 UI policy 2015 <= 6 months VT <= 6 months VT support for support for unemployed if they unemployed if they contributed UI for contributed UI for <=12 months within >=9 months within a a 24-month period 24-month period paid by Vietnam Same as UI policy Social Security (VSS) 2009 Employers may receive financial support for <= 6 months if contributed UI for >= 12 months 7

8 2. UI Reforms Conditions for entitlement to UI UI policy 2009 UI policy Contributed UI for >= 12 months within a 24-month period before becoming unemployed 2. Registered with VSS 3. Not yet found a job within 15 days after the date of registration with VSS. -Same as # 1. In case workers with labour contracts of 3-12 months, must contributed UI for >= 12 months within a 36- month period - #2+3 change to: within 30 days, submitted to employment service centre 8

9 3. Main Results of UI Implementation Main Actors of UI System MOLISA/BOE Central Government VSS MOF DOLISA at Provincial level Provincial SS agencies ESC and VT Institutions Unemployed Enterprises 9

10 3. Main Results of UI Implementation Main Tasks of Actors in the UI System MOLISA: to build the UI policies; guide UI policy implementation; monitor UI policies; inspect UI policy implemetation DOLISA: to disseminate UI policies; direct ESC in implementing the UI policies; decide on unemployment allowance entitlement, vocational training support, suspension from or resumption or termination of unemployment allowance entitlement for the unemployed; monitor, inspect on UI. ESC: to receive UI dossiers; review and carry out procedures to settle UI; provide job counseling and appropriate VT for the beneficiaries; store UI dossiers. VT Institutions: to provide VT for unemployed under the requirements from DOLISA. 10

11 3. Main Results of UI Implementation Roles of Main Actors in the UI System VSS: to guide UI policy implementation for provincial SS agencies, enterprises, workers; carry out procedures for participation in UI, payment of UI premiums; inspect UI collection; manage the UI fund. Provincial SS Agencies: receiving employers' registration dossiers of participation in UI and payment of UI premiums; to collect UI; pay unemployment allowances; issue health insurance cards and settle health insurance-related benefits for beneficiaries. Enterprises: to disseminate UI policies; comply with regulations on UI participation; complete UI dossiers for the unemployed; in collaboration with VT institutions to organize training/retraining courses for workers. 11

12 3. Main Results of UI Implementation Performance and Evaluation Coverage: slower expanding (year on year) Contributors (mill. persons) Contributors/Labour force (%) 12

13 3. Main Results of UI Implementation Performance and Evaluation UI beneficiaries: - High rate of unemp. got monthly UA - High rate of Unemp. got job counseling - Low rate of VT Total Unemployed (,000 persons) Registered Unempd(,000 persons) Submitted UI dossiers(,000 dossiers) Monthly UA (,000 persons) Lump sum (,000 persons) Job counseling (,000 persons) Vocational training (,000 persons)

14 3. Main Results of UI Implementation Performance and Evaluation UI fund: Highly surplus but rate of payments/revenues has been increasing rather fast Revenues (Bill. VND) 3,511 5,400 6,747 10,416 11,813 Payments (Bill. VND) 459 1,126 3,911 4,528 Payments/revenues (%)

15 3. Main Results of UI Implementation Performance and Evaluation UI debt: is a problem (local government being in debt often accounted for around 30-40% of total debt) UI debt (Bill. VND) Debts/revenues (%) Debts/payments (%)

16 4. Key Implications Being a social protection policy, UI should cover as many vulnerable workers as possible. In Vietnam, workers to be covered by UI policy has been loosen: from workers with >=12 month labour contracts+ in firms with size of at least 10 workers to workers with >=3 month labour contracts regardless the size of firms. In order to mitigate the UI fund abuse, it is necessary to determine the roof of monthly unemployment allowance and the period receiving the UA. In Vietnam this monthly benefit does not exceed 5 times of the minimum wage, the maximum period of UA dose not exceed 12 months. 16

17 4. Key Implications It should be taken into account the balance between the length of contribution period and the support of vocational training for insured workers. Vietnam, the insured workers will get support of VT if he/she has contributed UI for 9 month (since 2015). The policy should create more convenient for workers with vulnerable employment to be provided UA. In Vietnam, workers with labour contracts of 3-12 months, must contributed UI for >= 12 months within a 36-month period; other workers must contributed UI for >=12 months within a 24-month period The M&E and inspection should be improved to enhance the compliance of UI policy. 17

18 Thank you for your attention 18