Answer:
1. When an Employee terminates a LC, does the Employer have to pay unemployment allowanceto the Employee during the period when the enterprise does not pay unemployment insurance?
Firstly, it is necessary to clarify two concepts:
“Unemployment allowance” is an amount paid by the competent social insurance agency to any Employee who is eligible to receive the allowance upon termination of the LC[1].
“Severance allowance” is the amount that the Employer must pay to any qualified Employee upon termination of the LC[2].
Thus, when an Employee terminates a LC, the Employer is not obliged to pay an unemployment allowance to such Employee. Instead, upon the termination of the LC with an Employee who participates in unemployment insurance payment, Employee will be paid unemployment allowanceby the unemployment insurance fund. In respect of the period of not participating in unemployment insurance, the Employee will be entitled to a severance allowance paid by the Employer if the Employee meets all the conditions for entitlement as prescribed by law.
2. Salary rate as a basis for paying unemployment allowanceand severance allowance.
With regard to the severance allowance, the Employee will be entitled to a half-month salary allowance for each working year (provided that the Employee has worked for the enterprise for full 12 months or more), if there are only 06 months of work or less, it is counted as half a year of work; over 06 months is counted as 01 working year. The salary rate used to calculate the severance allowance is the average salary of the Employee under the LC of the preceding 06 months before the Employee resigns[3].
The monthly unemployment allowance level will be calculated at 60% of the average monthly salary paid for unemployment insurance of the preceding 06 months before the Employee’s resignation, but not exceed 05 times the statutory pay rate for any Employee who is under salary regime prescribed by the State or not exceed 05 times the regional minimum salary for the Employee who pays unemployment insurance under the salary regime decided by the Employer at the time of terminating the LC or working contract[4].
[1] Article 49 of Law on Employment
[2] Article 46.1 of the Labour Code and Article 8.1 of Decree No. 145/2020/ND-CP of the Government on 14 December 2020.
[3] Article 46.1 and 46.3 of the Labour Code and Article 8.3 (c) of Decree 145/2020/ND-CP of the Government on 14 December 2020
[4] Article 50.1 of Law on Employment
