Changing conditions for businesses to get a loan to pay salaries for work stoppage and restoring production

LEGAL UPDATES

Changing conditions for businesses to get a loan to pay salaries for work stoppage and restoring production

Resolution 126/NQ-CP, issued on October 8th, 2021, has adjusted the conditions for businesses to get loans to pay salaries for work stoppage and restoring production. Specifically:

(i) Loans to pay salaries for work stoppage:

Employers are entitled to a loan from the Bank for Social Policies at 0% interest rate without loan security measures to pay salaries for work stoppage for employees participating in compulsory social insurance and stopping working for 15 consecutive days or more as prescribed in Clause 3, Article 99 of the Labor Code, from May 1st, 2021 to March 31st, 2022.

The maximum loan amount is equal to the regional minimum wage for all employees according to the actual time to pay salaries for the work stoppage, up to 3 months. The loan term is less than 12 months.

(ii) Loans to pay salaries to restore production:

  • Employers must suspend operations at the request of competent state agencies to prevent and control the COVID-19 epidemic;
  • Employers with headquarters, branches, representative offices, production and business locations in the locality taking measures to prevent and control the epidemic according to the principles of Directive 16/CT-TTg;
  • Employers operating in the fields of transport, aviation, tourism, accommodation services and sending Vietnamese workers to work abroad under contracts.

The above cases taking place from May 1st, 2021 to the end of March 31st, 2022 are entitled to a loan at the Bank for Social Policies at 0% interest rate without loan security measures to pay wages to employees. The maximum loan amount is equal to the regional minimum wage for the number of employees working under labor contracts and participating in compulsory social insurance according to the actual payment period, up to 3 months. Loan term less than 12 months.

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This legal update is for general information only and is not a substitute for legal advice.