Vietnam: Conditions for enterprises to get loan to pay furlough wages and loan for production recovery

LEGAL UPDATES

Vietnam: Conditions for enterprises to get loan to pay furlough wages and loan for production recovery

1. Conditions for enterprises to get loans to pay furlough wages and loans for production recovery

Resolution 68/NQ-CP stipulating a number of policies to support employees and employers facing difficulties due to the Covid-19 pandemic takes effect on 1st July, 2021.

Accordingly, employers are entitled to receive a loan to pay the furlough and the production recovery wages, specifically: 

  • Loan to pay furlough wages: Employers are entitled to borrow a loan from Vietnam Bank for Social Policies at the interest rate of 0% and not required to furnish loan security to pay furlough wages to employees who have participated in compulsory social insurance and have been put on furlough for 15 consecutive days or more as prescribed in Clause 3, Article 99 of the Labor Code, from May 1st, 2021 to the end of March 31st, 2022. To receive the benefit, employers must have no bad debt at any credit institution and foreign bank branch at the time of applying for a loan. The maximum loan amount is equal to the regional minimum wage for the number of employees according to the actual payment period of furlough wages but not exceeding 03 months. The loan term is less than 12 months. 
  • Loan to pay wages for production recovery: Employers are entitled to borrow a loan from Vietnam Bank for Social Policies at the interest rate of 0% and is not required to furnish loan security to pay wages to the employees who have worked under employment contracts and have contributed to compulsory social insurance if it resumes the business after suspending operations at the request of the competent authority to prevent and control the COVID-19 pandemic, from May 1st, 2021 to the end of March 31st, 2022 and its line of business is in the field of transportation, aviation, tourism, accommodation services, sending Vietnamese workers to work abroad under a contract from May 1st, 2021 to the end of March 31st, 2021. To receive the benefit, employers must have no bad debt at any credit institution and foreign bank branch at the time of applying for a loan. The maximum loan amount is equal to the regional minimum wage for the number of employees under employment contracts according to the actual payment period of wages but not exceeding 03 months. The loan term is less than 12 months.

2. The rate of payment of compulsory social insurance to the fund of occupational accidents and diseases is 0% until June 30th, 2022 

Also according to the content of Resolution No. 68/NQ-CP, employers are entitled to a premium rate of 0% of the salary fund as the basis for paying social insurance premiums to the Insurance Fund for Occupational Accidents and Diseases for 12 months (from July 1st, 2021 to June 30th, 2022) for employees eligible for occupational accident and disease insurance (except for officials, public employees, people in the people’s armed forces, employees in the agencies of the Party, the State, administrative agencies, public sector entities on the payroll of the state budget). Employers will provide the monetary support obtained from the reduction in premiums to the Insurance fund for occupational accidents and diseases for their employees in order to combat the COVID-19 pandemic.

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