HOW ARE ENTERPRISES PUNISHED IF THEY DO NOT CONFIRM UNEMPLOYMENT INSURANCE?

Table of Contents

1. What is unemployment insurance?

2. Subjects required to participate in unemployment insurance

3. Responsibility for confirming unemployment insurance

4. Duration of unemployment insurance benefits for employees

5. Enterprises that do not confirm unemployment insurance are penalized according to legal regulations

1. What is unemployment insurance?

Based on the provisions of Clause 4, Article 3 of the 2013 Law on Employment: “4. Unemployment insurance means a scheme aiming to compensate part of income of a worker when he/she becomes unemployed, support him/her to receive vocational training, maintain employment, or seek employment, on the basis of making contributions to the Unemployment Insurance Fund.”

2. Subjects required to participate in unemployment insurance

Pursuant to Article 43 of the 2013 Law on Employment, which stipulates subjects required to participate in unemployment insurance:

“1. Workers are obliged to participate in unemployment insurance when working under labor contracts or working contracts below:

a/ Labor contracts or working contracts of indefinite time;

b/ Labor contracts or working contracts of definite time;

c/ Seasonal or job-based working contracts with a term of between full 3 months and under 12 months.

In case a worker has signed and is performing more than one labor contract specified in this Clause, the worker and the employer under the labor contract signed first shall participate in unemployment insurance.

2. Workers defined in Clause 1 of this Article who are currently on pension or doing housework are not required to participate in unemployment insurance.

3. Employers obliged to participate in unemployment insurance include state agencies, public non-business units and people’s armed forces units; political organizations, socio-political organizations, socio-political-professional organizations, social organizations and socio-professional organizations; foreign agencies and organizations and international organizations operating in the Vietnamese territory; enterprises, cooperatives, households, business households, cooperative groups, other organizations and individuals that hire or employ workers under the labor contracts or working contracts specified in Clause 1 of this Article.”

3. Responsibility for confirming unemployment insurance

Pursuant to Clause 3, Article 48 of the 2019 Labor Code, upon termination of a labor contract, the employer is responsible for performing the following tasks:

“3. Employers are responsible for:

a) Completing the process to certify the duration within which social insurance and unemployment insurance contributions were made and returning this together with the other original documents of the worker that they are keeping.

b) Providing copies of all documents relating to the worker’s working period upon the request of the worker. The cost of copying and sending such documents shall be borne by the employer.”

Thus, the enterprise is responsible for completing the procedure to confirm the period of social insurance and unemployment insurance payment for the employee when the labor contract is terminated.

4. Duration of unemployment insurance for employees

According to Clause 2, Article 50 of the 2013 Law on Employment, it is stipulated as follows: “2. The duration of unemployment allowance receipt is based on the number of months of payment of unemployment insurance premiums. This duration is 3 months if the period of payment of unemployment insurance premiums is between full 12 months and full 36 months, which is added with 1 month for each additional period of payment of full 12 months, but must not exceed 12 months.”

Thus, according to the above provisions, the number of months of unemployment benefits will be converted as follows:

– Employees who have paid unemployment insurance for 12 months up to 36 months will receive 03 months of benefits.

– After that, for every additional 12 months of contributions, employees will receive 01 additional month of unemployment benefits, not exceeding 12 months.

5. Enterprises that do not confirm unemployment insurance will be fined according to legal regulations

Enterprises that intentionally do not complete the procedure to confirm the unemployment insurance payment period for employees will be subject to administrative sanctions according to the provisions of Clause 2, Article 12 of Decree 12/2022/ND-CP stipulating administrative sanctions in the field of labor, social insurance, and Vietnamese employees working abroad under contracts.

Specifically, the fines imposed on individual employers are as follows:

“a) A fine ranging from VND 1.000.000 to VND 2.000.000 for violations from 01 to 10 employees;

b) A fine ranging from VND 2.000.000 to VND 5.000.000 for violations of between 11 and 50 employees;

c) A fine ranging from VND 5.000.000 to VND 10.000.000 for violations of between 51 and 100 employees;

d) A fine ranging from VND 10.000.000 to VND 15.000.000 for violations of between 101 and 300 employees;

dd) A fine ranging from VND 15.000.000 to VND 20.000.000 for violations of 301 employees or more.”

In case the employer is an organization that violates, the fine will be doubled the above amount (according to Clause 1, Article 6, Decree 12/2022/ND-CP).

In addition, based on Clause 4, Article 12, Decree 12/2022/ND-CP, the enterprise will also be subject to remedial measures such as completing the procedure to confirm the unemployment insurance payment period for employees.