New policies on employment and unemployment insurance

Employment is defined as income generating labor activities that are not prohibited by law. The State consistently implements policies to support self-employment and unemployment insurance for young people, persons with disabilities, the elderly, ethnic minority people and rural workers. These are among the notable provisions of the 2025 Law on Employment, which will take effect on January 1, 2026, and have drawn significant public attention.

Ngo Manh Chinh, Director of the Xuan Loc Transaction Office under the Vietnam Bank for Social Policies (VBSP) branch in Dong Nai province, talks with farmers in Trung Son hamlet, Xuan Loc commune, about the use of preferential loans for job creation. Photo: Doan Phu

Borrowing capital for on-site self-employment

To create her own job, Nguyen Thi Le, a resident of Loc Thanh commune, Dong Nai province, resorted to non-institutional lenders at interest rates higher than those offered by banks to purchase tools and equipment and open a hair salon. As all investment costs were financed through external borrowing, combined with rental expenses and a limited customer base, she was forced to close the salon and return the premises after nine months of operation. However, Le did not give up and was determined to start over. While seeking capital to reopen the salon, she was advised by her friends on how to access preferential loans for job creation from the local Vietnam Bank for Social Policies.

Unlike Le, to secure investment capital for the Tet flower season, Kieu Thi Nhung, a resident of Xuan Loc commune, proactively joined the Trung Son hamlet's borrowing group of the Vietnam Bank for Social Policies branch in Xuan Loc and obtained a loan of 60 million VND at an interest rate of 6.6 percent per year with a loan term of 24 months. Thanks to this capital, Nhung was able to purchase gladiolus seedlings and necessary materials as early as September 2025, in preparation for planting them in early November or December.

Kieu Thi Nhung shared that many women from the Choro ethnic minority in Trung Son hamlet have also gained access to preferential job creation loans through the hamlet’s borrowing group of the Vietnam Bank for Social Policies. For each flower crop, growers earn profits of 15–20 million VND per 1,000 square meters.

Ngo Manh Chinh, Director of the Xuan Loc Transaction Office under the Vietnam Bank for Social Policies branch in Dong Nai province, said that borrowing groups are trained and guided by the Xuan Loc Transaction Office in compiling beneficiary lists, identifying needs, and completing procedures and project dossiers for submission. The office then reviews and approves disbursement. Average outstanding loans exceed 30 billion VND per year for projects supporting farmers and small traders in six communes: Xuan Loc, Xuan Bac, Xuan Thanh, Xuan Phu, Xuan Dinh and Xuan Hoa.

Employees working overseas under contracts are entitled to support policies, including pre-departure orientation education; training and development of occupational skills and foreign languages to meet the requirements of foreign labor receiving parties; and other related costs for employees working abroad under contracts.

Clause 2, Article 14 of the 2025 Law on Employment

Other notable provisions

The 2025 Law on Employment comprises 8 chapters and 55 articles. Compared with the 2013 Law on Employment (amended and supplemented in 2024), it introduces a wide range of employment related policies that have attracted strong public interest. Notably, the law provides specific regulations on employment support policies for young people, particularly those who have completed military service, public security service, volunteer service, or participated as young volunteer intellectuals (Article 12).

Elderly workers are eligible for loans to support job creation, retention and expansion, as well as support for training and upskilling, and assistance in participating in assessments and the issuance of national occupational skill certificates (Article 13). Employers are entitled to a reduction in unemployment insurance contributions that they are required to pay for workers with disabilities, for a period of up to 12 months when newly hiring and employing such workers (Clause 6, Article 33).

Lawyer Cao Son Ha of the Dong Nai Provincial Bar Association said that the 2025 Law on Employment introduces several new regulations on unemployment insurance, an issue of great concern to workers in terms of contributions and benefits. Accordingly, Clause 1, Article 31 of the 2025 Law on Employment stipulates that in cases where a worker simultaneously falls under multiple categories subject to unemployment insurance participation, both the employee and the employer are responsible for participating in unemployment insurance together with compulsory social insurance. Employers are required to fully pay unemployment insurance contributions for workers upon termination of labor contracts, working contracts or employment, in order to ensure timely settlement of unemployment insurance benefits. If employers fail to fully pay unemployment insurance contributions, they are required to pay an amount equivalent to the unemployment insurance benefits to which the worker is entitled under the law.

According to lawyer Cao Son Ha, the 2025 Law on Employment maintains the unemployment allowance level at 60 percent of the average monthly salary on which unemployment insurance contributions were paid over the six most recent months prior to contract termination, as well as the maximum unemployment benefit duration of 12 months, as stipulated in the 2013 Law on Employment (amended and supplemented in 2024). However, Clause 4, Article 39 of the 2025 Law on Employment provides that individuals receiving unemployment benefits will have their health insurance premiums paid by the social insurance agency from the Unemployment Insurance Fund, offering workers greater peace of mind.

By Doan Phu – Translated by Dang Huyen, Thu Ha