People scan a notice board in search for jobs at an employment fair in Ho Chi Minh City. Local laborers who lose their jobs will be paid unemployment insurance under a decree that comes into force next year.

Employers will have to pay less, but employees will get more compensation under a decree on unemployment insurance that is set to take effect next year.

The decree, under the Social Insurance Law, stipulates that Vietnamese employees who have signed contracts of a least a year will be eligible to get unemployment insurance.

Employers will only have to pay 12 percent of a month’s salary for each year of employment in case the latter loses her/his job, as opposed to the 50 percent under current regulations, head of MOLISA’s Employment Department, Nguyen Dai Dong, said at a press briefing in Hanoi.

The employees, on the other hand, will receive compensation of 180 percent of a month’s salary for each year they have worked, he said.

Dong said MOLISA estimates between five million and six million Vietnamese will pay unemployment insurance taxes under the new decree.

The slower pace of economic growth is expected to make the employment rate drop by 0.65 percentage points in 2009 over 2007, Dong said. Vietnam has targeted a GDP growth of 6.5 percent in 2009, compared to the 8.5 percent achieved in 2007.

The number of unemployed people will increase in urban areas which now have more than nine million employees, and some 35 million laborers in rural areas will be seriously affected, he said.

Meanwhile, the deputy head of the Department of Cooperative Development Policy under the Ministry of Agriculture and Rural Development, Phan Vinh Dien, was concerned about certain difficulties in implementing the decree in some sectors.

Almost all agricultural cooperatives with limited financial capacity might encounter difficulties in paying unemployment insurance for their employees, he said, adding that about 10,000 agricultural cooperatives pay monthly salaries of less than VND1 million (US$60.6) to most of their employees, and social insurance for only 10 percent of them.

Some catfish and shrimp exporters and producers, who have been affected by the global financial turmoil, will also find it difficult to implement the decree, he said.

At the press briefing, MOLISA Deputy Minister Nguyen Thanh Hoa said local relevant agencies will make greater efforts to provide information to both employers and employees on the issue to ensure effective implementation of the decree.

They will also strengthen supervision of the signing of labor contracts between firms, especially private and foreign-invested ones, and their employees, as well as their adherence to the decree, he said, adding that strict action will be taken against violators.

Reported by Bao Van