From 01/01/2021: apply new policies to millions of workers at once

From 1/1/2021, many major policies on employment, salary, rest time, health insurance… started to take effect, affecting tens of millions of people in the citizens.

Increase retirement age

One of the biggest changes to the Labor Code 2019 is the adjustment to increase retirement age. Accordingly, from January 1, 2021, the retirement age of male and female employees will be changed.

Specifically, in 2021, under normal working conditions, the retirement age for male employees is full 60 years and 3 months and that of female employees is full 55 years and 4 months.

Thereafter, each year an increase of 3 months for male workers and 4 months for female workers until the male employee retires at the age of 62 (in 2028) and the female employee retires at the age of 60 (in 2035).

New Policies To Millions Of Workers In Vietnam
New Policies To Millions Of Workers In Vietnam

Change in pension entitlement level

According to Article 56 of the Law on Social Insurance 2014, a male employee who starts to retire in 2021 and pays full 19 years of social insurance is entitled to a pension equal to 45%. In the case of male employees retiring from January 1, 2022 and paying full 20 years of social insurance, the benefit rate will be 45%.

Thereafter, each year additionally, the employee is charged an additional 2% until the maximum rate of monthly pension entitlement is 75%.

With female employees: Pay full 15 years of social insurance, then get 45%; After that, for every additional year of paying social insurance premium, 2% will be charged. The rate of enjoying the monthly pension is up to 75%.

Additional 1 day off on National Day September 2

From January 1, 2021, the Labor Code 2019 stipulates one additional holiday immediately before or after the National Day September 2, depending on actual conditions and regulated by the Government. During this day, the employee, even if he is off work, still receives his full salary.

In detail, in 2021, on the basis of the proposal of the Ministry of Labor, War Invalids and Social Affairs, the Government decided to have the next day off September 2 National Day is September 3, 2021. In case, cadres, civil servants, public employees and employees go to work on holidays, the salary is at least equal to 300%, excluding the salary for holidays and paid days off for employees enjoying daily salary.

Only 2 types of employment contracts remain

According to the Labor Code 2019, from January 1, 2021, a labor contract will include 2 types: an indefinite term and a labor contract with a term not exceeding 36 months.

Specifically, an indefinite term labor contract is a contract in which the two parties do not specify the term and the time of termination of the contract.

Definite-term labor contract is a contract in which the two parties define the term and the time of termination of the validity of the contract within a period not exceeding 36 months from the effective date of the contract.

Thus, the type of seasonal labor contract or a certain job with a term of less than 12 months will no longer be available from January 1, 2021.

Diversify payment methods – receive wages from employees

Regarding the form of salary payment, Article 96 of the Labor Code 2019 has added a number of new points: Employees and employers will agree on the form of salary payment. Previously, the employer had the right to decide on the form of payment. If the salary is paid via the employee’s personal account, the employer must pay the fees related to the account opening and salary remittance.

In addition, the employee can authorize others to receive salary. The law also supplements the principle of openly paying employees. Accordingly, each time the salary is paid, the employer must notify the payroll to the employee, clearly stating the salary for overtime work, night work, the content and the amount deducted (if any).

Expand the subject of the Labor Code

According to Article 13 of the Labor Code 2019, the concept of a labor contract has been specifically amended as follows: “An employment contract is an agreement between an employee and an employer on paid work, wages, working conditions, rights and obligations of each party in the industrial relations”.

The law also stipulates that, if the two parties agree for the contract by another name but have contents showing the paid employment, salary and the management, administration and supervision of one party, it is considered a labor contract.