Vietnam Labour Law Update (June 2016)

On May 15, 2016, the Government issued Decree No. 37/2016/NĐ-CP (“Decree 37”) detailing the implementation of a number of articles of the Law on occupational safety and hygiene with regard to compulsory insurance for work-related accidents and occupational diseases. Accordingly, Decree 37 regulates a number of key issues as below:
1.    Applicable subjects:
1.1.    Employees:
Besides officials and public servants, Vietnamese employees working under labor contracts are subject to compulsory insurance for work-related accidents and occupational diseases including the following:
Persons working under indefinite-term labor contracts and labor contracts with a term of 03 months and longer; persons working under labor contracts with a term from 01 month to less than 03 months; salaried individuals who manage the enterprises; but domestic workers areexcluded.
For person working under labor contracts with a term from 01 month to less than 03 months, the requirementshall be applicable from January 01, 2018.

1.2.    Employers.

1.3.    Employees who have retired or no longer do jobs posing risks of occupational diseases.

2.    The contribution rate and the contribution method made by the employer:
On a monthly basis, the employer will contribute 1% of the employees’ payroll subject to social insurance contribution to the fund for work-related accidents and occupational diseases.
This provision replaces the provision on contributions to the fund for work-related accidents and occupational diseases regulated by the Law on social insurance and will take effect from July 1, 2016.
As such, the monthly total cost born by the employer for contributions for social insurance,  work-related accidents and occupational diseases is unchanged at 18%.
Changes to the regime for the employee:
Beside the entitlement to benefits provided by the Labor Code and the Law on occupational safety and hygiene, Decree 37 details and specifies more on the benefits which employees are entitled to for work-related accidents or occupational diseases.
Decree 37 will take effect from July 01, 2016.

This is not a formal legal document.
All information in this document is for reference and general guidance purposes only.

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