Employees will be eligible for severance pay if their labor contract is terminated due to objective reasons (such as natural disasters, pandemics, etc.,) or subjective reasons (financial hardships). Therefore, how will the employee’s severance pay change from July 1, 2022?
1.The employee’s salary upon ceasing work from July 1, 2022
Employees will be paid in full according to the labor contract if they have to leave their work due to employers’ faults.
On the contrary, employees will not receive this pay if their termination was the result of their faults.
In case other employees working in the same unit have to leave their job, they will be paid according to their agreement with their employer, but this amount is not less than the minimum wage.
Employers can negotiate with their employees about dismissal wage when employees’ stoppage is caused by: an electrical accident that is not the fault of employers; natural disasters, epidemics, enemy sabotages, relocations at the request of state policies, or economic reasons.
+ In case of stopping work for 14 working days or less: Employees can receive a discontinuance wage which is not lower than the minimum wage;
+ In case of stopping work for more than 14 working days: The salary for cessation of working will be agreed upon by both parties, but it cannot be lower than the minimum wage in the first 14 days.
2. From July 1, 2022, the regional minimum wage is regulated as follows:
+ Region I: monthly minimum wages will be 4.680.000 VND per person; hourly minimum wages will be 22.500 VND per person
+ Region II: monthly minimum wages will be 4.160.000 VND per person; hourly minimum wages will be 20.000 VND per person
+ Region III: monthly minimum wages will be 3.640.000 VND per person; hourly minimum wages will be 17.500 VND per person
+ Region IV: monthly minimum wages will be 3.250.000 VND per person; hourly minimum wages will be 15.600 VND per person
Thus, severance pay will be negotiated between employers and employees, but this amount will not be less than the regional minimum wage that takes effect on July 1.
(Based on: Article 99 of the 2019 Labor Code; Clause 5, Article 58 of Decree 145/2020/ND-CP; Article 3 of Decree 38/2022/ND-CP).
