The Law on Employment 2025 will officially take effect from 1 January 2026, introducing a number of significant changes to unemployment insurance policies. The new provisions focus on unemployment prevention, enhance flexibility in support schemes, and aim to better protect the rights and interests of employees in the context of a volatile labor market.

I. Legal basis

• Law on Employment 2025
• Law No. 74/2025/QH15
• Decree No. 293/2025/ND-CP

II. Policies providing support and expanding unemployment insurance benefits for employees in 2026

1. Expansion of the categories of persons subject to compulsory participation in unemployment insurance

Pursuant to Clause 1, Article 31 of the Law on Employment 2025, the following persons are subject to compulsory participation in unemployment insurance. Specifically, this includes individuals working under:

• Indefinite-term labor contracts;
• Fixed-term labor contracts with a term of at least 01 month (instead of at least 03 months as previously prescribed);
• Part-time employees receiving wages at or above the statutory minimum wage;

Salaried managerial positions, including:

• Enterprise managers and controllers;
• Members of the Board of Directors, General Directors, Directors, and capital representatives;
• Members of the Supervisory Board or controllers of cooperatives and cooperative unions, etc.

2. Shortening the time for processing and granting unemployment allowance benefits

Under the Law on Employment 2025, the commencement date for unemployment allowance entitlements is calculated from the 11th working day from the date on which a complete and valid application dossier is submitted, instead of the 16th working day as previously prescribed. As a result, employees are able to access financial support more promptly during periods of hardship.

3. Adjustment of the maximum level of unemployment allowance benefits

The Law on Employment 2025 maintains the existing formula for calculating unemployment allowance benefits, while introducing a new, clearly defined maximum cap and re-specifying the benefit duration in a more detailed and explicit manner.

Pursuant to Clauses 1 and 2, Article 39 of the Law on Employment 2025:

Monthly unemployment allowance benefit = 60% of the average monthly salary on which unemployment insurance contributions were paid for the most recent 06 months.

The maximum monthly unemployment allowance shall not exceed five (05) times the regional minimum wage applicable in the last month for which unemployment insurance contributions were paid.

The duration of entitlement shall be determined as follows:

• From 12 months to under 36 months of contribution: entitlement to 03 months of unemployment allowance;
• Thereafter, for each additional full 12 months of contribution: entitlement to 01 additional month of allowance;
• The maximum entitlement period shall not exceed 12 months of unemployment allowance.

4. Changes to the conditions for entitlement to unemployment allowance effective from 01 January 2026

Pursuant to Clause 1, Article 38 of the Law on Employment 2025, four conditions are prescribed for entitlement to unemployment allowance benefits, of which the condition regarding the contribution period is as follows:

• Having paid unemployment insurance contributions for at least 12 months or more within the 24 months preceding the termination of the labor contract;
• In the case of employees working under fixed-term labor contracts with a term from 01 month to under 12 months, unemployment insurance contributions must have been paid for at least 12 months within the 36 months preceding the termination of the labor contract.

Prior to 01 January 2026: Point b, Clause 1, Article 49 of the Law on Employment 2013 (Law No. 38/2013/QH13) provides as follows:

“Having paid unemployment insurance contributions for at least 12 months or more within the 24 months preceding the termination of the labor contract …”

Accordingly, the Law on Employment 2013 did not distinguish between types of labor contracts nor specify separate assessment periods for short-term labor contracts, resulting in uncertainty in its application to employees working under contracts with a term of 01 to 03 months.

5. Unemployment Insurance contribution rate

The Law on Employment 2025 only stipulates a maximum contribution rate of 1% and assigns the Government to prescribe the specific contribution rates. According to the draft Decree, the unemployment insurance contribution rate remains 1% of the employee’s monthly salary for employees and 1% of the monthly payroll fund of employees participating in unemployment insurance for employers.

The maximum monthly salary used as the basis for unemployment insurance contributions remains equal to twenty (20) times the regional monthly minimum wage. From 01 January 2026, the new regional monthly minimum wages prescribed under Decree No. 293/2025/ND-CP will be applied, resulting in an increase in the cap on unemployment insurance contributions. Accordingly, employees whose monthly salaries exceed the current contribution cap will incur additional unemployment insurance contributions from 01 January 2026.

6. Employees are permitted to change the location where unemployment allowance benefits are received

Pursuant to Clause 1, Article 41 of Law No. 74/2025/QH15, an employee currently receiving unemployment allowance benefits is entitled to change the location for receiving such benefits upon demand.

This means that if an employee changes his or her place of residence from one province/city to another locality, he or she is entitled to request a transfer of the place for continuing to receive unemployment allowance benefits.

Such transfer of the benefit-receiving location does not interrupt the payment of unemployment allowance, provided that the employee complies with the prescribed procedures.

The Law on Employment 2013 contains no provisions permitting employees to change the location for receiving unemployment allowance benefits. However, pursuant to Article 22 of Decree No. 28/2015/ND-CP, where an employee has a need to change the place of receiving unemployment allowance benefits, he or she must have received at least one (01) month of unemployment allowance at the location previously registered for such benefits.

III. Conclusion

The Law on Employment 2025, effective from 01 January 2026, marks an important step in completing and strengthening the legal framework on employment and unemployment insurance, by expanding coverage, enhancing the level of protection, and better safeguarding the lawful rights and interests of employees. The new provisions not only address the shortcomings of the Law on Employment 2013, but also clearly reflect a policy orientation toward unemployment prevention and timely, flexible support in response to fluctuations in the labor market.

The expansion of the categories of persons subject to compulsory unemployment insurance, the shortening of the processing time for benefits, the adjustment of entitlement conditions and benefit levels in a more transparent and specific manner, along with the provision allowing the transfer of the location for receiving unemployment allowance, all contribute to enhancing the accessibility and humanitarian nature of the policy. At the same time, the mechanism for determining contribution rates and the contribution ceiling linked to the new regional minimum wages ensures alignment with the actual salary and income levels of employees in the forthcoming period.

Accordingly, from 01 January 2026, both employees and employers are required to proactively review, update, and fully comply with the new provisions of the Law on Employment 2025 as well as its implementing regulations, in order to ensure proper fulfillment of legal obligations and effectively exercise the rights to unemployment insurance benefits as prescribed by law.

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