Scenario: the HR department of a garment company with 400 workers — 60 on seasonal 1–2-month contracts — has just been told by the social insurance agency: from 2026, these short-term workers must join unemployment insurance. The amended Employment Law, effective 01/01/2026, brings changes every employer must apply from the first payroll of the year.
1. Expanded coverage: contracts of 1+ months join UI
The widest-reaching change: employees with labour contracts of at least 1 month are compulsorily covered by unemployment insurance — replacing the previous 3-month threshold. Direct consequence: seasonal workers, extended “probation” styled as short contracts, 1–2-month project staff — previously outside the net — must now contribute. Employers must audit the full headcount, especially short contracts, and adjust contracting + social-insurance declaration processes for the January 2026 payroll.
2. Contribution rate: capped at 1% of monthly payroll
The amended law caps the unemployment insurance contribution at 1% of the monthly wage fund (employee and employer shares set by the Government within this cap). Employers must update payroll parameters: for newly covered 1–3-month workers the per-head cost is small, but across hundreds of seasonal workers it is material in the 2026 HR budget. Also re-check the contribution base — still the monthly wage used for compulsory social insurance.
3. Shorter waiting period: benefits from the 11th working day
The UI waiting period is shortened: benefits start from the 11th working day after a complete claim dossier is filed (previously 15 working days). This shrinks the income gap for the unemployed — and for employers raises the stakes of timely book-closing and dossier handover: employer delays now “cost” workers more, as they lose earlier benefit days. Offboarding processes must be tightened accordingly.
4. Benefit cap: 5 times the regional minimum wage
Maximum UI benefit is set at 5 times the regional minimum wage — tied to Decree No. 293/2025/ND-CP on 2026 minimum wages (Region I: VND 5,310,000). High earners need clear communication to avoid false expectations (“pay more, get more” is wrong — there is a ceiling). For employers, the cap is an input when designing voluntary severance top-ups: company-funded extras beyond UI should be structured to avoid wasteful overlap.
5. Compliance checklist for the January 2026 payroll
One, list every worker on contracts of 1+ months — add UI declarations for the 1–3-month group. Two, update the contribution parameter (max 1%) in payroll systems. Three, tighten book-closing/social-insurance handover on termination (the waiting period is shorter). Four, communicate the new rights internally — especially short-term workers covered for the first time. Five, check the original text of the amended Employment Law and its guiding decrees before applying — this article synthesises reputable press sources as of the writing date; clause-level detail needs the original text.
Frequently Asked Questions
Must 1-month contracts pay UI from 2026?
Yes. From 01/01/2026, employees on labour contracts of at least 1 month are compulsorily covered by UI (previously the threshold was 3 months). Employers must declare and contribute for these short-term workers too.
What is the maximum UI contribution rate?
The amended law caps it at 1% of the monthly wage fund; the specific employee and employer shares are set by the Government within this cap.
How long is the new UI waiting period?
Benefits start from the 11th working day after filing a complete dossier (shortened from 15 working days). Employers must close and hand over social-insurance books on time so workers lose no benefit days.
What is the maximum UI benefit?
Five times the regional minimum wage (tied to Decree No. 293/2025/ND-CP: Region I in 2026 is VND 5,310,000). High earners should note the ceiling — it is not “pay more, get more”.
This article has been quality-reviewed by the FLAW AI Legal Council