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Labor Ministry Proposes $843m Bailout Package for Businesses Affected by Covid-19

According to the proposal, workers and businesses are able to borrow money from the government to alleviate the impact of the Covid-19 pandemic on employee livelihood and small business operation.

Specifically, the Ministry of Labour, Invalid and Social Affairs proposes that an employee can borrow up to VND100 million (US$4,200) and small business can borrow up to VND2 billion (US$84,470). The interest rate is 3.96% annually and the debt should be paid off within a year, Vietnam+ reports.

The total package for this initiative costs VND20 trillion (US$843 million). If the proposal is passed, the program will last from April until December this year.

Businesses that are eligible for borrowing money fall into two types. The first includes ones that have at least either 30% of employees or at least 100 employees temporarily off work due to the pandemic. This fund can then be used to pay salaries, social, health and unemployment insurance for workers. The interest of the loans can be covered by the state budget for three months at most.

The second type of businesses eligible for the package consists of ones that have to let go of at least 10% of their workers or at least 50 employees. The money then can be used to cover employees' job-loss allowance.

According to the news source, employees who lose their job because their workplace goes bankrupt will receive the job-loss allowance. According to Nguoi Lao Dong, by March 26, 153,000 workers who became unemployed during this period have applied for the job-loss allowance. The majority of them used to work in fields like tourism services, accommodations, F&B, textile and transportation.

Besides the above suggested solutions, the ministry also proposed a temporary exemption from paying unemployment insurance and social insurance, and increase support in skills training to help workers keep their job.