Proposal for 10 priority groups to borrow capital to create jobs

The draft revised Law on Employment is being reviewed by the Ministry of Justice. A notable new point is that the Ministry of Labor, War Invalids and Social Affairs proposes to expand the scope of loans for job creation. In addition to traditional groups such as ethnic minorities and people with disabilities, the draft targets groups such as: caregivers of people with severe disabilities, households that have just escaped poverty, relatives of people with meritorious services, people in particularly difficult communes, people whose land has been recovered; young people after military service, police; young volunteers after the program ends and unemployed people.

To implement this policy, the state budget needs to subsidize interest rates and management fees for the Social Policy Bank to mobilize loan capital. If the current lending interest rate is 7.92%, to mobilize VND 10,000 billion for job creation loans, the budget needs to spend about VND 500 billion. This figure is equivalent to supporting the creation, maintenance and expansion of jobs for about 100,000 workers.

According to the drafting agency, expanding the priority areas will promote sustainable job creation, especially for the disadvantaged, contributing to stable economic development associated with ensuring social security. This solution also increases revenue for the state budget through maintaining, expanding, and promoting production and business.

In addition, this policy will contribute to reducing the rate of informal employment, sustainable development for all workers, promoting the right to work and social contributions of the elderly, contributing to ensuring social security goals and adapting to population aging.

According to the current Law on Employment, workers who are eligible for loans to support job creation must have full civil capacity; have a need to borrow capital to create jobs for themselves or attract more workers with confirmation from the competent authority or organization where the project is implemented. The borrower must legally reside in the locality where the project is implemented.

The current Employment Law was passed in November 2013 and took effect from January 1, 2015. This is the basis for developing policies to support workers, find jobs, access job and career information; improve the quality of human resources, develop vocational skills; and help unemployed people return to the labor market soon.

However, after nearly 10 years of implementation, some policies have many shortcomings. Regulations on labor registration and management, and on the age of workers are not consistent with the 2019 Labor Code. Regulations and policies on unemployment insurance are not consistent with the 2014 Social Insurance Law.

In the context of the fourth industrial revolution, the provisions of the law are not compatible with digital transformation and the application of information technology in employment services. The law lacks policies to encourage creative employment; sanctions to protect the rights of workers; and job transactions in the electronic environment.

According to the drafting agency, the amendment to the Law on Employment aims to improve the quality and transparency of employment services; balance labor supply and demand; and improve the technical expertise of unskilled workers. The draft law is expected to be submitted to the National Assembly for comments at the 8th Session (October 2024).