Issue of September 2023 – New points in regulations on employing foreign employees in Vietnam

Dear Valued Clients,

On September 18^th 2023, the Government issued Decree 70/2023/ND-CP (“Decree 70”) amending and supplementing a number of articles of the Government’s Decree No. 152/2020/ND-CP dated December 30^th, 2020 on foreign employees working in Vietnam, and recruitment and management of Vietnamese employees working for foreign employers in Vietnam (“Decree 152”). Decree 70 officially takes effect from the date of signing.

In this Legal Update, we would like to summarize and clarify the notable new points of Decree 70.

1. Change the time limit determination of demand for foreign employees

According to the provisions of Article 4.1(a) of Decree 152 amended and supplemented by Article 1.2 of Decree 70, for the determination of demand for foreign employees, at least 15 days before the date on which foreign employees are expected to be employed, the employer (except contractor) shall determine the demand for foreign employees for every job position for which Vietnamese employees are underqualified and send an explanation report to the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs of province where the foreign employees are expected to work, using Form No. 01/PLI Appendix I hereto appended.

During the process, in case of any change to the demand for foreign employees in terms of job position/job title, working mode, quantity of employees, working locations, the employer shall send a report to the Ministry of Labor, War Invalids and Social Affairs or Department of Labor, War Invalids and Social Affairs, using Form No. 02/PLI Appendix I attached with Decree 70 at least 15 days before the date on which the foreign employees are expected to be employed.

Thus, it can be seen that Decree 70 has shortened the time from 30 days to 15 days for determining of demand for foreign employees compared to Decree 152.

2. Cases the employer is not required to determine the demand for foreign employees

In addition to the change in time in determining the demand for foreign employees, Decree 70 also adds cases where the employer is not required to determine the demand for foreign employees. Previously, according to the provisions of Article 4.1(b) of Decree 152, there were 11 cases in which employers were not required to determine the demand for foreign employees in Vietnam. Including the case of foreign employees specified in Clauses 3, 4, and 5, Article 154 of the Labor Code 2019, and Clauses 1, 2, 8, 9, 10, 11, 12 and 13, Article 7 of Decree 152.

However, from September 18^th, 2023, Decree 70 has added 6 more cases in which employers are not required to determine the demand for foreign employees. Specifically, as follows: “ If the foreign employees fall under any case of clause 3, 4, 5, 6 and 8 of Article 154 of the Labor Code and clauses 1, 2, 4, 5, 7, 8, 9, 10, 11, 12, 13, and 14 Article 7 of this Decree, the employer is not required to determine the demand for foreign employees.”

Accordingly, Decree 70 has added 2 more cases in Article 154 of the Labor Code 2019. These are the following cases: (i) Is a foreign lawyer who has been granted a lawyer’s practicing certificate in Vietnam in accordance with the Law on Lawyers; and (ii) Gets married with a Vietnamese citizen and wishes to reside in Vietnam.

At the same time, Decree 70 has also added 04 cases in Article 7 of Decree 152 amended and supplemented by Article 1.4 of Decree 70. Specifically, the following cases:

• He/she enters Vietnam to provide professional and engineering consulting services or perform other tasks intended for research, formulation, appraisal, supervision, evaluation, management and execution of programs and projects using official development assistance (ODA) in accordance with regulations or agreement in international treaties on ODA signed between the competent authorities of Vietnam and foreign countries.
• He/she is granted a communication and journalism practicing certificate in Vietnam by the Ministry of Foreign Affairs as per the law.
• Volunteers means an unpaid foreign employee who voluntarily works in Vietnam to implement an international treaty to which the Socialist Republic of Vietnam is a signatory with certification of a foreign diplomatic mission or international organization in Vietnam.
• He/she is certified by the Ministry of Education and Training as a foreign employee entering Vietnam for the following purposes: (i) Teaching, research; and (ii) Acting as a manager, executive, principal, deputy principal of an educational institution, which is established in Vietnam under a proposal of a foreign diplomatic mission or intergovernmental organization.

Thus, up to now, there are 17 cases in which employers do not required to determine the demand for foreign employees in Vietnam.

3. Change the agency that issues approval documents for the employment of foreign employees

Previously, according to the provisions of Article 4.2 of Decree 152, the authority to approve or disapprove of employing foreign employees belonged to the Ministry of Labor, War Invalids and Social Affairs or the Provincial People’s Committee.

In Decree 70, the authority to approve the employing foreign employees has changed. Specifically, the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs shall issue a document specifying acceptable and unacceptable job positions for foreign employees, using Form No. 03/PLI Appendix I hereto appended within 10 working days after receiving an explanation report on demand for foreign employees or report on change thereof.[1]

4. Announcement of recruitment of Vietnamese employees to positions expected to recruit foreign employees on the Portal

From January 1^st, 2024, the announcement of recruitment of Vietnamese employees to positions expected to recruit foreign employees shall be made on the website of the Ministry of Labor, War Invalids and Social Affairs (Employment Department) or the website of the Employment Service Center, which is established by the President of the People’s Committee of province or centrally affiliated city (hereinafter referred to as province), within at least 15 days from the expected date of sending an explanation report to the Ministry of Labor, War Invalids and Social Affairs or the Department of Labor, War Invalids and Social Affairs where the foreign employees is expected to work.[2]

The recruitment announcement shall contain job position/job title, job description, the quantity of employees, required qualifications and experience, salaries, working time and location. After an unsuccessful attempt to recruit Vietnamese employees for positions that are expected to be filled by foreign employees, the employer is responsible for determining the demand for employing foreign employees in according to the law.

In case a foreign employee works for an employer in more than one province, within 3 working days from the date the foreign employee starts working, the employer must report electronically to the Ministry of Labor, War Invalids and Social Affairs and the Department of Labor, War Invalids and Social Affairs of province where the foreign employees comes to work according to Form No. 17/PLI Appendix I promulgated together with Decree 70.

5. Reunify the focal point for issuing work permits to foreign employees

According to Decree 70, the Ministry of Labor, War Invalids and Social Affairs is responsible for unifying the state management of recruitment, management of foreign employees throughout the country, as well as the management of Vietnamese working for foreign organizations and individuals in Vietnam.[3]

At the same time, this Decree has also deregulated issuance, re-issuance, extension and revocation of work permits and certification of exemption from work permits for foreigners working in industrial parks or economic zones of Decree No. 35/2022/ND-CP dated May 28^th, 2022 of the Government regulating the management of industrial parks and economic zones.[4]

Thus, the Department of Labor, War Invalids and Social Affairs will unify the management of foreign employees in the area according to the proposal of the previous the Ministry of Labor, War Invalids and Social Affairs.

It can be seen that, the unification of this work permit issuance focal point in the long term will ensure the unification of state management on recruitment and management of foreign employees working in Vietnam from central to local levels. At the same time, overcoming inadequacies in the issuance of work permits to units other than specialized agencies such as the Management Board of industrial parks and economic zones.

As usual, we hope you find this Legal Update helpful and look forward to working with you in the upcoming time.

ENT Law LLC

The full version of this Legal Update can be found here.

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[1] Article 1.2 Decree 70.

[2] Article 1.2 Decree 70.

[3] Article 1.11(a) Decree 70.

[4] Article 2.1 Decree 70.