Issue 020322 – Regulations on Vietnamese employees working abroad under contracts pursuant to Decree 112/2021/ND-CP

Dear Valued Clients,

On December 10, 2021, the Government issued Decree 112/2021/ND-CP guiding the Law on Vietnamese employees working abroad under contracts (“Decree 112”). Decree 12 takes effect from January 1, 2022, replacing Decree 38/2020/ND-CP (“Decree 38”), which has added regulations related to the conditions that service enterprises need to meet in some cases and those related to the deposit payments of service enterprises and employees when working abroad, and etc. in order to ensure the interests of employees working abroad under contracts. This Legal Update shall focus on the new keypoints of Decree 112 compared to Decree 38.

Concretize the conditions for sending employees working abroad in some cases

According to the law, enterprises providing services of sending Vietnamese employees working abroad under contracts (“Service Enterprises”) must satisfy the conditions specified in Article 10 of the Law on Vietnamese employees working abroad under contracts (“Law No. 69/2020/QH14”)[1]. In addition, in some specific cases below, the Service Enterprise needs to meet additional conditions:

Conditions for sending domestic helpers working abroad[2]:

Currently performing a contract to send Vietnamese employees to work in the receiving country;

a) Having a sufficient number of professional staff to carry out the activities and meet the following criteria:

b) Having at least 01 professional staff engaged in the search and development of foreign labor market with foreign language ability suitable to the receiving country and at least 01 year of experience in recruiting Vietnamese employees to work in the receiving country;

c) Having at least 01 permanent professional staff abroad to perform labor management activities, having foreign language ability suitable to the receiving country and at least 01 year of experience in sending Vietnamese employees to work in the receiving country;

d) Having at least 01 professional staff conducting orientation education activities with at least 01 year of experience in sending Vietnamese employees to work in the receiving country.

e) To ensure that the employees who have experience as domestic helpers abroad or have knowledge of domestic work and foreign language skills meet the requirements of the foreign labor-receiving party under the guidance of the Ministry of Labor, Invalids and Social Affairs.

Conditions for sending employees working in Taiwan, Japan[3]:

a) Having a sufficient number of professional staff to carry out the activities and meet the following criteria:

• • Having at least 01 professional staff performing activities of searching and developing the foreign labor market with Chinese language ability of at least HSK5, Japanese of at least N2 (JLPT standard) or equivalent;
  • Having at least 01 professional staff in charge of employee management activities with at least HSK5 proficiency in Chinese, at least N2 in Japanese (JLPT standard) or equivalent and at least 01 year of experience in sending Vietnamese employees to work in Taiwan, Japan;
  • Having at least 01 professional staff conducting orientation education activities with at least 01 year of experience in sending Vietnamese employees to work in Taiwan, Japan.

b) Not be sanctioned for violations of the law in the field of Vietnamese workers going to work abroad under contracts for a period of 2 years from the date of requesting the Ministry of Labor, Invalids and Social Affairs to introduce them to the competent authority of Taiwan (For case of sending employees to Taiwan);

c) Meet the standards for Service Enterprises that send Vietnamese employees to work in Japan according to the agreement between the Ministry of Labor, Invalids and Social Affairs and the competent authority of Japan (For case of sending employees to Japan).

Increase the deposit amount for Service Enterprises

Pursuant to Article 23 of Decree 112, a Service Enterprise shall deposit VND 2,000,000,000 (two billion Vietnam Dong) at a bank or foreign bank branch legally established and operating in Vietnam[4]. Compared with the old regulations, the deposit amount applied was VND 1,000,000,000 (one billion Vietnam Dong)[5].

In addition, a Service Enterprise that assigns a branch to perform service activities of sending Vietnamese employees working abroad under a contract must make an additional deposit of VND 500,000,000 (five hundred million Vietnam Dong) with each assigned branch[6].

For a Service Enterprise that sends Vietnamese employees abroad for training and skill improvement, it must place a deposit equal to 10% of an economy-class air ticket from the foreign workplace to Vietnam which is calculated according to the number of employees working abroad under the internship contract[7].

Regulations on the ceiling deposit of employees

The Service Enterprise and the employee shall agree on the Deposit Receiving Bank in which the deposit amount must not exceed the ceiling level specified in Appendix II issued together with Decree 112 and must be clearly stated in the contract of sending the Vietnamese employees working abroad as follows[8]:

a) For all markets, employees working as crew members of offshore fishing vessels and transport vessels: no deposit;

b) Other industries and occupations:

• • Taiwan market (China): the ceiling deposit level is 12 million Vietnam Dong;
  • Korean market: the ceiling deposit level is 36 million Vietnam Dong;
  • Japanese market, countries in the Americas, Southeast Asia, Middle East: deposit is not required;
  • For other countries and regions, other industries and professions: the ceiling deposit level is an equivalent to the value of 1 economy class air ticket from the foreign workplace of employees to Vietnam.

The deposit is only made after the Service Enterprise and the employee sign a contract to send the Vietnamese employee working abroad, and the employee has been accepted by the foreign party to work or granted a visa to enter the country or working region.

Cases where Service Enterprises and employees are refunded the deposit

Service Enterprises may receive their deposit back in the following cases[9]:

a) The enterprise fails to submit an application for a license to operate the service of sending Vietnamese employee working abroad under the contract;

b) The enterprise is not granted a license to operate the service of sending Vietnamese employees working abroad under the contract, or the enterprise has deposited a deposit in another account and requests the settlement of the previously deposited account, or Service Enterprises have been dissolved according to regulations;

c) The enterprise has fully performed its obligations in the service of sending Vietnamese employee working abroad after submitting the license or having its license to send Vietnamese employee working abroad under the contract;

d) The service enterprise ceases to assign the task of sending Vietnamese employee working abroad to the branch or branch that terminates its operation.

The employee’s deposit is refunded in the following cases[10]:

a) The employee completes the contract or terminates the contract to send Vietnamese employees working abroad before the term of contract without causing damage to the enterprise;

b) The employee unilaterally terminates the contract when the employer is abusive, forced to work or has a clear and direct threat to life, health or is sexually harassed during the time working abroad;

c) The employee has paid the deposit but the enterprise cannot send the employee working abroad within the committed time or the time limit for waiting for exit has expired and the employee no longer needs to work abroad;

d) Cases where the employee does not cause damage to the enterprise;

d) The balance of the employees’ deposit remained after compensating for damage incurred to the enterprise due to the employee’s fault under the Contract for sending Vietnamese employees working abroad.

Cases of Service Enterprises having their license to send employees working abroad revoked

Service Enterprises shall be revoked their license to send employees working abroad in the following cases[11]:

When the competent police agency or agencies having authority to issue the originals of the papers in the application file for the license provide a document to confirm that the contents in the application file for the license is falsified.

In case the Service Enterprise fails to maintain the conditions for the issuance of the license to send employees working abroad under the contract[12] or commits prohibited acts[13] in the field of sending Vietnamese employees working abroad under the contract or cause serious material and spiritual damage to employees as a result of its failure to fully perform the obligations specified in the Law No. 69/2020/QH14[14].

Where the Service Enterprise fails to send Vietnamese employees working abroad for 24 consecutive months, but not because of natural disasters, epidemics, wars, political instability, economic recession or due to other force majeure reasons resulting in the foreign party’s refusal to accept the employees.

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

Kind regards,

ENT Law LLC

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

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[1] Article 10.1 of the Law No. 69/2020/QH14:

“An enterprise shall be granted a license to provide the service of sending Vietnamese employees working abroad under contracts when it fully meets the following conditions:

• Having a charter capital of 05 billion VND or more; whose owners, all members and shareholders are domestic investors in accordance with the Law on Investment;
• Deposited as prescribed in Article 24 of this Law;
• Having a legal representative who is a Vietnamese citizen, having a university degree or higher and having at least 05 years of experience in the field of sending Vietnamese workers employees working abroad under contracts or employment services; are not subject to criminal prosecution; have no previous convictions for one of the crimes of infringing upon national security, crimes of infringing upon human life, health, dignity and honor, fraud, appropriation of property, crime of abusing trust and appropriate property, false advertising, deceiving customers, organizing or brokering for others to illegally exit, enter or stay in Vietnam, organize or broker for others to escape abroad or illegally staying abroad, the crime of forcing other people to flee abroad or stay abroad illegally;
• Having a sufficient number of professional staff to perform the contents specified in Article 9 of this Law;
• Having physical facilities of the enterprise or being hired by the enterprise stably to meet the requirements of orientation education for Vietnamese workers to work abroad under contracts;
• Having a website”.

[2] Article 20 of Decree 112.

[3] Article 12, 15 of Decree 112.

[4] Article 23.1 of Decree 112:

“The enterprise makes a deposit of VND 2,000,000,000 (Two billion Vietnam Dong) at a bank, foreign bank branch lawfully established and operating in Vietnam (hereinafter referred to as the “Deposit Receiving Bank)”.

[5] Article 10 of Decree 38.

[6] Article 23.2 of Decree 112.

[7] Article 26.2 of Decree 112.

[8] Article 29 Decree 112.

[9] Article 25.3 of Decree 112.

[10] Article 32.1 of Decree 112.

[11] Article 10 of Decree 112.

[12] Article 10 of the Law No. 69/2020/QH14.

[13] Article 7. (1, 2, 5, 6, 7, 8, 11, 12, 13) of the Law No. 69/2020/QH14.

[14] Article 26.2(c, e, g, h, i) of the Law No. 69/2020/QH14.