Vietnam's latest labour rule changes bring various benefits
to employees, but how will they affect companies doing business in
In late August, the Vietnam Business Forum arranged a dialogue with
the Ministry of Labor, Invalids and Social Affairs (MOLISA) to discuss pending and newly arisen
labour issues at the Annual Vietnam Business Forum 2016 in Hanoi,
Vietnam. Here are some of the key issues discussed and their impact
on doing business in the country.
1. Minimum salaries
According to the MOLISA, minimum salaries in certain working regions will be increased to
the range of VND180,000 to VND250,000 (approximately US$8 to US$12)
A new decree on the change will be issued soon; employers should
be aware of, and well prepared for, their human resources budget
2. Work permits for foreign employees
The government will soon issue a new circular for work permit
requirements. Currently, the concept of managers who are permitted
to work in the country is limited to the narrowly-defined
"managerial positions" under the Enterprise Law of Vietnam (EL). The result is
only a few people qualify for managerial positions.
Employers can expand the definition of 'managerial
position' in their charter or persuade the MOLISA (the issuing
body of work permits) to accept them as experts with one of the
Acknowledgment by company's
headquarters as an expert
Obtainment of a bachelors degree or
Having at least three years'
experience in the relevant industry.
In response to a request for additional overtime hours, the
MOLISA confirmed that the amended Labor Code will address this
issue. Specific overtime hours vary by industry and are subject to
agreements between employees and employers.
The change will bring more benefit to manufacturing companies,
especially in industries such as garments and construction, where
large amounts of overtime are accrued in peak seasons.
4. Social Insurance for foreign employee
From 1 January 2018 all employees with a labour contract term of
one month or more, including foreign employees, will be required to
pay the compulsory social insurance. However currently there is no
clear guidance regarding the implementation. At the time of
publishing, foreign employees working in Vietnam with a three-month
or more employment contract are subject to health insurance
According to the MOLISA, the government is negotiating with
other countries to allow foreign employees to include the
Vietnamese social insurance contribution period in their total
social insurance contribution time, so that the employees can enjoy
the benefit in their home countries.
Companies should take into account this type of payment when
calculating benefits payable to foreign employees, and when
developing their business plan for 2017.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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3.Courts are imposing larger fines and compensation for non-economic loss for contraventions of the Fair Work Act.
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