IMPACT – MEDIUM

What is the change? Vietnam has issued a decree prohibiting representative offices of foreign companies established in Vietnam from directly recruiting Vietnamese employees.

What does the change mean? Representative offices of foreign companies must follow strict procedures for hiring Vietnamese employees through provincial government employment service centers established for that purpose, as well as file reports on recruitment and hiring of Vietnamese employees.

  • Implementation timeframe: Immediate and ongoing.
  • Visas/permits affected: The decree affects the recruitment and hiring of Vietnamese employees.
  • Who is affected: Foreign organizations with representative offices hiring Vietnamese employees.
  • Impact on processing times: The new procedures shorten the time from 30 days to 15 days for the employment service centers to respond to an employer’s request to hire a Vietnamese employee.
  • Business impact: The decree introduces new duties and reporting requirements on foreign companies.
  • Next steps: Foreign companies requiring Vietnamese employees should consult with their BAL attorney to fulfill the new procedures properly.

Background: The Vietnamese government issued Decree 75/2014/ND-CP on July 28. Under new procedures, government employment service centers at the provincial level will provide the sole avenue for the hiring of Vietnamese employees by certain foreign entities, including representative offices of foreign companies (RO), non-governmental organizations and non-profit organizations. The RO must initiate a demand to hire a Vietnamese worker by sending a written request specifying the number of candidates, required knowledge and skills, recruitment schedule and other details. Within 15 days, the service center must respond by introducing Vietnamese employees; if not, the RO may recruit Vietnamese employees directly. Within seven working days of signing a labor contract, the RO must send written notice and copies to the service center. ROs must also report their use of Vietnamese labor every six months annually or upon sudden request.

BAL Analysis: Previously, foreign entities were encouraged to go through the government agencies to recruit Vietnamese workers; now it is mandatory. Because the decree changes an earlier rule that allowed foreign organizations to directly recruit Vietnamese employees when those introduced by the service centers did not meet the criteria set by the employer, it is recommended that the employer’s job description and hiring criteria contain as much detail as possible.

This alert has been provided by the BAL Global Practice group and our network provider located in Vietnam. For additional information, please contact your BAL attorney.

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