Legal Guide | Labor outsourcing services in Vietnam
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Labor outsourcing service is a conditional business line. In addition to being granted a specialized license (sub-license) to meet initial operating conditions, enterprises need to ensure compliance with relevant conditions during operation.
To ensure compliance with relevant laws, PLF would like to provide you with some notes as follows:
1. Scope of operation
Labor outsourcing is when an employee enters a labor contract with an outsourcing company, after which such an employee is assigned to work under the management of another employer who is a labor outsourcer. The employee still maintains an employment relationship with the labor outsourcing enterprise.
Labor outsourcing is a conditional business line that can only be performed by enterprises that have a license for labor outsourcing and applies to specific jobs.
1. 1. Labor outsourcing enterprises
Labor outsourcing enterprises are enterprises established under the Law on Enterprises, granted a Labor Outsourcing License, which subsequently recruited and entered into a labor contract with the employee, and then transferred this employee to work under the management of another employer (labor outsourcer) but still maintain an employment relationship with the labor outsourcing enterprise.
1.2. Labor outsourcer
Labor outsourcer is an enterprise, agency, organization, cooperative, household, or individual with full civil capacity, employing outsourced workers to do jobs according to the list of jobs permitted to be outsourced for a certain period of time. Specifically, the labor outsourcer will sign a service contract with the outsourcing enterprise.
1.3 Dispatched employee
is an employee with full civil capacity, recruited by the outsourcing enterprise and entered into a labor contract, then transferred to work under the management of the client enterprise.
2. License duration
The term of a labor outsourcing license is as follows:
- A license shall be valid for up to 60 months;
- A license may be renewed multiple times, each renewal must not exceed 60 months;
- The expiration date of a reissued license is the same as on the previously issued license.
3. License Re-issuance
The labor outsourcing enterprise must carry out procedures for re-issuance of the license in the following cases:
- Any of the following information on the license is changed: the dispatching agency’s name, headquarters address (but still in the same province), the legal representative;
- The license is lost;
- The license is so damaged that the information it contains is no longer sufficient;
- The headquarters are transferred to another province.
4. Rights and obligations of the outsourcing enterprise
Labor outsourcing enterprises have the following rights and obligations:
- Provide an outsourced worker who meets the requirements of the client enterprise and the employment contract signed with the employee;
- Inform the outsourced worker of the contents of the labor outsourcing contract;
- Provide the client enterprise with the curriculum vitae of the outsourced worker and his/her requirements;
- Pay the outsourced worker a salary that is not lower than that of a directly hired employee of the client enterprise who has equal qualifications and performs the same or equal work;
- Keep records of the number of outsourced workers, the client enterprise, and submit periodic reports to the provincial labor authority;
- Take disciplinary measures against the outsourced worker in cases where the client enterprise returns the employee for violations against labor regulations;
- Publicly post the original license at the headquarters and authenticated copies of the license at its branches and representative offices (if any). In case of relocation to another province, send an authenticated copy of the license to the Department of Labor, War Invalids and Social Affairs of the new location for monitoring;
- Promptly report the labor dispatch-related incidents to local authorities or at the request of labor authorities;
- Periodic reports: Every 6 months and annually, the enterprise shall report on the situation of the labor outsourcing according to the prescribed form.
- Deadline for reports:
- 6-month report sent before June 20; and
- Annual report submitted by December 20.
- Receiver:
- President of the provincial People’s Committee, Department of Labor – Invalids and Social Affairs where the enterprise’s head office is located; and
- Department of Labor, War Invalids and Social Affairs where the enterprise comes to conduct labor outsourcing in case the outsourcing enterprise operates in another province (if any).
- Deadline for reports:
5. Rights and obligations of the client enterprise
Client enterprises have the following rights and obligations:
- Inform and guide the outsourced worker to understand their internal labor regulations and other regulations.
- Do not discriminate between the outsourced worker and their directly hired employees with respect to working conditions
- Reach an agreement with the outsourced worker on night work and overtime work in accordance with the Labor Code.
- The client enterprise may discuss with the outsourced worker and the dispatch enterprise the possibility of officially employing the outsourced worker while their contract with the dispatch enterprise is still valid.
- Return the outsourced worker to the dispatch enterprise if they do not meet the agreed conditions or if they violate work regulations.
- Provide evidence of any work regulation violations by the outsourced worker to the outsourcing enterprise for disciplinary measures. Ensure there is no discrimination between the outsourced workers and the directly hired employees regarding working conditions.
6. Rights and obligations of the outsourced worker
In addition to the rights and obligations of employees in the Labor Code, the outsourcing employee has the following rights and obligations:
- Perform the work in accordance with the employment contract with the outsourcing enterprise.
- Obey internal labor regulations, lawful management, administration, and supervision by the client enterprise.
- Receive a salary which is not lower than that of a directly hired employee of the client enterprise who has equal qualifications and performs the same or equal work.
- File a complaint with the dispatch enterprise in case the client enterprise violates agreements in the labor outsourcing contract.
- Negotiate termination of the employment contract with the outsourcing enterprise in order to conclude an employment contract with the client enterprise.
7. Labor outsourcing rules
- The maximum duration of labor outsourcing is 12 months.
- The client enterprise may employ an outsourced worker in the following cases:
- Employment is necessary for the sharp increase in labor demand over a limited period of time;
- The outsourced worker is meant to replace another employee who is taking maternal leave, has an occupational accident or occupational disease, or has to fulfill his/her citizen’s duties;
- The work requires highly skilled workers.
- The client enterprise may not employ an outsourced worker in the following cases:
- The outsourced worker is meant to replace another employee during a strike or settlement of labor disputes;
- There is no agreement with the outsourcing enterprise on responsibility for compensation for the outsourced worker’s occupational accidents and occupational diseases;
- The outsourced worker is meant to replace another employee who is dismissed due to changes in organizational structure, technology, economic reasons, full division, partial division, consolidation, or merger of the enterprise.
- The client enterprise must not dispatch an outsourced worker to another employer and must not employ an employee dispatched by an enterprise that does not have the labor outsourcing license.
8. Labor outsourcing contracts
A labor outsourcing contract shall have the following major contents:
- The work location, the vacancy which will be filled by the outsourced worker, detailed description of the work, and detailed requirements for the outsourced worker;
- The labor outsourcing duration; the starting date of the dispatch period;
- Working hours, rest periods, occupational safety and health at the workplace;
- Responsibility for compensation in case of occupational accidents and occupational diseases;
- Obligations of each party to the outsourced worker.
9. Deposit
The deposit is used for the purpose of payment to the dispatched employee as agreed in the labor contract, collective labor agreement, internal rules, and regulations of the outsourcing enterprise including:
- Salaries;
- Social insurance, health insurance, unemployment insurance, occupational accident insurance;
- Payment of compensation to the dispatched employees in case the dispatching agency violates the employment contracts or causes damage to the dispatched employees due to failure to protect lawful rights and interests of the dispatched employees;
- Occupational disease and other benefits.
Payments shall be made in the following order of priority: salaries, social insurance, health insurance, unemployment insurance; occupational accident and disease insurance; other benefits for the dispatched employees under the employment contracts, collective bargaining agreement, rules and regulations of the dispatching agency.
10. Permitted works for labor dispatch
The list of 20 jobs to be performed for outsourcing includes:
- Interpreter/Translator/Stenograph
- Secretary/Administrative Assistant
- Reception
- Travel guide
- Sales support
- Project support
- Programming the production machine system
- Production and installation of television and telecommunications equipment
- Operation/inspection/repair of construction machinery and production power system
- Cleaning and sanitizing buildings and factories
- Editing of documents
- Bodyguard/Guard
- Marketing/Customer care over the phone
- Handling financial and tax issues
- Repair/Check the operation of cars
- Scan draw industrial engineering/Interior decoration
- Driving
- Management supervision operation repair maintenance and serving on board ships
- Management, supervision, operation, repair, maintenance, and serving on oil and gas rigs
- Aircraft piloting, aircraft service/Maintenance repair of aircraft and aircraft equipment /Dispatching flight operations/Flight supervision
Our expertise ensures seamless compliance with Vietnam’s labor laws, making your outsourcing experience smooth and legally sound. For further details or inquiries, you may contact PLF for support.
