Labor outsourcing company means an enterprise established in accordance with the Enterprise Law, Licensed for labor outsourcing operation, recruits, signs a labor contract with the employees, and then transfer the employee to work and be under the control of another employer while still maintaining the labor relationship with the Labor outsourcing company. So, what is the license for labor outsourcing operation? What are the conditions for the business of labor outsourcing? What are the procedures and applications for the license for labor outsourcing operation? The following article will focus on answering the above questions.
License for labor outsourcing operation (hereinafter referred to as “LO License”) is a type of sub-license granted to a labor outsourcing company, which is a mandatory condition for a company to operate in the field of labor outsourcing, issued by the (i) People’s Committee of the province where the company is located or (ii) Department of Labor – Invalids and Social Affairs (hereinafter reference as “Labor Department’’) (authorized by the People’s Committee) once the company fully meeting the conditions as prescribed by law.
LO License has a maximum term of 60 months, which can be extended many times. The LO License includes main information such as: Number of the license, Company information, its legal representative information, term of the license.
Conditions for granting LO License include conditions for the legal representative of the company and conditions for the deposit, specifically as follows:
2.1 Conditions for the legal representative of the company
The legal representative of the company performing labor outsourcing activities must ensure the following conditions:
The company must make a deposit of 2,000,000,000 VND (two billion Vietnamese Dong) to be granted a LO License.
The above deposit must be made at a commercial bank of Vietnam. Purpose: To ensure the salary payment, social insurance, health insurance, unemployment insurance, occupational accident insurance, occupational diseases insurance and other regimes for subcontracted employees as agreed in the labor contract, collective labor agreement, internal rules and regulations of the labor outsourcing company or paying compensation for employees in case the labor outsourcing company violates the labor contract or causes damage to the outsourced employees by failing to ensure the lawful rights and interests of the outsourced employees.
Application for the LO License includes:
Step 1: The company carries out the deposit procedure of two billion dongs at a commercial bank of Vietnam to be granted a certificate of deposit for labor outsourcing activities.
Step 2: After receiving the certificate of deposit for labor outsourcing, the Company submits a set of documents mentioned in section 3 of this article to the Labor Department to apply for a LO License.
Within 20 working days from the date of receipt of the valid application, the Labor Department shall consider and submit it to the Chairman of the People’s Committee to decide on issuance of the LO License.
If the application is invalid, within 10 working days from the date of receipt of the application, the Labor Department shall request the company in written to supplement the application.
Within 07 working days from the date of receiving the dossier submitted by the Labor Department, the President of the provincial People’s Committee shall consider and grant the LO License; in case the LO License is not granted, he/she have to issue a written reply to the company clearly stating the reason for not granting the LO License.
The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.