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License for labor outsourcing operation

License for labor outsourcing operation
License for labor outsourcing operation

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.

1. “License for labor outsourcing operation” means

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.

2. Conditions for the LO 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:

  • Being a company manager in accordance with the Law on Enterprises;
  • No criminal records;
  • Having worked directly as a specialist or manager in labor outsourcing or labor supplying field for 03 years (36 months) or more within 05 consecutive years before applying for a LO License.

2.2 Deposit

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.

3. Application for the LO License

Application for the LO License includes:

  • Written request for issuance of LO License.
  • Autobiographical curriculum vitae and criminal record (criminal record No.1 according to the law) of the company’s legal representative, issued within 6 months from the date of application submission.
  • One of the certified copies of the proof documents which is attestingthe legal representative’s working experience in the field of labor outsourcing or supply: Labor contract, work contract, recruitment decision, appoint and assign tasks decision; enterprise registration certificate (for the case of he/she being the legal representative of the labor outsourcing or labor supply company).
  • Certificate of deposit for labor outsourcing activities.

4. Issuance procedures of the LO License

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.

5. Notes

  • Labor outsourcing companies must ensure that they fully meet the conditions for labor outsourcing throughout the operation process.
  • The companies are only allowed to conduct labor outsourcing activities in the fields on the list of jobs that can be outsourced in Appendix II issued together with Decree 145/2020/ND-CP.
  • The companies must absolutely not let other businesses, organizations and individuals rent, borrow or use the LO License.
  • The companies must ensure the committed working conditions with the employees; notify employees of the contents of the labor subleasing contract; notify the employee’s curriculum vitae and the employee’s requirements; pay the employees not less than the salary of the employee of the labor sub-contractor with the same qualifications; Make records and periodically report to the Labor Department where the Company is located.

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.