Decree Implements Labor Code Affecting Foreign Workers
January 15, 2021
At a Glance
- By way of a new Decree, the Vietnamese government has clarified certain provisions of the new Labor Code, which will impact the issuance of Work Permits, Work Permit Exemption Certificates, Work Permit Extensions and Cancellations. The following changes, among others, will come into effect on February 15, 2021:
- Experts and specialists applying for Work Permits will need to have at least five years’ work experience and meet other requirements if they do not have at least a bachelor’s degree and at least three years’ work experience in a field relevant to the job position;
- Foreign nationals entering Vietnam for short-term assignments will not require a Work Permit if the assignment is less than 30 days per trip and does not exceed three times per year;
- Spouses of Vietnamese nationals will no longer require either a Work Permit or Work Permit Exemption Certificate to work in Vietnam; and
- Employers/host entities will need to report all foreign nationals who are exempt from work authorization to the government.
The situation
The Ministry of Labor – Invalids and Social Affairs (MOLISA) in Vietnam has issued its Decree implementing the Labor Code, which will result in new guidelines that impact the issuance of Work Permits, Work Permit Exemption Certificates, Work Permit Extensions and Cancellations.
A closer look
The following key changes, among others, will come into effect on February 15, 2021:
CHANGE | DETAILS | IMPACT |
Change in qualification documents for experts/specialists and technicians |
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The longer experience requirement for foreign workers who are lesser educated will make it more difficult for such applicants to work in Vietnam. |
Limited short-term assignments |
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Foreign nationals on short-term work trips will face a new entry limit on such trips. Frequent travelers and anyone who will need to work in Vietnam for more than 90 days should consult Fragomen for further assessment. |
Work authorization for spouses of Vietnamese nationals |
Spouses of Vietnamese nationals will no longer need to obtain either a Work Permit or a Work Permit Exemption Certificate to work in Vietnam. Instead, employers of spouses of Vietnamese nationals will need to file a report with the Vietnamese government at least three days before the start of the spouse’s work in Vietnam. |
Spouses should benefit from this rule as it eliminates the administrative requirements and costs associated with obtaining work authorization. The Immigration Department is expected to issue policies and clarifications for this category of foreign employee. |
New reporting requirement for foreign nationals exempt from work authorization |
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The current Decree does not provide the format or the procedures for submission of these reports. However, MOLISA is expected to issue further clarifying Circulars. |
Limited Work Permit renewals |
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It remains unclear as to whether foreign nationals who have applied for the maximum number of Work Permit extensions will need to apply for a new Work Permit or a reissuance. Fragomen is monitoring this closely and will report on any developments. |
Reporting of Work Permit termination |
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Employers will face yet another reporting requirement, adding to the administrative burden in the work authorization process. |
Background
The new Labor Code was drafted in 2019, approved in 2020 by the national assembly and took effect on January 1, 2021, with this latest Decree issued to implement the new Code. These revisions would be in line with the Vietnamese authorities’ typical timeframe for updating its rules on the management of foreign workers, which occurs every three to five years.
Though some of the new provisions in the Decree may seem restrictive against foreign workers on their face (and more onerous for employers), there are also more positive provisions as well. This may signal the government’s intentions to replace the previous rules with tighter guidelines while continuing to welcome foreign talent.
Looking ahead
It is likely that the MOLISA will continue to issue guidance to further clarify the provisions in the new Decree and in particular the limitation on work permit renewals, as well as the various reporting requirements.
We worked closely with Resident Vietnam in Vietnam to prepare this alert. This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].