Having concise information on how to hire and pay your employees is crucial to ensure the success of your company. This article will take you through the essentials of hiring an employee in Vietnam and the specifics of paying them.
Requirements to Start Hiring Labor
In recent years, the number of foreign employees arriving in Vietnam has significantly increased. The great majority of these personnel are foreign contractors’ personnel. With the latest regulations for foreigners who want to work in Vietnam, employers should also pay attention to the following aspects when recruiting foreign workers
To employ for various positions, the company must obtain approval before hiring foreign workers. The approval takes 30–40 days from the date of the application by the province’s President of the People’s Committee. The application must include the work permit dossier, which must be filed at least 15 days prior to the foreign employee’s start date.
To deal with the difficulties involved, many foreign corporations rely on recruitment outsourcing entities. Cekindo is a leading business process outsourcing company in the Vietnam labor market that takes care of finding a perfect candidate for employment at a client’s corporation.
Types of Contract Available for Foreign Employees
There is a set of implementing regulations for foreign nationals, notably Decree 152/2020/ND-CP, which primarily gives direction on subjects connected to work permits for foreign workers in Vietnam. The key provisions of the Labor Contract must be followed as prescribed by law. This also applies to multinational corporations who prefer to have their standard contracts in place for all of the jurisdictions in which they do business. Probation, indefinite, and definite labor contracts are all permitted alternatives under Vietnamese labor rules.
Specifics of a labor contract:
- For a foreign national, the contract may be bilingual (Vietnamese, followed by a translation into a foreign language).
- A labor contract, in general, takes effect on the date mentioned in the contract, and there are no filing requirements to effectuate the employment relationship.
- Within the territory of Vietnam, all transactions in contracts and agreements are required to be conducted in Vietnamese Dong.
Under Vietnam labor rules, the permitted types of labor contracts are Probation, Indefinite, and Definite labor contracts.
Probation: Parties can agree on a probationary period. The length of a probationary period is determined by the new employee’s qualifications, education, and job position, although it must not exceed the time limit set by legislation, which is either 6, 30, 60, or 180 days depending on the circumstances.
Definite Term Labour Contract: Parties can agree to definitive labor contracts for up to 36 months and twice in a succession. After probation, it’s typical to stay for a year.
Indefinite Contract: An indefinite term contract must be concluded after two definite term contracts in a row.
Minimum Wage Updated for 2021
In Vietnam’s urban areas where most foreigners do business such as Ho Chi Minh City, Hanoi, and Danang the minimum wage is currently 4,420,000VND and is expected to remain at this level into Q1 2021.
How Cekindo can help with Payroll and SHUI processing
Cekindo ensures compliance of both local and foreign employees with government laws and regulations, including minimum wage, employer obligations, payroll, SHUI (Social – Health – Unemployment – Insurance), taxes, social security, and work visa application.
It’s also worth noting that multinational firms are unable to directly employ Vietnamese or foreign employees. They’ll have to either form a local business or depend on middlemen. Cekindo helps these multinational firms in having a coherent hiring experience through its impeccable HR outsourcing services.