What is Decree 152?
Vietnam’s new Labor Code (the Labor Law 2019) came into effect on January 1, 2021. They introduced several what appeared to be more subtle changes to previous labor laws as applicable to foreign employees.
To implement the new Labor Law, the authorities in Vietnam released two Decrees – Decree 145 (145/2020/ND-CP) that deals with most elements of the law and Decree 152 (152/2020/ND-CP) that covers foreign employment matters on the law (inbound and outbound) such as work permits.
However, when implementing foreign employment matters in Vietnam, Decree 152 has resulted in significant implementation issues for foreign employees and their employers.
Decree 152 came into force on February 15, 2021. Since this date, the business community in Vietnam has raised a growing list of issues in meeting their needs with foreign experts, the Ministry, and the relevant Provincial Departments.
Key Notable Aspects in Decree 152:
- Under Decree 152, the Vietnamese government issued Resolution 105/NQ-CP on September 9, which helped support businesses adversely affected due to the pandemic.
- Apart from helping businesses, this Resolution includes easing regulations for issuing, extending, and certification documents for foreigners’ work permits in Vietnam.
- Vietnam welcomed Resolution 105/NQ-CP as a change from the strict requirements of Decree 152, which went into effect in February of 2021.
- Nevertheless, it is advisable that employers must study the new regulations carefully to ensure they comply or face strict penalties.
Apart from helping businesses, the Resolution 105/NQ-CP has issued guidelines on easing regulations for
- Extending, and
- Certification documents for foreigners’ work permit in Vietnam.
This has relaxed some measures in Decree 152, which was issued earlier in February 2021.
Decree 152 Highlights
Before this, the government introduced Decree 152/2020/ND-CP (Decree 152), implemented on February 15, 2021. The Decree overlooks
- The management of foreign workers in Vietnam
- The hiring of local employees employed by foreign businesses.
Decree 152 has replaced Decree 11 and Decree 75 and stated
- How companies could employ foreign individuals and
- When several companies voiced concerns about hiring foreign employees and their entry.
Employers that hire a foreign employee must submit a written request to
- The Ministry of Labor
- War Invalids
- Social Affairs (MoLISA)
An employer must make a written request (employment contract) 30 days before the commencement of employment, and a response is ideally received within 10 days after a written request is submitted.
The employer should request a work permit from the MoLISA after confirmation. A work permit must ideally be requested 15 days before the foreign worker commences employment. Processing time for a work permit in Vietnam takes 10 business days. A work permit cannot be used directly by the workers/foreigners but with their employers.
What are the key changes and issues arising from Decree 152?
The “4-year” rule
Decree 152 introduces a concept that a Work Permit (valid for up to 2 years) can only be renewed once, i.e., a maximum of 4 years. The foreign employee is then required to start the process again.
The implication from the authorities under Decree 152 is that 4 years is the maximum period that a foreign employee is ideally needed in a Vietnamese business.
Work Permits under the old Decree will be treated as irrelevant under Decree 152. This ideally results in an inability to renew an expiring Work Permit issued under the old Decree. A new Work Permit with new supporting documents is required to be submitted.
With the new Decree is in place, the process for obtaining a new Work Permit can take considerable time. In such cases, foreign documents may not be easy to obtain due to border closures, which creates a significant issue for employees with expiring documents.
Previous professional experience for work permits in Vietnam no longer counts: An essential element of current (and previous) Decrees is “relevant professional experience.”
Previously, employees could prove this via legalized/notarized letters from previous employers or by using previously issued Vietnamese Work Permits.
Under Decree 152, authorities no longer accept previous Vietnamese Work Permits or other Vietnamese documentation as proof of professional experience.
Focus on relevant degrees
Although this is not a significant change from previous laws, there is a strict interpretation of requiring employees to hold a Bachelor’s Degree specifically relevant to the role being applied or hired for. This presents a significant problem for those professionals who changed careers.
It is a more significant problem for those who hold existing work permits. Still, they no longer meet the education requirements under the current interpretations due to needing to reapply for new Work Permits.
Reason for a foreign employee
There is a stricter “why” foreign employees are needed in Vietnam.
Although this is understandable to ensure that foreign individuals do not take jobs that Vietnamese nationals can fill; however, enforcing this makes the employment process more challenging to meet the requirements and shifts the goalposts considerably.
However, an exception is that foreign individuals married to a Vietnamese national can easily access the new exemption from a Work Permit.
Note: the employer still must approve that a foreign individual is required for the role.
Some work permit requirements eased: Resolution 105
To ease restrictions under Decree 152, the government has asked the Ministry of Labor, Invalids and Social Affairs (MoLISA) to instruct local and provincial authorities to relax restrictions and some conditions on issuing and renewing work permits.
- The university degree had to be related to the job position in Vietnam: With Resolution 105, authorities have been requested to be flexible where the degree does not necessarily have to be related to the job position in Vietnam.
- It is not mandatory for the training field does not have to be related to the job role or relevant experience.
- Previously issued work permits can be accepted as work experience for experts and technicians working in Vietnam, although certificates may also be used.
- Foreign employees with valid work permits can be sent to another province or city in Vietnam for not more than 6 months without reapplying for a new work permit.
However, the employer must report to the foreign employee’s labor department.
- The Ministry of Education and Training has been tasked with cooperating with MoLISA to provide guidance and qualifications for foreign teachers teaching at
- Short-term training centers
- High schools
- Vocational training centers
- Universities as per international best practices.
Additionally, notarization requirements for passports have been removed. Submission of just a copy of the passport will suffice.
The government has also tasked relevant agencies that help in streamlining entry procedures for foreign employees to enter Vietnam and recognize a valid passport. The government has issued further guidance on these issues.
The impact of the above is that many foreign professional individuals need to leave Vietnam before their visas/temporary resident cards expire due to
- Expiring Work Permits
- The insufficient documents for renewing work permits for foreign employees
Vietnam to Loosen Work Permit Rules for Foreigners
The Vietnamese government issued Resolution 47, intended to improve foreign employees’ working conditions in Vietnam.
Resolution 47 provides that technicians and experts can show either of the following:
- That they meet “specialist training qualifications” or
- Minimum work experience of 5 years
Foreign employees employed as teachers can qualify with college-level degrees and be “professional teachers” but not experienced.
The authorities issuing and validating work permits will still have discretion in cases such as
- Deciding what qualifies as a professional qualification
- An experienced teacher.
Still, Resolution 47 appears more reasonable concerning work experience requirements.
Decree 102 for foreign employees took effect in Vietnam. It requires employers to prove that they need to hire foreign workers. The decree also reduced the validity of work permits for a broad category of foreign workers. Many foreign companies saw this move as potentially exacerbating the shortage of skilled workers.
Furthermore, the decree requires that work permit applicants have
- A four-year university degree in their specific employment field
- Five years of experience in the same area.
Circular 03/2014, implemented in March 2014, further specified that foreign general managers and CEOs need documents to certify their positions to get a work permit. This can be through contracts, promotion decisions, or certificates from their firm.
Specialists must comply with the rule mentioned above. However, technical employees are required to have
- Training for technical jobs for a minimum of one year
- A minimum of three years of specialized work experience in the field of work
Decree 152 outlines the following definitions.
- Having at least 3 years of experience working in the relevant field to the job position with a bachelor’s degree or higher
- Work experience of 5 years or above with a practicing certificate relevant to the job
- Exceptional cases fall under the discretion of the Prime Minister as per the MoLISA
A manager is defined as
A person in charge of the organization.
An executive is defined as
An employee directly administers affiliated entities of the employer.
- An employee that has been training in a technical field for a minimum of 1 year and has been working for a minimum of 3 years in their trained field; OR
- Has at least 5 years experience related to the job for which they will be employed in Vietnam