Labor Dispatch in Vietnam: What Businesses Need to Know

May 13, 2024

HR & Payroll

Labor Dispatch in Vietnam: What Businesses Need to Know

In certain situations, businesses operating in Vietnam may consider using a labor dispatch arrangement to address workforce needs. This practice involves contracting with a specialized labor dispatch enterprise to send employees to temporarily work under the management of your company. Understanding the legal framework governing labor dispatch is essential for compliant operations.

Table of Contents

What is Labor Dispatch?

Under Vietnamese law, labor dispatch refers to a situation where a worker has an employment contract with a labor dispatch enterprise but is sent to work for another employer (the hiring party). The dispatched worker remains an employee of the dispatch enterprise while performing tasks under the supervision of the hiring party.

Restrictions and Permitted Uses

Labor dispatch is not a universal solution. It is a conditional business sector, requiring the following:

Licensing and deposit: Labor dispatch enterprises must pay a deposit and have a Labour Dispatch License.
Designated Jobs: Only certain types of work, outlined in Decree No. 145/2020/ND-CP, are eligible for labor dispatch. Include:

Translation and interpretation providers
Secretarial and administrative assistants
Receptionists
Travel guides
Sales support staff
Project support staff
Machine programmers
Television and telecommunications manufacturing and installation
Operation, inspection, and/or repair of construction machinery and power production systems
Buildings and factory cleaners
Document editors
Security/bodyguards
Telemarketers and customer care phone support
Financial and tax support services
Car repair and inspection
Scanning, drawing industrial engineering, Interior decorating
Driving
Management, operation, maintenance, and service on ships
Management, supervision, operation, repair, maintenance, and service of oil and gas drilling rigs
Flying aircraft and working on aircraft, maintaining and repairing aircraft and related equipment, and aviation dispatch and flight supervision

Limited Duration: Workers can be dispatched to a hiring party for a maximum of 12 months.

Typical Cases Where Labor Dispatch is Allowed

Temporary Workload Surges: To handle a sudden increase in work demand within a fixed period.
Replacing Absent Workers: Covering for employees on leave (parental, injury recovery, etc.)
Needing Specialized Skills: When your business requires highly qualified technical workers that are not readily available within your workforce.

Employer Responsibilities

Labor Dispatch Contract: The hiring party and the dispatch enterprise must sign a written contract detailing job requirements, working conditions, compensation agreements, and both parties’ responsibilities.
Non-discrimination: Dispatched workers should receive working conditions and wages comparable to your regular employees in similar positions
Overtime/Night work Agreements: Obtain specific agreements from dispatched workers for work beyond regular hours, in line with the Labor Code.
Worker Protection: The hiring party plays a crucial role in ensuring occupational health and safety for dispatched workers.

Benefits and Considerations

Flexibility: Labor dispatch can provide agility in adjusting your workforce size and accessing specialized skills.
Shared Responsibility: The dispatch enterprise handles some human resources and payroll tasks.
Compliance Risks: Detailed record-keeping and adherence to labor dispatch regulations is crucial to avoid legal complications.

Key Takeaways

Labor dispatch is a regulated tool within the Vietnamese labor market. Before utilizing this option, businesses should carefully consider these points:

Verify Dispatch Enterprise Licensing: Only work with properly licensed labor dispatch enterprises.
Suitability for Your Needs: Assess whether your situation falls within the permitted categories for labor dispatch.
Contract Clarity: Ensure labor dispatch contracts clearly address all legal requirements.

Disclaimer

This blog post offers general information on labor dispatch. Labor regulations may change. Consult with qualified HR advisors or legal professionals in Vietnam for the most up-to-date and accurate guidance specific to your business.