July 23, 2013

Legal Update: Decree 55 Provides Guidance on Labor Outsourcing

The Vietnamese Government recently released Decree No. 55/2013/ND-CP detailing the conditions for labor outsourcing. While labor outsourcing previously existed in practice, it had been technically illegal until legislation relating to it was introduced for the first time by the new Labor Code (effective since May 1, 2013).

Not all types of work may be outsourced. Pursuant to the guiding Decree, labor outsourcing is restricted to the following types of work:

  • Interpreters, translators, and stenographers
  • Administrative assistants
  • Receptionists
  • Tour guides
  • Sales support staff
  • Project support staff
  • Programmers of production machine systems
  • Staff that produce/install broadcasting and telecommunications equipment
  • Staff that operate, examine, and/or repair machines used for construction or electrical systems in production systems
  • Cleaning and sanitation staff for buildings and factories
  • Document editors
  • Bodyguards and security guards
  • Staff for marketing and customer care via telephone
  • Staff handling financial and tax problems
  • Automobile mechanics
  • Staff that produce scans and drawings for industrial engineering and interior decoration
  • Drivers

The duration of the labor outsourcing may not exceed 12 months and may not be extended. This limitation on duration is placed upon the outsourced laborer and not the enterprise providing the outsourced laborer; thus, it would not be possible to switch enterprises to circumvent the 12-month limitation. The law does not appear to limit replacing the outsourced laborer with another after the 12 months have expired.

The enterprise using the outsourced labor is required to pay salary to the outsourced laborer at a level no less than it would pay to its employees who have the same professional qualifications and are doing the same or similar job as the outsourced laborer.

Decree 55 took effect on July 15, 2013.

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