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October 21, 2013

New Decree on Foreign Employees Working in Vietnam

Tilleke & Gibbins

As part of the Vietnamese government’s efforts to overhaul its labor legislation, it adopted Decree 102/2013/ND-CP on September 5, 2013 (Decree 102), elaborating on the provisions of the new Labor Code (in force since May 1, 2013) on foreign workers in Vietnam. Decree 102 will be effective as of November 1, 2013. We discuss some of the key points below.

Employer Reporting Requirements

Decree 102 confirms the Labor Code’s requirement that employers (with exceptions) are to report their demand for foreign employees in respect of positions for which qualified Vietnamese workers cannot be found. Decree 102 clarifies further that employers must send these reports annually to the Chairman of the local People’s Committee, which is to issue written approvals to the employer for employing foreign workers in respect of each position. If there is a change in the employer’s needs for foreign employees, it will need to notify the local People’s Committee of such changes. These reports must be submitted with work permit applications.

Additional Categories for Work Permit Exemptions

Decree 102 extends the categories of foreign nationals who are exempt from work permit requirements, adding: (1) volunteers; (2) journalists; (3) teachers at international schools under the management of diplomatic missions or international organizations; and (4) those with master’s degrees or higher who engage in consulting, teaching, or research at universities for 30 days or less. Foreign workers for whom the work permit exemption already applies under the new Labor Code include, among others, capital-contributing members or owners of limited liability companies, members of the board of management of shareholding companies, and lawyers.

While Decree 102 expands the categories of workers exempted from work permits, the Decree provides that a foreign national’s employer must request the relevant labor authority to certify in writing that the employee satisfies the conditions for exemption. Previously, the employer had only to report to the labor authorities that the foreign employee was eligible for an exemption. Under Decree 102, however, an applicant for work permit exemption is no longer required to legalize the foreign documents in the application file; only translation into Vietnamese and a relatively simple authentication process of such documents in Vietnam is required.

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