What to Note When Signing Labour Contract with Foreign Workers?

 With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers, they must sign a labor contract.

After meeting the conditions specified in the Labor Code on meeting the requirements for recruitment and working in Vietnam, the foreign worker working in Vietnam shall sign a labor contract before the expected date intend to work for the employer. In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labor together.

Firstly, on the working position in the labor contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.

Regarding the working time, it will normally be agreed upon by the two parties but must not exceed the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.

According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.

Regarding the term of the labor contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.

In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labor dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties. Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.

At most, it is important that the employers and foreign workers need to pay attention and strictly comply with the provisions of the law so that the process of entering into and performing the contract is conducted smoothly and in compliance with the law in Vietnam.

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What to Note When Signing Labour Contract with Foreign Workers?

  With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers, they must sign a labor contract.

After meeting the conditions specified in the Labor Code on meeting the requirements for recruitment and working in Vietnam, the foreign worker working in Vietnam shall sign a labor contract before the expected date intend to work for the employer. In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labor together.

Firstly, on the working position in the labor contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.

Regarding the working time, it will normally be agreed upon by the two parties but must not exceed the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.

According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.

Regarding the term of the labor contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.

In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labor dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties. Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.

At most, it is important that the employers and foreign workers need to pay attention and strictly comply with the provisions of the law so that the process of entering into and performing the contract is conducted smoothly and in compliance with the law in Vietnam.

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Why Foreign Workers Should Declare Personal Income Tax (PIT) in Vietnam

 

According to the Vietnam General Department of Taxation, when the Vietnam tax authorities identify those foreign workers in Vietnam, who are subject to Personal Income Tax (PIT) in Vietnam and foreign countries, but fail to declare tax, such foreign workers or foreign employee will be liable to the administrative sanctions on tax in Vietnam.

Even though for foreign workers in Vietnam who have returned to their home countries or relocate to other countries prior to the tax declaration period in order to avoid tax obligations, the tax authorities would cooperate with their employers in Vietnam to collect the tax liabilities of such. Pursuant to the current laws and regulations, tax authorities, based on the scale of the tax violation in Vietnam, shall be able to apply sanctions.

In particular, the warning sanction shall be applied to the not so serious violations having mitigation details and is applicable to warning sanction. The warning sanction shall be decided in writing. The monetary fines applied to the tax violations are specified as follow: i) maximum fine of VND 200 million (USD 9,000) for the tax payer having the violations on procedures; ii) maximum fine of VND 100 million (USD 4,900) for individual tax payers that violate the tax procedures specified by Law on administrative sanction; iii) for incorrect declarations leading to a decrease in the amount of tax or increase in the amount of tax reimbursement, the fines is 20% of the undeclared tax or the over-reimbursed; iv) for fraudulent activities in tax declaration, the fines shall vary from 1 to 3 times of the tax evaded.

If you are seeking service in tax declaration, we are available to assist.

Contact us at ANT Lawyers, your lawyers in Vietnam at email ant@antlawyers.vn or call +84 28 730 86 529.

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Report the Demand to Use Foreign Workers in Vietnam

 In order to manage the usage of foreign workers in Vietnam, the Vietnam state authority has requested employers to provide explanation for such need to use foreign workers.

This will be the preliminary procedure before applying for work permit in Vietnam then temporary residence card in Vietnam for foreigners. The report of demand to use of foreign workers has to meet the following requirements:

Demand to use foreign workers: The employer (except contractors) is responsible for determining the demand to use foreign employees for each position that the Vietnamese employee has not met the requirement and submit written explanation. In case the employer is a contractor, in the bidding documents, it is required to declare the number, qualifications, professional competence and experience of foreign workers mobilized to implement bidding packages.

Recipient: Chairman of People’s Committees of provinces and cities under central authority (hereinafter referred to as the provincial People’s Committee) where the employer is headquartered.

Periodic notification period: Every year, the employer (except contractor) is responsible for determining the demand to use foreign employees for explanation.

The period of notice for the first time: Before at least 30 days from the date the employer (except contractor) plans to recruit foreign employees, the employer must report explanations as provided in Paragraph 1 Article 4 of Decree No. 102/2013 / ND-CP on the demand to use foreign workers, including work position, number, qualifications, experience, salary, working hours and submit directly to the Department of Labour – Invalids and Social Affairs of provinces and cities under central authority (hereinafter referred to as the Department of Labor – Invalids and Social Affairs) where the employer is headquartered.

The period of notice the adjustment: The employer whom is approved to use foreign employees, that have changes in the demand for foreign workers, has to directly submit the report explaining the adjustment and supplementation at least 30 days before the expected day for new recruitment, additional recruitment or recruitment to replace foreign workers with the Department of Labour – Invalids and Social Affairs where the employer is headquartered.

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What to Note When Signing Labour Contract with Foreign Workers?

 With the policy of opening the economy in Vietnam, not only Vietnam attracts investors to set up company, but also the demand for foreign workers in enterprises grows and diversifies. However, in order for Vietnam companies to be able to use foreign workers, they must sign a labor contract.

After meeting the conditions specified in the Labor Code on meeting the requirements for recruitment and working in Vietnam, the foreign worker working in Vietnam shall sign a labor contract before the expected date intend to work for the employer. In this contract, the employer and the foreign worker will agree on all issues arising in the process of working as well as using labor together.

Firstly, on the working position in the labor contract, it must show the correct position and position for which the employer has determined the needs with the competent authority and in accordance with the working position shown in the document and the work permits which have been granted to foreign workers.

Regarding the working time, it will normally be agreed upon by the two parties but must not exceed the number of working days (hours) as prescribed by Vietnamese law. The number of overtime hours must be based on voluntary work and must ensure rest time, rest during working time and weekends for foreign workers.

According to the provisions of the Labor Code, in addition to Vietnamese public holidays and New Year’s holidays, foreign workers are allowed to take one more day off for the national traditional New Year and one national day of the country. This is a humane regulation, respecting the national culture of Vietnam. Therefore, the employer needs to learn about the National Day and the traditional Tet holiday of foreign workers so that the employees can take leave in accordance with the provisions of the law.

Regarding the term of the labor contract, the term of the labor contract for foreigners is also governed by the duration of the work permit issued by the competent Vietnamese authority. Accordingly, the term of the labor contract for foreign workers working in Vietnam must not exceed the term of the work permit. Therefore, the employer should pay attention to conclude the contract term in accordance with regulations.

In addition, employers and foreign workers should be aware of the terms of disputes which could potentially arise. Because, contract terms are an important legal basis to resolve when a labor dispute arises, agreeing in advance on how to resolve a dispute when a dispute arises will create a clear legal foundation for easy settlement by both parties. Dispute lawyers are suggested to be consulted at an early stage to avoid dispute escalation.

At most, it is important that the employers and foreign workers need to pay attention and strictly comply with the provisions of the law so that the process of entering into and performing the contract is conducted smoothly and in compliance with the law in Vietnam.

Read More