In Vietnam, companies are required to contact the Department of Labor, Invalids and Social Affairs in each region to ensure that their business activities comply with labor laws and other related laws. : DOLISA) labor inspections are conducted regularly. According to a statistical report by the Ministry of Labor, Invalids and Social Affairs (MOLISA), in 2018 there were 6,979 inspections, 41,446 improvement orders, 1,076 administrative sanctions, and 1,076 penalties. The total amount was 32,234 billion VND (approximately 150 billion yen). Previously, we summarized information regarding labor inspections in “Points to keep in mind regarding labor inspections in Vietnam” (published on May 22, 2019), but some labor law regulations have changed to date. Additionally, according to the current Cabinet Order, penalties for administrative violations in the labor field are stricter than in the previous regulations.

This article explains points to keep in mind when conducting labor inspections, based on the latest laws and regulations and recent opinions and trends regarding labor inspections. Companies should be aware of the points to keep in mind and use them to prevent risks and make appropriate advance preparations.

1. Types of contracts related to the labor field
When labor authorities inspect a company, one of the items they focus on is the labor contract. In this connection, usually a probationary labor contract, a signed labor contract, a labor dispatch contract (if any), a labor contract termination letter, and documents related to the worker’s benefits and allowance system are often reviewed. Furthermore, based on the 2019 Labor Law and related regulations, the following documents and contents tend to be emphasized in labor inspections.

◆Contents of labor contract
Currently, there are no regulations regarding the form of labor contracts, but based on Circular 10/2020/TT-BLDTBXH, it is necessary to ensure that all contents of the labor contract are agreed upon between the company and the worker. Furthermore, when referring to other internal regulations such as salary and bonus regulations or work regulations in a labor contract, it is important to clearly state the basis for application in preparation for labor inspections. In addition, it is necessary to check the status of creation of various internal regulations.

◆Service contract concluded with an individual
Based on the 2019 Labor Law, the scope of determining labor relations has been expanded. Accordingly, when a company enters into a service contract with an individual, if there are two elements: (i) payment of remuneration or salary; and (ii) control over one party, then a locally hired labor contract and There is a risk that it will be considered. In doing so, companies must fulfill their obligations regarding labor systems, social insurance, etc. to workers from the time of concluding the contract.

◆Vocational learning/vocational training contract
Contracts related to vocational learning and vocational training are not subject to compulsory insurance coverage, so recent labor inspections have tended to place emphasis on examining these contracts. In particular, companies should be aware of the following: 1) The period of the contract for vocational learning/vocational training must not exceed three months; 2) The content of vocational learning/vocational training must be in line with the company’s business activities. (3) If a worker is to continue to be used after the expiry of the contract, both parties must conclude a labor contract.

◆Contract for dispatching workers overseas
Companies that send workers abroad in the form of internships for the purpose of improving skills, or workers who sign individual contracts with the parent company, are required to comply with the provisions for sending Vietnamese workers abroad that came into effect in 2020. It is necessary to pay attention to the relevant laws and regulations. In addition to meeting the requirements of the relevant laws and regulations, companies must also comply with the registration and reporting procedures with the authorities and the social insurance enrollment procedures for this special provision. For these items, administrative fines range from VND 1 million to VND 150 million, depending on the violation and severity.

2. Labor discipline and material responsibility
Unlike the old regulations, the current law requires companies to draw up work rules from the time they start signing labor contracts with workers. If there are 10 or more workers, written work rules must be issued and registered with the labor authorities. In addition, the 2019 Labor Law stipulates (1) prevention of sexual harassment in the workplace, procedures and procedures for dealing with acts of sexual harassment in the workplace, (2) cases in which workers are temporarily transferred to work that differs from their labor contract, and (3) labor Three new items must be stipulated in the work regulations: who has the authority to handle discipline. In addition to work regulations, the labor authorities will request the submission of labor disciplinary documents (if any) and material liability compensation documents (if any) in order to examine the grounds and procedures for disciplinary procedures.

Under this item, administrative fines range from VND 2 million to VND 80 million, depending on the violation and severity.

3. Work permit for foreign workers
Regarding work permits for foreign workers, 1) the use of foreign workers who have not obtained a work permit or a work permit exemption certificate, and 2) the labor authority to submit the concluded labor contract after the work permit is issued. The following three points are frequently pointed out: (3) errors in the information on the work permit (work location, title, etc.);

Under this item, administrative fines range from VND 2 million to VND 150 million, depending on the violation and severity. Additionally, foreigners working in Vietnam without a work permit will be deported from Vietnam.

4. Social Insurance, Medical Insurance, and Unemployment Insurance
In addition to the points to keep in mind when enrolling workers in social insurance, medical insurance, and unemployment insurance, as described in “Points to Consider in Labor Inspections in Vietnam” (published on May 22, 2019), companies should also be aware of the regulations regarding mandatory enrollment in social and medical insurance for foreigners.

According to the regulations, foreign workers who hold a work permit and a work contract for a period of at least 12 months are eligible for compulsory insurance coverage, unless they work in the form of an internal transfer (expatriates) or meet the conditions for mandatory retirement. It should be noted that whether a foreign worker is in an “internal transfer” job category that is exempt from this compulsory social insurance and medical insurance is usually determined based on the work permit.

Under this item, administrative fines range from VND 2 million to VND 150 million, depending on the violation and severity. In addition, the unpaid/deficit compulsory insurance amount and interest as stipulated shall be paid.

5. Salary table, salary/bonus regulations, wage table
When inspecting salary items, 1) salary tables, 2) salary and bonus regulations, 3) wage tables (any month can be selected), and documents used for payroll calculations are frequently checked. Under current regulations, companies are not required to submit wage tables to labor authorities, but they must be prepared as internal regulations and made public when labor inspections are conducted.

Under this item, administrative fines range from VND 1 million to VND 150 million, depending on the violation and severity.

6. Regular labor report
Based on the latest regulations, the main reporting obligations of companies that will be rigorously examined during labor inspections are summarized below.

[Major reporting obligations of companies in labor-related matters]

Report name Deadline FormForm
Half a year Annual
Report on worker usage status Before June 5th Before December 5th Form 01/PLI of Decree 145/2020/ND-CP
Report on the usage status of foreign workers Before July 5th Before January 1th Form 07/PLI of Decree 70/2023/ND-CP
Report on work-related accidents Before July 5th Before January 10th Annex XII of Decree 39/2016/ND-CP
Occupational health and safety reporting None Appendix II of Decree 07/2016/TT-BLDTBXH
Report on unemployment insurance participation status None Before January 15th Form 33 of Decree 28/2015/TT-BLDTBXH

Source: Created by the author based on materials

For these items, administrative fines range from VND 2 million to VND 20 million, depending on the violation and severity.

7. Working hours, break time
Labor authorities will inspect the practices of enterprises based on the working hours and rest periods stipulated in the work regulations and company regulations. In 2023, some local labor authorities increased inspections of companies with high overtime work. Frequently cited violations include working overtime in excess of the permitted hours, not being paid sufficient overtime wages, or working overtime of 200 to 300 hours per year. This is a case of failure to report to labor authorities as required.

Under this item, administrative fines range from VND 4 million to VND 150 million, depending on the violation and severity.

This time, we have summarized the points to keep in mind when handling labor inspections, based on the latest laws and our practical experience of supporting companies in dealing with labor inspections. We recommend that companies once again check whether there are any deficiencies in their various internal regulations and documents, and whether the rights and safety of workers are being appropriately ensured. If there are deficiencies, please use this article to respond appropriately in accordance with laws and regulations and reduce the risk of being pointed out in future labor inspections.

(Created on January 22, 2024)

*This article was translated by Yarakuzen.

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