The Government of Vietnam has recently provided further guidance regarding the implementation of provisions of the new Labor Code on the management of foreign national employees in Vietnam by issuing Decree No. 102/2013/ND-CP (“Decree No. 102” or “Decree”). The Decree, which went into effect on November 1, 2013, replaces Decree No. 34/2008/ND-CP (“Decree No. 34”) dated March 25, 2008, and Decree No. 46/2011/ND-CP, dated June 17, 2011 (“Decree No. 46”).

The Decree introduces significant changes to the regulation of work permits, the procedure for obtaining a work permit, and, in general, an employer’s regulated use of foreign labor.  In some specific circumstances, the Decree has facilitated the use of foreign workers.  For example, while confirming the existing exemptions listed in the new Labor Code, the Decree grants exemptions to additional categories of workers including (but not limited to): (i) teachers working for foreign organizations assigned to Vietnam by the foreign country’s authority to teach at international educational institutions that are under the management of the foreign diplomatic missions or international organizations in Vietnam; (ii) foreign nationals who hold Master’s Degrees or equivalent assigned to work in Vietnam for consultation, teaching, or conducting research at universities or colleges for a period of less than 30 days; and (iii) foreign nationals working in Vietnam within the framework of an international agreement involving central authorities and political or social organizations at the central level.

While new categories of workers are now exempt from obtaining a work permit, the Government continues to implement procedures to prevent abuse of these exemptions.  An employer must request the Department of Labor in the locality of the foreign national’s workplace to confirm the work permit exemption, and provide supporting documentation, seven business days prior to the commencement of work. Nevertheless, the Government has simplified this procedure to some degree, by removing the requirement to submit documents related to the qualifications of exempted foreign national employees.

The Decree also removes the previous requirement of placing a job advertisement prior to hiring a foreign national, which may also simplify the employment of foreign workers.  Nevertheless, the goal of the Decree to encourage the use of domestic labor over foreign labor is still evident. For example, the Decree has eliminated the previous work permit exemption for foreign national employees performing services for less than three months. 

Moreover, employers must evaluate their needs for foreign national employees on an annual basis and submit a report to the People’s Committee of each province/city where the company’s head office is located.  The report must list each position for which the employer proposes hiring a foreign national, provide an explanation as to why a Vietnamese national cannot meet the position’s requirements, and provide substantial information on the employer’s plans to train and recruit Vietnamese employees to eventually fill the positions.  The Chairman of the People’s Committee will then issue a written approval for the plan regarding the use of foreign labor, as set out in the report. An employer must subsequently include a copy of this report with each work permit or renewal application in order to hire a foreign national employee.

The Decree has also confirmed the reduced term of validity of a work permit from three years to two years.