The new Law on Social Insurance is coming into force at the 1 January 2016 and it will introduce some extensive changes which are considered to be good for Vietnam and align with international practice. These changes include, among others, expansion of the subjects of application of compulsory social insurance; additional provisions to improve the transparency of social insurance regime such as rights of employees to self-manage their social insurance books and obligations of employers to publicize information about the payment of social insurance premiums to employees every 6 months; steps to be taken to separate unemployment insurance from the social insurance regime; etc.
In order to ensure such changes are properly understood by employers and employees, the Ministry of Labour, War Invalids and Social Affairs should have more consultation and communication with the business community by reviewing regulations related to such changes, directly interacting with employers and employees during the consultation and opinion collecting process and building trust for social insurance agency. This would allow employers to be better positioned while explaining issues to their employees.
With respect to foreign workers, following the adoption of the new Labour Code in 2013, the Government of Vietnam recently issued Decree No. 102/2013/ND-CP elaborating the Labour Code’s provisions on foreigners working in the country. While the Decree clarifies the issuance and reissuance of work permits and eligibility for work permit exemption, there are current issues that should be resolved:
• Procedure for re-issuance of work permit should be simplified and it should be possible to apply at least 30 days prior to its expiration so that applicants have time to get their visa/temporary cards renewed;
• Trainees, who are working in Vietnam, and freelancers, who are working for many entities, are not covered by this Decree;
• The requirement of a criminal record certificate should only be applicable for applicants who have been in Vietnam for 6 months or more;
• The period for approval of a “foreign labour demand report” should be maximum 15 days and not 6 weeks as in some provinces;
• Documents for issuance of work permit should depend on type of employment/assignment including foreigners working under labour contracts and intra-company transferees or assignees working under service contracts; foreigners working in Vietnam less than 90 days to conduct audit, training, internship, etc.;
• Procedure for work permit exemption should be simple; and
• More comprehensive guidelines for applicants and training of officers in charge of issuance of work permits should be provided.
Please kindly note that the upcoming ASEAN Economic Community will impact the hiring of regional skilled labour in certain job categories by end the of 2015. The Ministry of Labour, War Invalids and Social Affairs should maintain the communication channels with the business community on this to address both opportunities and challenges.
—o0o—
Please do not hesitate to contact Mr. Oliver Massmann under omassmann@duanemorris.com if you have any questions on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.