On 18 September 2023, the Government issued Decree 70 (Decree 70/2023) to amend various regulations on management of foreign employees under current Decree 152/2020. Decree 70/2023 took effect immediately upon its issuance. Below is our discussion on notable changes introduced under Decree 70/2023.

1)         Easing requirements for engagement of foreign employees

• Under Decree 70/2023, a foreign employee is no longer required to have educational background to be relevant to his/her work experience and proposed job in Vietnam. Instead, the law now only requires the employee to have a minimum work experience suitable for the proposed jobs;

• Decree 70/2023 now expands the type of documents that can be used to demonstrate educational background and work experience of foreign employees being expert and technician. In particular, previous work permits or exemption certificates can also be used as evidence for foreign employee’s experience; and

• A foreign employees now can use passport copy which has been certified by their Vietnam-based employer to apply for work permit or renew its work permit, this would facilitate employees’ application for work permits from abroad. Previously, the employees had to provide their original passport for notarization in Vietnam.

2)         More detailed guideline on foreign employees being manager or executive director

• Decree 70/2023 clarifies the concept of “executive director” to include (i) head of branch, representative office, or business location of enterprises, and (ii) the head who directly administers at least one field of the agency, organization, or enterprise and reports directly to the head of the agency, organization, or enterprise.

• Decree 70/2023 also clarifies documents that can be used to prove the manager and executive director status. Those includes: (i) company's charter or operation regulations of agency, organization, or enterprise; (ii) enterprise registration certificate or establishment certificate or establishment decision or other document of equivalent legal validity; and (iii) resolution or appointment decision of the agency, organization, or enterprise. The document described in (iii) may give the employer a certain flexibility when demonstrating its need for foreign employees. Especially when the foreign employees’ proposed positions are not provided in the company’s charter or other incorporation documents.

3)         More exceptions where the employer is not required to submit proposal for use of foreign employees

Under Decree 70/2023, when engaging the following types of foreign employees, the employer will no longer be required to submit a proposal for use of foreign personnel to the labor authority, among others:

• Foreign lawyer who has been granted a lawyer’s practicing license in Vietnam in accordance with the Law on Lawyers;

• Foreigner who gets married with a Vietnamese citizen and wishes to reside in Vietnam; and

Foreigner who is certified by the Ministry of Education and Training as a foreign worker entering Vietnam for the purposes of (i) teaching, researching; and (ii) acting as a manager, executive, principal, deputy principal of an educational institution, which is established in Vietnam under a proposal of a foreign diplomatic mission or intergovernmental organization.

4)         Shorter timeframe for submitting explanation report for use of foreign employees

• The employer is now required to submit its explanation report for its use of foreign employees to labor authority at least 15 days prior to the anticipated employment date. Under Decree 152/2020, the timeline is 30 days.

The timeframe for making a report to the labor authority in case of changes in the employer’s demand for foreign employees, such as positions, job titles, working forms, numbers, and locations is also reduced to 15 days.

5)         New requirements on public announcement of recruitment of Vietnamese to positions expected to recruit foreigner

• From 1 January 2024, employer must announce job vacancies they plan to fill with foreigners on the Ministry of Labor, War Invalids and Social Affairs’ (MOLISA) electronic portal or the regional Employment Service Center's portal at least 15 days “from” the anticipated date for submitting its explanation report for employing foreign employees. The published contents include job position and title, job description, quantity, qualification and experience requirements, salary, working hours and working location. If the employer fails to find suitable Vietnamese candidates, then it must submit an explanation report on its need to employ foreign employees to the labor authority before making official recruitment of the foreign employees.

• The wording of this clause seems vague. In particular, it is not clear why the draftsman uses the word “from” (kể từ), instead of “prior to” when describing the timeframe for submitting the employment explanation report. When reading this regulation and the regulation discussed at section 4 above together, one may find it confusing to determine the exact time that it must submit the explanation report to the labor authority.

• Perhaps, the reasonable interpretation should be that the employer can only submit the explanation report to the labor authority upon it has completed the public announcement but fails to find qualified Vietnamese employee.

• The new requirement on public announcement seems to make the change mentioned in section 4 above less meaningful.

6)         Changes in authority in charge of procedures for foreign employee management

• The Department of Labor, War Invalids and Social Affairs (DOLISA) now will replace the provincial People’s Committee to take the following responsibilities: (i) to propose local agencies and organizations to introduce and supply Vietnamese labor to contractors; (ii) to decide to allow employers to recruit foreign workers for each job position that cannot recruit Vietnamese employees; and (iii) to approve job positions that employ foreign employees.

• The management board of industrial zone or economic zone will no longer has authority to carry out procedures regarding management of foreign employees in the industrial zone or economic zone, including issuing, re-issuing, extending, revoking work permits, and certifying that foreign workers are not subject to work permits for foreigners working in industrial parks and economic zones. The procedures related to work permits are now only carried out by the MOLISA or DOLISA where the foreign employee is expected to work.

7)         Some stricter regulations on management of foreign employees and their work permits

• Foreigners married to Vietnamese people and living in Vietnamese territory will now have to obtain a work permit exemption confirmation in order to work in Vietnam. Previously under Decree 152/2020, the employer only need to report information on such foreigner and their employment to the local DOLISA.

• Decree 70/2023 requires the application for the work permit to list out all work locations in case the foreign employee works for an employer in multiple location.

• Decree 70/2023 now requires that in case the employer changes its enterprise name without change to enterprise code, its foreign employee must re-obtain the work permit. This new requirement could cause significant inconvenience for the employer when it changes its name.

This post is written by Nguyen Hoang Duong and edited by Nguyen Quang Vu.