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A prerequisite for operating an employee leasing service, is first obtaining an Employee Leasing Permit, and the information contained within this provides a clear understanding of how this business line operates, as well as the process of applying for an Employee Leasing Permit
What Are Professional Employer Organizations?
Professional employer organizations are companies established in accordance with the regulations that have obtained an Employee Leasing Permit. The organization recruits and enters into an employment relationship – via contracts – with employees, who are then assigned to work under the direction of other companies.
Example: During the New Year rush, Company H is in need of 100 production workers. Company G, a professional employer organization, accepts the request for 100 production workers within the region of Company H. Accordingly, the 100 production workers maintain their employment relationship with Company G despite being assigned to Company H to work in accordance with Company H’s demand. Company G maintains the contract and management of these 100 workers.
Eligible business lines for Employee Leasing
List of business lines eligible for Employee Leasing
Employee Leasing IS NOT permitted for all business lines, instead, this service is only available for the following 20 business lines listed below.
Conditions To Obtain Employee Leasing Permit
Obtaining an Employee Leasing Permit involves companies making escrow deposits and the representative of the company must meet the requirements set out by law.
- Firstly: companies must make an escrow deposit of 2.000.000.000 dong (two billion dong).
- Secondly: the professional employer organization representative MUST meet the following requirements:
- Hold the title or position of executive of the enterprise in accordance with the Law on Enterprise;
Executives of the enterprise are the President of the Board of Members, members of the Board of Members, the President of the Company, the President of the Board of Directors, members of the Board of Directors, Director, or General Director.
- Have a Clean Criminal Record;
- Possess direct 3 years (36 months) of work experience relative to employee leasing within the past 5 consecutive years prior to the application.
Steps Obtaining an Employee Leasing Permit
Step 1: Business line registration
Companies must ensure that their registered business lines include Employee Leasing Services, prior to obtaining an Employee Leasing Permit.
Application dossier
- Notification of addition to business lines;
- Decisions, memorandums of the company on the addition of business lines.
Companies prepare a dossier containing the documentation listed above and submit it to the Department of Planning and Investment in which their headquarters are situated. Within 5 business days, the Department of Planning and Investment will issue a notification of the addition of Employee Leasing Services to the registered business lines.
VISIC code: companies might consider registering themselves under the following 2 VISIC codes:
- Provision and management of human resources (7830)
- Temporary employment agency activities (7820)
Step 2: Employee Leasing Permit Application
To apply for the permit, prepare a dossier containing the following documentation:
- Permit application form;
- Personal background description of the company representative;
- Representative’s Judicial record card No. 1;
Should the representatives be foreigners and judicial record card No.1 is unavailable, the judicial record card or the equivalent from the country of nationality may be used; the issuance date of documents mentioned in this section must be within 6 months of the application. Documents from foreign countries and in a language other than Vietnamese, must be translated into Vietnamese, notarized, and undergo consular legalization.
- Evidence of direct work related experience relative to Employee leasing or the labor provisions of the representative of the enterprise, is likely to be one of the following documents:
- Notarized copy of the employment contract, or decision on recruitment, appointment, and assignment of the enterprise representative;
- Notarized copy of the appointment decision (for applied appointments) or documentation recording the voting results (for applied votes) of the enterprise representative or a copy of the enterprise registration certificate (for professional employer organization representatives).
All documentation from foreign countries and in a language other than Vietnamese, must be translated into Vietnamese, notarized, and undergo consular legalization in accordance with the law.
- Confirmation of the Employee Leasing services escrow deposit;
- Representative’s Passport/Citizen identity card;
- The company’s enterprise registration certificate.
Procedure
The aforementioned application will be submitted by the company to the Department of Labor – Invalids and Social Affairs in which the company’s headquarters is situated.
The Department of Labor – Invalids and Social Affairs will provide the applicant with a receipt or submission listing the date of receipt.
Within 20-business days the Department of Labor – Invalids and Social Affairs will evaluate and submit the application to the President of the People’s Committee for the permit. From there, it will take 10-business days for the Department of Labor – Invalids and Social Affairs and the President of the provincial People’s Committee to issue the permit. If a permit is not issued, then a detailed response will follow.
Instances Where Employee Leasing Permit Could Not Be Obtained
The Employee Leasing Permit is unobtainable if the:
- The Employee Leasing Permit is unobtainable if the:
- Company has provided Employee Leasing services under a false permit;
- The representative of the company has once represented a company for which the License has been revoked due to the reasons listed below within the past 5 years prior to the date of application for the Employee Leasing Permit.
- Lending of License to other enterprises, organizations, or individuals;
- Providing Employee Leasing services to business lines other than eligible business lines for employee leasing;
- Falsification of license, extension, or relicense application; Any alteration of the information on the issued license; use of counterfeit/false/forged/fraudulent licenses.
- The representative of the company once represented a company operating under counterfeit/false/forged/fraudulent licenses.
What Are The Operational Principles Of Employee Leasing That Companies Need To Be Aware Of?
- Duration of Employee Leasing
Employees may only be leased for up to 12 months
- The party to whom employees are leased may permanently employ said employees to:
- Meet sudden increases in demand for workforce within a given period of time;
- Substitute for employees during maternity leave, leave due to work-related injuries or illnesses, or leave due to citizen obligations;
- Meet the demand for a workforce requiring high technical skills.
- The party to whom employees are leased shall not employ said employees if:
- The purpose is to substitute for employees during a strike or labor dispute;
- There is no agreement on compensation for work-related accidents or illnesses between the leased employee and the professional employer organizations;
- The purpose is to replace employees who are laid off due to changes in structure and/or technology caused by economic reasons or division, separation, merger, or acquisition of enterprise.
- Other limitations
The parties to whom employees are leased to shall not sublet the leased employees to other parties nor shall they employ leased employees from unlicensed professional employer organizations.
Attention:
- The duration of Employee Leasing Permits is 60-months and may be extended multiple times - each extension is good for 60 months.
- At 6 and 12 month intervals, reports on the operation of Employee Leasing services must be submitted to the provincial President of the People’s Committee, Department of Labor – Invalids and Social Affairs, and the Management Board of the industrial zone and/or economic zone where the headquarters is situated.
The aforementioned information pertains to the Employee Leasing Permit and has been published with the hope that it helps our Clients and potential clients have a better understanding of this business line, as well as the steps to obtain Employee Leasing Permits. For further consultation on the procedure, please contact us via the information below for prompt responses.
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