Vietnam to Increase Labor Related Administration Fines
The government introduced Decree No.28/2020/ND-CP on fines for administration violations related to labor, social insurance and Vietnamese workers abroad. The new Decree will be effective from April 15.
While the list of labor administrative fines is exhaustive, we highlight the main ones below:
The fines will be applicable if employers fail to have written contracts for work with a duration of three months or longer as well as incorrect contracts for employees.
Fines will also be applicable for contracts that lack terms and conditions.
The fine for the above are applicable as follows:
In addition, if employers force employees to do a particular task or mistreat employees but not enough for criminal prosecution – they will be fined US$2,100 to US$2,980 (50 million to 70 million VND)
Employers who send employees to work at different locations other than what is stated in their labor contract without consent will be fined US$129 to US$300 (3 million to 7 million VND)
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Businesses must also have a valid labor outsourcing license to conduct labor outsourcing operations. If not, fines range from US$2,133, US$3,200 (VND 50,000,000 to 75,000,000).
For employers that fail to pay wages on time or as per law, fines range from US$214 to US2,132 (VND 5 million to 50 million) depending on the number of workers and range from US$128 to US$853 (VND 3 million to 20 million) for failure to pay for social insurance contributions.
For foreign workers
Employers will be subject to a fine of US$43 to US$123 (VND 1 million to 3 million) if they don’t send the signed labor contract to the agency and do not report the correct details of employment duration of foreign workers.
Specifically, employers that employ workers without a work permit or without documents for workers that don’t require a work permit as per law will be fined the following:
In addition, foreign workers are subject to fines of US$640 to US$1,066 (VND 15 million to 25 million) that work without a work permit or without a written certification that they are not required a work permit as per law. They are also subject to deportation.
Employers that send workers abroad without proper labor contracts and/or documents signed by state agencies can be fined between US$213 to US$7,682 (VND 5 million to 180 million) depending on the number of employees in the firm. Fines also apply to Vietnamese workers that go to foreign countries without the intention of working or in defiance of rules as per the labor contract.
The decree allows for fines to be double for organizations and individuals. Organizations are defined as state agencies, NGOs, international organizations, representative offices, educational institutions, and health facilities among others.
In addition, based on the seriousness of the issue, employers may be subject to the confiscation of the labor sublease license, confiscation of certifications in technical areas and inspector certificates among others.
Improving employee rights and conditions
The Decree introduces a number of regulations and are specific to the exact nature of labor fines in Vietnam. This will allow investors to have a clearer idea of the rules and regulations while also allowing workers to be treated fairly. The regulations, however, do not just apply to employers but also to employees and state-owned organizations.