Viet Nam is an attractive destination for foreigners to live and work, thanks to its friendly living environment, open-minded people, stable political system, and safe, peaceful society. In recent years, the country has welcomed a strong wave of foreign direct investment (FDI), with numerous FDI companies operating efficiently in industrial zones and key economic centers such as Ho Chi Minh City, Ha Noi, and Da Nang…
Along with economic development and international integration, the demand for hiring foreign employees, particularly those with high qualifications and specialized experience, has been increasing. Among them is a considerable number of elderly foreign experts who still wish to contribute their expertise in Viet Nam. However, the employment and use of elderly foreign employees (“Elderly Foreign Employees”) should be carefully considered from a legal perspective to ensure compliance with applicable regulations. Below are some key legal issues that companies should pay attention to when employing Elderly Foreign Employees in Viet Nam.
1. Definition of Elderly Foreign Employees:
The Labor Code stipulates a general retirement age for employees, without distinguishing between foreign and Vietnamese employees. A foreign employee is identified as an Elderly Foreign Employee as follows:
(i) Article 148.1 of the Labor Code 2019 stipulates that an elderly employee is a person who continues working after reaching the retirement age.
(ii) Pursuant to Article 169 of the Labor Code 2019, the retirement age for employees working under normal working conditions is being gradually adjusted according to a set roadmap, reaching 62 years for male employees by 2028 and 60 years for female employees by 2035. From 2021 onwards, the retirement age is set at 60 years and 3 months for male employees and 55 years and 4 months for female employees. Each subsequent year, the retirement age shall increase by 3 months for male employees and 4 months for female employees.
Accordingly, under normal working conditions, the current retirement age is 56 years and 08 months for female employees and 61 years and 03 months for male employees.
2. Employment of Elderly Foreign Employees:
The law does not prescribe any restriction on the Company hiring Elderly Foreign Employee. Therefore, the Company and the Elderly Foreign Employee still have the right to establish and perform a labor relationship, provided that both parties ensure compliance with the principles of voluntariness, goodwill, equality, cooperation, respect for the lawful rights and interests of both parties, and other conditions and regulations under Vietnamese law applicable to foreign workers.
In addition to complying with the laws of Vietnam, the Company and the Elderly Foreign Employee must also comply with the laws of the employee’s country of nationality (“Foreign Laws”). Therefore, the Company should exercise caution in reviewing the provisions of the Foreign Laws regarding the retirement age, the right to work after retirement age, and the conditions for working outside the home country.
3. Conditions for Elderly Foreign Employees to Be Permitted to Work in Vietnam:
To be eligible to work in Vietnam, Elderly Foreign Employees must meet the following conditions:
(i) Possess professional qualifications, technical expertise, skills, and work experience.
(ii) Be in good health as prescribed by the Minister of Health – this is a critical requirement that Elderly Foreign Employees must satisfy. The document evidencing compliance with the health condition is a health certificate or medical examination report issued by a competent medical authority or organization in either a foreign country or in Vietnam, valid for a period of 12 months.
(iii) Not be currently serving a criminal sentence, not have an unexpunged criminal record, and not be subject to criminal prosecution under the laws of the foreign country or the laws of Vietnam.
(iv) Hold a work permit issued by a competent Vietnamese authority, except in cases where the employee is exempt from a work permit as provided in Article 154 of the Labor Code 2019.
4. Participation in Compulsory Social Insurance, Health Insurance, and Unemployment Insurance:
(i) Regarding participation in Social Insurance:
According to Decree No. 143/2018/ND-CP, foreign employees working in Vietnam are subject to compulsory Social Insurance when they have a work permit, practicing certificate, or practicing license issued by a competent Vietnamese authority, and are working under an indefinite-term labor contract or a fixed-term labor contract of at least 12 months with a company in Vietnam. However, under Article 2.2(b) of Decree No. 143/2018/ND-CP, foreign employees who have reached the statutory retirement age are not subject to compulsory social insurance.
Therefore, Elderly Foreign Employees are not subject to participation in social insurance.
(ii) Regarding participation in Health Insurance:
According to Article 12.1 of the Law on Health Insurance, the subjects of compulsory Health Insurance include: “Employees working under an indefinite-term labor contract or a definite-term contract of three months or more.” The current law does not provide any exceptions exempting Elderly Foreign Employees from participating in Health Insurance. Therefore, companies must participate in Health Insurance for Elderly Foreign Employees who work under labor contracts of three months or more.
(iii) Regarding participation in Unemployment Insurance:
The Law on Employment stipulates that companies are responsible for registering Unemployment Insurance for employees who are Vietnamese citizens aged 15 years or older within 30 days from the effective date of the labor contract or employment contract. Thus, foreign employees are not subject to participation in unemployment insurance under Vietnamese law.
It should be noted that since Elderly Foreign Employees are not subject to social insurance and Unemployment Insurance, companies are responsible for paying an additional amount, together with the salary payment period, equivalent to the amount the company would have contributed to Social Insurance (18 percent of the monthly salary used for social insurance contribution) and Unemployment Insurance (1 percent of the monthly salary used for social insurance contribution), in accordance with Clause 3, Article 168 of the Labor Code 2019.
5. Other Notes:
(i) Elderly Foreign Employees have the right to agree to reduce their daily working hours or apply a part-time working regime.
(ii) The company and the Elderly Foreign Employee may agree to sign multiple fixed-term labor contracts, with each contract’s term corresponding to the validity period of the granted work permit.
(iii) The company is responsible for organizing health check-ups at least once every six months for Elderly Foreign Employees. In addition, according to Article 149 of the Labor Code 2019, the company is responsible for taking care of the health of Elderly Foreign Employees at the workplace.
Related posts
- Regulation on elderly employees
- Notable issues when recruiting foreign elderly workers
- Procedures for re-issuing work permits for foreign employees
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
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Apolat Legal is a law firm in Vietnam with experience and capacity to provide consulting services related to Employment and contact our team of lawyers in Vietnam via email info@apolatlegal.com.
