Decree 70/2023/ND-CP: Transforming Vietnam's Labor Landscape for Foreign Workers

In September 2023, the Government of Vietnam enacted Decree 70/2023/ND-CP, marking a significant milestone in the country’s labor regulatory landscape. This Decree introduces pivotal amendments and additions to existing regulations, particularly targeting the facilitation of foreign labor utilization while streamlining bureaucratic procedures.

Decree 70 heralds a new era in Vietnam’s approach to workforce management, aiming to bolster its attractiveness as a destination for foreign talent and stimulate economic growth. With a focus on addressing the challenges faced by businesses in recruiting and employing foreign workers, this Decree implements measures to simplify processes, enhance efficiency, and ensure compliance with labor laws.

This article provides a comprehensive overview of Decree 70/2023/ND-CP, highlighting its key provisions and implications for businesses operating in Vietnam. From the relaxation of experience requirements for foreign experts to the streamlining of work permit issuance procedures, each potential impact on the country’s labor market and foreign investment landscape is examined.

By examining the rationale behind Decree 70 and its implications for stakeholders, this article aims to shed light on the evolving regulatory framework governing foreign labor utilization in Vietnam and its implications for business operations.

Foreign experts are not required to have experience in their trained field.

Decree 152 requires businesses and foreign workers (hereinafter referred to as "FWs") to meet the legal requirement regarding the number of years of work experience in the trained field corresponding to the intended position in Vietnam. This legal requirement has posed difficulties for businesses when applying for work permits; indirectly making it challenging for them to find suitable candidates. Decree 70/2023/ND-CP has removed this requirement, meaning that foreign experts are not obliged to have experience in the trained field.

Provision on foreign workers being able to work at multiple locations with one work permit.

Before September 18, 2023, when sending FWs on business trips, businesses often struggled to explain to state authorities why FWs were present at a different workplace from the registered headquarters, potentially facing administrative penalties or even deportation if deemed to be working illegally. Decree 70 addresses this by allowing FWs to work for one business at multiple locations. However, businesses must list all workplace locations in the work permit application.

Shortening the reporting time for explaining the need for using FWs.

Decree 152 stipulates that at least 30 days before the intended use of FWs, businesses must identify the need for FWs for positions that Vietnamese workers cannot fulfill and report to the Ministry of Labor, War Invalids and Social Affairs (hereinafter referred to as "MOLISA") or the Department of Labor, War Invalids and Social Affairs (hereinafter referred to as "DOLISA"). Decree 70 shortens this period to 15 days compared to Decree 152.

Unified authority for issuing work permits, confirming labor demand.

Previously, according to Decree 152, MOLISA or the People's Committees at the provincial level ("Provincial People's Committee") were the competent state authorities to issue documents approving the demand for labor use. In practice, Provincial People's Committees delegated this authority to DOLISA to process documents, where businesses had to submit reports explaining the need for FWs to DOLISA, and then DOLISA submitted them to the Provincial People's Committee for approval. The final approval document for FWs' positions was then returned to the business through a one-stop mechanism, causing procedural delays. Decree 70 addresses this by stipulating that DOLISA is the competent state authority to approve the demand for FWs instead of the Provincial People's Committee.

Added provision requiring businesses to advertise job openings for Vietnamese workers for positions intended for FWs.

When reporting the need for using FWs, Decree 152 only requires businesses to explain why Vietnamese workers cannot be recruited for the intended FW positions without obligating them to submit actual documents for proof. However, Decree 70 adds a provision requiring businesses to advertise job openings for Vietnamese workers for positions intended for FWs on the job portal of MOLISA before explaining the need for using labor starting from January 1, 2024. This provision aims to reduce competition and direct threats to the employment opportunities of Vietnamese workers in the context of a significant influx of FWs into Vietnam.