COVID-19: Managing Your Human Resources in Vietnam

Alberto VettorettiManaging Partner, Dezan Shira & Associates

The COVID-19 has caused significant business disruption to businesses and offices alike throughout the country. Not only Vietnam but the issue has impacted businesses across the world, where the outbreak has meant the avoidance of gatherings in public, the closure of entertainment centers, movie theaters, bars, clubs as well as tourist sites.

The situation continues to remain fluid, with several staff working from home. Labor shortages, work policies, flexible working arrangements, and travel restrictions have meant that Human Resource (HR) personnel are facing significant challenges.

In addition to this, rules and regulations are changing rapidly due to ongoing developments.

Most recently, Vietnam suspended the issuance of new work permits from March 17 and barred all foreigners (unless diplomats or officials), regardless of their visas, from entering the country from March 22.

This has obviously created issues for companies who rely on foreign employees for their operations, but has also created issues for the local staff.

HR departments have had to issue guidelines at short notice and manage employees to the best of their ability due to quick developments related to the global pandemic.

We list some HR issues that your business might face during this time.

Work stoppage

As per the labor code if a business is required to temporarily suspend operations (maximum two years) due to an epidemic, such as COVID-19, the employer and employee can negotiate a salary during the suspension of operations. However, this cannot be lower than the regional minimum wage. The regional minimum wages were raised in January and vary from US$132 to US$192 depending on the region. This also applies to employees that cannot work due to contracting the virus.

However, Vietnamese laws currently do not explicitly state what businesses (such as bars, clubs, restaurants, movie theaters) are supposed to do when they are forced to shut down by the authorities. The Ministry of Labor, Invalids and Social Affairs (MOLISA) in its Official Letter 1064/LĐTBXH-QHLĐTL has stated that depending on the reasons for the work stoppage, the payment of salary during the work stoppage can be considered.

Leaves and social Insurance

Regarding social insurance (SI) contribution, employees that take an unpaid leave of 14 days or more in a month, are not subject to SI participation and thus do not have to pay SI premium or enjoy SI benefits for the period. SI premium by the employer and employees are still applicable for employees that take annual leave or unpaid leave of less than 14 days.

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This article is produced by Vietnam Briefing, a premium source of information for investors looking to set up and conduct business in Vietnam. The site is a publishing arm of Dezan Shira & Associates, a leading foreign investment consultancy in Asia with over 27 years of experience assisting businesses with market entry, site selection, legal, tax, accounting, HR and payroll services throughout the region.

Dezan Shira & Associates is pleased to introduce our Covid-19 portal, dedicated to providing businesses with an extensive roundup of the latest developments, policy updates, and solutions to help manage your business operation during the outbreak. Checking in daily to keep up to date with new updates!

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