Professional employer organization Vietnam 2025

Formed from the actual need to hire labor of businesses in recent years, the trend of labor leasing has become an important part of the economy. It is a solution that helps businesses proactively staff production plans when they have not yet recruited or in urgent situations where they only need personnel for a short period of time or suddenly. Labor leasing creates more opportunities for employees and employers to easily find each other. However, along with the advantages, labor leasing also has many limitations and shortcomings.

1. Legal regulations on the establishment of labor leasing enterprises

Labor leasing is a conditional activity, in which an employee signs a labor contract with an employer that is a labor leasing enterprise, after which the employee is transferred to work and is under the management of another employer while still maintaining the labor relationship with the employer that signed the labor contract. According to Article 54 of the 2019 Labor Code and the guidance in Article 12, Article 21 of Decree 145/2020, professional employer organization vietnam is established under the Law on Enterprises and must ensure the following conditions:

  • Be granted a license to operate labor leasing. Enterprises must have a labor leasing license to perform this service. To be granted a license, enterprises must ensure the conditions prescribed in Article 21 of Decree 145/2020.
    – The enterprise has made a deposit. The enterprise must make a deposit at the prescribed level of VND 2,000,000,000 (two billion VND).
  • Legal representative of the enterprise. The legal representative of the enterprise performing labor leasing activities must ensure the following conditions: Being a business manager according to the provisions of the Law on Enterprises. No criminal record. Having directly worked in the field of expertise or management in labor leasing or labor supply for at least 03 years within 05 consecutive years before applying for a license.
  • Recruiting and signing labor contracts with employees. This is the most important condition in the labor leasing relationship.

What is a PEO and How Can It Help Your Business?

2. Rights and obligations of subjects participating in labor leasing activities

Unlike other labor legal relationships, peo vietnam for foreign businesses relationships always involve three subjects: the labor lessor, the labor lessee, and the employee. Therefore, the parties in the labor leasing relationship, in addition to complying with the provisions on rights and obligations stipulated in Article 6 of the 2019 Labor Code, must also comply with the rights and obligations specific to the labor leasing legal relationship.

2.1 Rights and obligations of labor leasing enterprises

According to Article 56 of the 2019 Labor Code, the rights and obligations of labor leasing enterprises are determined through signed contracts, with the following responsibilities:

  • Ensure that the labor leasing enterprise provides qualified workers in accordance with the requirements of the labor leasing party and the content of the labor contract signed with the employee.
  • Notify the employee of the content of the labor leasing contract.
  • Notify the labor leasing party of the employee’s resume and the employee’s requirements.
  • Ensure that the salary paid to the leased worker is not lower than the salary of the labor leasing party’s employees with the same qualifications, doing the same job or work of equal value.
  • Prepare a record clearly stating the number of leased workers, the labor leasing party and periodically report to the specialized labor agency under the People’s Committee of the provincial level.
  • Disciplinary action against employees who violate labor discipline when the labor lessee returns the employee due to violation of labor discipline.

Vietnam Professional Employer Organization (PEO)

2.2 Rights and obligations of the labor lessee

Like the labor lessor, Article 56 of the 2019 Labor Code stipulates the responsibilities that the labor lessee must perform in addition to complying with the rights and obligations agreed upon in the hire staff in vietnam contract. Accordingly, including the following rights and obligations:

  • Notify and guide the leased employee about the labor regulations and other regulations of the company.
  • Not discriminate in terms of working conditions for leased employees compared to the company’s own employees.
  • Agree with the leased employee on working at night and overtime in accordance with the provisions of the Labor Code.
  • Negotiate with the re-hired employee and the labor leasing enterprise to officially recruit the re-hired employee to work for them in case the re-hired employee’s labor contract with the labor leasing enterprise has not yet ended.
  • Return the re-hired employee who does not meet the agreed requirements or violates labor discipline to the labor leasing enterprise.
  • Provide the labor leasing enterprise with evidence of the re-hired employee’s violation of labor discipline for consideration of handling labor discipline.

Leasing and subleasing labor is an economical, flexible and effective solution, allowing businesses to quickly meet their appropriate human resource needs. However, it is important to comply with the regulations on labor subleasing activities to avoid violating the law. In which, hire employees in vietnam without entity is illegal.

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