During a recent review of the Law on Employment, enacted in 2013, the Ministry of Labor, Invalids and Social Affairs (MoLISA) revealed that there are currently more than 500 employment service companies operating around Vietnam, in regions with well-developed labor markets and especially near industrial parks and export processing zones in Hanoi, Ho Chi Minh City, and southern Binh Duong province.

Such enterprises primarily specialize in providing and matching skilled workers with employment opportunities, focusing on high-level technical professionals and managerial personnel. Employer clients include large corporations, multinational companies (MNCs), and foreign-invested enterprises (FIEs).

The operational framework for employment service companies has become increasingly well-defined, operating in accordance with the Law on Enterprises and related guidelines and managing their workforce under the Labor Code.

These businesses must secure licenses to offer employment services, meeting requirements such as maintaining an office, employing dedicated staff, including at least three employees with college degrees or higher, and placing a VND300 million ($11,900) deposit, as regulated by the Law on Employment and its guidelines.

With nearly 2,000 qualified and experienced staff members, these companies provide job placement and consultation to tens of thousands of workers and thousands of companies each year. They also deliver recruitment consulting services, effectively managing and utilizing Vietnam’s high-quality human resources.

MoLISA has acknowledged that employment service companies play a crucial role in linking workers with jobs. However, there remains a limited sharing of labor market information between these companies and official Employment Service Centers, and there is a lack of specific regulations regarding public-private partnerships (PPPs) in employment services.

Employment services are also considered a regulated business activity in Vietnam, and companies involved are permitted to charge fees to both workers and employers, as outlined in Circular No. 72/2016/TT-BTC from the Ministry of Finance.

Since January 1, 2017, employment service fees have been determined by market forces. Prices are therefore set by the companies themselves, based on the costs incurred in delivering appropriate services.

Revised pricing regulations

MoLISA has proposed updates to the draft revised Law on Employment, including new regulations for PPPs in employment services and adjustments to the pricing framework for such services, in line with pricing laws.

Under its proposed changes, enterprises will be allowed to charge fees for employment services according to legal standards and will need to display these prices publicly.

The revised law also aims to broaden the scope of employment service activities, encompassing career counseling, vocational training, employment services, and advice on labor policy. It will also include services related to recruitment, labor management consulting, and job placement for workers.

Companies will also be responsible for labor supply and matching based on the needs of organizations and individuals, collecting and providing labor market information, analyzing and forecasting market trends, and offering skills training and vocational education. They will also take part in various employment programs and projects.

New regulations are to specify the conditions for establishing branches of employment service companies. These companies must notify the provincial employment authority where their service license is issued and where the branch will be located at least ten working days before providing employment services.

The draft also stipulates that companies must meet the following criteria to secure an employment service license: (1) have the necessary facilities and equipment for providing employment services, (2) employ qualified management and consultants, and (3) place the required deposit as set by the government. The license will be valid for up to five years.

Regulations will be set by the government on deposits, conditions, documentation, and procedures for issuing, renewing, extending, or revoking employment service licenses, as well as for the withdrawal of deposited funds related to these activities.