HR Compliance Service

HR compliance refers to ensuring that a company’s policies and procedures are in line with legal requirements and ethical principles. This means adhering to laws, regulations, and industry standards that govern human resources practices.

For instance, employers in Vietnam must abide by various labor laws, including the Labor Code of Vietnam 2019, Law On Occupational Safety And Hygiene 2015, Law on Employment 2013, among others. Other laws that Vietnamese businesses need to adhere to include Law on Social Insurance 2024, Law on Trade Union 2013, Regional Minimum Wage Policy, Law on Personal Income Tax 2007, Law on Tax Administration 2019, and Law on Gender Equality 2006.

Companies operating or looking to scale regionally or globally should also look at maintaining a consistent process of staying compliant as well as work culture within the organization across the globe.

Areas of HR compliance include:

Equal Employment Opportunity: Ensuring non-discrimination in hiring, promotion, compensation, and other employment practices.

Wage and Hour Laws: Complying with minimum wage, overtime, and child labor laws.

Safety and Health: Providing a safe and healthy work environment.

Data Privacy: Protecting employee personal information.

Employee Benefits: Ensuring compliance with benefits laws, such as social insurance, health insurance.

Leave Laws: Adhering to laws related to family and medical leave, paid time off, and other leave entitlements.

One of the most pressing reasons for compliance is to prevent legal repercussions and to safeguard workers’ rights. For example, under Decree 12/2022/ND-CP, employers in Vietnam who require employees to work beyond legal hours may face fines of VND 40 - 50 million (approximately USD 1,538 to USD 1,923 at exchange rate of 1 USD = 38,000 VND).

Beyond avoiding legal penalties, HR compliance is crucial for maintaining a company's employer branding and fostering a positive workplace environment. Violations of laws and regulations are often reported in the media, which can lead to public scrutiny and damage to the company's image.

Additionally, non-compliance can result in decreased employee morale, higher turnover rates, and potential loss of business opportunities. Ensuring compliance not only protects the company legally but also contributes to its overall success and sustainability.

1. Regulatory Compliance: Tax, Social Insurance, and Labor/Employment

• Assessing businesses’ current levels of compliance with local regulations

• Identifying and addressing gaps in adherence to tax, social insurance, and labor standards

• Guiding decision-makers to

  • Register employees for compulsory social, health, and unemployment insurance with full contributions

  • Comply with the Labor Code of Vietnam on contracts, working hours, leave entitlements, and termination procedures

  • Maintain accurate payroll records and conduct regular internal audits

  • Stay informed with regulatory updates to align HR policies

2. Salary Benchmarking

• Building customized salary structures by specific criteria (industry, sector, province, job function), ensuring compliance with Vietnam’s Wage regulations

• Ensuring compensation frameworks align with market trends and legal requirements

3. Employee Background and Reference Checks

• Verifying previous employment history and academic qualifications

• Screening for financial integrity

   

To ensure HR compliance, organizations can:

• Identify relevant compliance obligations based on factors like location, industry, and business size.

• Stay updated on legal changes by subscribing to industry newsletters or following relevant news sources.

• Assign compliance responsibilities within the HR team, potentially hiring a dedicated compliance officer.

• Create an HR compliance checklist to cover areas like recruiting, hiring, company policies, and employee handbooks.

• Ensure consistent application of HR policies through clear procedures, documentation, and manager training.

• Regularly audit HR policies to ensure compliance and update them as needed.

Apart from managing it internally, collaborating with local experts or partnering with HR service providers is one way of ensuring compliance with local laws and regulations.

Companies can mitigate compliance risks by leveraging on the expertise of HR service providers like Manpower Vietnam for the following:

• Outsourcing of specific business operations or tasks

• Staffing services

• Payrolling services

• Outplacement of excess employees

• HR Compliance

Note that Manpower Vietnam is not a law firm. The information provided here is intended to help clients better understand how to ensure compliance with laws, regulations, and industry standards related to human resource management in Vietnam, as well as the services offered by Manpower Vietnam. Please consult with an attorney if you have any questions regarding labor/employment law in Vietnam.