Phuoc & Partners – Vietnam International Law Firm

GREAT TIPS FOR ATTRACTING HUMAN RESOURCES

In the modern working environment, salary and bonus are only a small part of the comprehensive picture of employee benefits. In addition to receiving salaries and bonuses, other benefits and incentives that companies provide are also of great interest to employees. The concept of “employee benefits” is not simply providing benefits, but also reflects the fairness and compliance with legal regulations in the treatment of employees. In the context of fierce competition between companies to attract and retain talented candidates, building attractive employee benefits policies contributes to promoting the sustainable development of human resources in particular and the organisation in general, becomes a decisive factor in business success. Employee benefits can be understood as rewards and interests that employees receive based on their contributions to the development of a company, including not only salaries and bonuses but also health benefits for employees, benefits for their families, as well as other training and career development programs. Employee benefits not only help improve the quality of employees’ material lives but also create a positive working environment, motivating them to achieve personal and organisational goals. Although employee benefits are often developed based on the specific needs of each business, there are a number of legal factors that need to be considered to ensure fairness and compliance with the law, including regulations on salaries, bonuses, social insurance, and other special benefits that companies shall comply. Below is some analysis of the legal aspects surrounding the topic of Employee benefits – Great tips for attracting human resources.

  1. The role of employee benefits

    1.1. For employees:

Employee benefits is one of the important criteria that employees always prioritise when choosing a job, in addition to other factors such as work location, job salary, career path suitable to your own orientation… This is understandable because employee benefits directly affect the quality of life, level of satisfaction and future plans of employees. The reputation of a company is also reflected in the care that the company provide to its employees, both in terms of material and spiritual life. Therefore, multinational corporations and global brands frequently provide better and more diverse employee benefits policies not only for employees but also for their families so that employees can feel secure about their personal lives and devote themselves to the development of the business.

1.2 For companies:

Employee benefits policies are not only a way to attract and retain talent but also a motivation to drive employees to devote and contribute their best to the company. A company with good employee benefits policies will encourage employees both physically and spiritually, thereby improving their work performance and quality of products. This also helps companies maintain stable operations, enhance reputation and attract quality human resources.

1.3       For society:

Good and fair employee benefits policies for employees helps create a society with a stable and healthy life, thereby promoting economic development and reducing the burden of social welfare on the State. In addition, good employee benefits policies also helps reduce social problems such as unemployment, poverty and inequality.

  1. Popular Employee benefits

2.1.      Types of social insurance and benefits

In the labour law system, ensuring basic rights for employees is considered a top priority. This is shown through employee benefits, in which the social insurance and allowances play an important role as a way to ensure or replace or partially compensate part of an employee’s income when they have a reduction or loss of income due to illness, maternity, work accident, occupational disease, reaching the end of working age or death, on the basis of contributions to the social insurance fund. Accordingly, labour law requires employees and employers to participate in various types of social insurance including compulsory social insurance, unemployment insurance and health insurance if they meet the requirements under the law on social insurance and employment. Accordingly, when participating in compulsory insurance, employees shall receive the following benefits:[1]

Employees participating in compulsory social insurance will enjoy all 5 benefits above, while voluntary participants will only enjoy 2 benefits: retirement and death regime. For special groups of people who are supported by the State to participate in social insurance contributions, they will enjoy additional retirement regimes as per Government’s decision.

In addition to the concepts of compulsory insurance as prescribed by law, the State also encourages companies to provide employees with more diverse insurance packages for employees and their relatives as a way to extend the employee benefits for employees. Paying full insurance and providing health insurance packages that exceed those prescribed by law is not only a legal obligation but also an notable “plus point” in attracting and retaining employees. It can be seen that optimising policies for employees is not only a legal obligation but also a great tips for attracting human resources, contributing to building a positive working environment and improving quality of life of employees, thereby promoting the sustainable development of the economy and society.

2.2.      Rewarding employees with training programs

In the current business environment, attracting and retaining talented employees not only requires attractive income policies but also providing opportunities to develop and improve their career skills. Training programs not only help improve employees’ work efficiency but also motivate employees’ cohesion and contribution to the company.

As per Labour Code, employers are responsible for developing annual training plans and providing financial resources for training and fostering skills for employees. This is not only a legal obligation but also an opportunity to improve the qualifications and performance of employees, thereby promoting the production and business efficiency of the company. One of the important ways to develop employees is through annual professional skills training programs. These training courses not only help employees master new knowledge but also help them apply it effectively in their daily work, thereby increasing productivity and work quality.

In addition, implementing position rotation and job redesign programs also plays an important role in training and developing human resources. By testing new positions and expanding the scope of work, companies can identify and develop a pipeline of potential employees, while promoting creativity and innovation within the organisation. Although investing in training and development for employees may increase production costs, the benefits it brings are undeniable. Highly skilled trained employees will perform their jobs more effectively, helping to increase labour productivity and improve the quality of products and services, thereby creating long-term benefits for businesses. In this context, reporting annual training results to the provincial state labour management agency is not only a legal task but also an opportunity for businesses to demonstrate their commitment to human resource development and promoting sustainable business development.

2.3 Flexible working policy

Within the scope of labour law regulations in Vietnam, working hours play an important role in protecting the rights of employees and creating favourable conditions for production and business activities of companies. According to Article 105 of the Labour Code, an employee’s normal working hours do not exceed 8 hours in a day and 48 hours in a week. In case where a company implements a weekly working hours regime, the employee’s normal working hours must not exceed 10 hours in a day and 48 hours in a week. In order to ensure employees’ right to rest, the State encourages the application of 40 hours of work in a week, a standard considered ideal and reasonable for the working environment. This is especially important in reducing labour stress and enhancing work performance.

Flexible working hours, a new concept in Vietnam’s labour sector that brings flexibility in working time and duration to employees. The parties of the labour relations may agree on working time and allocate their working time based on personal wishes and business requirements. Flexibility in working hours allows employees to choose working hours that suit their needs by day, week, month and year. This is especially important for people with families, minors, the elderly, and highly skilled people, creating favourable conditions for them to find suitable jobs. To implement flexible working hours, employers have the right to set normal working hours of a day, a week and non-working days, based on the specific conditions of each unit and according to general provisions of law. In case it is necessary to adjust working hours, the employer must reach an agreement with the employee through adjusting the signed employment contract and/or shall adjust the internal labour regulations and/or collective labour agreement.

With the advantages of solving unemployment problems, protecting employees’ rights and encouraging gender equality, flexible working hours are attracting much attention. In Vietnam, flexible working hours have been mentioned in some cases such as part-time contract employees and employees work remotely, in order to create favourable conditions for employers and ensure flexibility in labour management.

2.4 Holiday and New Year bonuses and bonuses based on production and business results

According to Article 104 of the Labour Code, holiday and New Year bonuses and bonuses based on production and business results are an important part of the employee benefits policies for employees of companies. Companies must develop bonus policies determined on production and business results and the level of work completion of employees in the year before implementation. These policies are decided by the company and publicly announced at the workplace, after consulting with the employee representative organisation at the grassroots level, in case there is a employee representative organisation and holding a dialogue at the workplace as prescribed by law.[2] Thus, rewarding employees depends on the decisions and policies of each company and is not a mandatory obligation as per law unless the parties have agreed on such bonuses in the employment contract or mentioned in the company’s bonus policies.

In case an company fails to public announce the bonuses policies before applying it or fails to consult with the employee representative organisation at the grassroots level when developing these policies, the company may be subject to a fine of VND10,000,000 to VND20,000,000 under Article 6.1 and Article 17.1 of Decree 12/2022/ND-CP. This regulations ensure fairness and transparency in paying bonuses to employees and for human resources management purposes in general.

In short, paying bonuses to employees is an important part of each enterprise’s employee benefits policies. However, to ensure the legal rights and interests of employees as well as ensure fairness and transparency in payment of bonuses, companies are obliged to build, promulgate and announce bonuses policies and apply them in accordance with the law.

2.5 Periodic health examinations

According to Article 21 of the Law on Occupational Safety and Hygiene, organising health examinations and treatment of occupational diseases for employees is a mandatory requirement for employers. Accordingly, companies shall organise health examinations at least once per year for its employees. For employees doing heavy, hazardous, and dangerous jobs, as well as special cases such as people with disabilities, minors, and the elderly, companies shall organise periodic health examinations for this group of employees at least every 6 months.

In addition, according to Article 21.6 of the Law on Occupational Safety and Hygiene, health examination and treatment costs for employees will be paid by companies and accounted for as deductible expenses unless determining taxable income under the law on corporate incomes tax. In case an company fails to organise periodic health examinations for employees and is discovered by competent state authorities, the company may be subject to a fine from VND2,000,000 to VND6,000,000 for each violation to one employee but not exceeding VND150,000,000 according to Article 6.1 and Article 22.2 of Decree 12/2022/ND-CP.

Thus, compliance with regulations on periodic health examinations and treatment of occupational diseases for employees is not only responsibilities of companies but also shows the care of companies for the health and lives of its employees.

The above is an overview of Employee benefits – Great tips for attracting human resources. If you have difficulties in finding a Law Firm to advise and support in the relevant legal field, please contact us. Phuoc & Partners is a professional consulting firm established in Vietnam and currently has nearly 100 members working in three offices in Ho Chi Minh City, Hanoi and Danang. Phuoc & Partners is also rated as one of the leading consulting firms specialising in business law in Vietnam that has leading practice areas in the legal market such as Labour and Employment, Taxation, Merger and acquisition, Litigation. We are confident in providing customers with optimal and effective services to the Clients.

[1] Article 4.1. Social Insurance Law 2014

[2] Article 104 and Article 63.2(c) of the 2019 Labour Code and Article 41 of Decree 145/2020/ND-CP

Summary
Article Name
GREAT TIPS FOR ATTRACTING HUMAN RESOURCES
Description
In the modern working environment, salary and bonus are only a small part of the comprehensive picture of employee benefits. In addition to receiving salaries