Things To Know For Effective Management Of Foreign Employees
April 7, 2021
Foreign employees have become an increasingly important labor force for many businesses, but how to effectively recruit and manage foreign employees is no easy task. Without a proper understanding of the regulations, businesses are likely to encounter a lot of problems with the management and hiring of expatriates.
Recruitment of foreign employees should meet the personnel needs of specific positions.
Regulations on recruitment of foreign employees
The recruitment process of foreign employees needs to meet the company’s requirements and comply with the Local Government regulations. Some crucial principles are as follows:
Recruitment of foreign employees should meet the personnel needs of specific positions such as managerial, executive, specialist, and technical jobs for which Vietnamese employees are not qualified.
Recruitment should ensure the recruitment registration procedures, issuance of visas, and a labor contract signed between the Vietnamese entity and the employee in accordance with the law.
During the recruitment process, businesses need to carefully check labor records on a legal basis to avoid risks for both the company and its employees. Meanwhile, the employer must possess specific knowledge of the latest law, understand the procedures and required documents (qualifications, personnel capability, guarantee papers from the company, etc.) to save time for cumbrous administrative procedures.
Taxes and fees to be paid when managing foreign employees
To pay personal income tax for expatriates, businesses need to determine first-hand the classification of residents and non-residents, with progressive tax rates prescribed by law.
Expat employees are required to participate in compulsory social insurance, except in some instances. As the contribution rates are frequently changed, it is mandatory to keep updated with the changes in each period; for example, the rate of social insurance deduction for employers will increase from 3.5% to 17.5% starting on January 1/2022.
Salary, bonus, and job requirements for expatriates are entirely different from domestic employees, leading to different payroll calculation methods, thereby adding more complexity and workload to the in-house HR department. Minor errors occurring in wage calculations can result in significant business and legal issues.
The above information summarizes the primary initial procedures for recruiting and managing the foreign labor force. The implementation process is a real challenge, requiring in-depth knowledge and experience to optimize time, effort, and job performance. Therefore, it is of paramount importance for businesses to have a professional partner handle the whole implementation process and tackle any arising problem such as Talentnet. Using Talentnet’s expatriate management service helps businesses reduce the pressure on legal procedures and optimize costs thanks to its intelligent salary policy tailored to each customer business’s specifics.