Client: Good day!
I just received a update from my client and they have the following queries w.r.t employment contract and legal advice provided,
1. The employee is recruited at executive level relating to sales and some time need to liason with company employees from different time regions . We would not like to pay overtime, and hence want to mention in the employment contract that “ His current renumeration has taken into account such instances and company will not be paying any additional overtime”.
2. At present, the employee would be a resident representative of CG power systems and in future we would establish a representative office with only 2-3 local Vietnamese (all at executive level).
Will employer still require to consult trade union for termination of employment ( in current instance of resident representative and in future case of representative office)
3 As mentioned in the employment contract, we would like to give lumpsum payment to employee ( including employer’s contributions of social security payments), should that be fine
4 Even in future we will have a liason office and not a branch office and company will not be involved in any financial transactions in Vietnam.
5 What are the various social security contributions( in percentages of salary) to be payable by employer and process for paying them. ( In case if the responsibility cannot be delegated to employee).
6 If we establish a liason office in future, would there be any change in the way income tax/social security contributions payable
Kindly provide the needed information and let me know if you have any queries.
Lawyer: This is reference to your email below. Regarding to your questions, please find our answer as follows:
1. It is impossible to incorporate the clause: “the current remuneration has taken into account such instances and company will not be paying any additional overtime”. This clause shall be declared null under Vietnam Law.
2. The Employer shall only need to consult the Local Trade Union if the Employer unilaterally terminate the Employment. Otherwise, it does not need.
3. For this case, it is ok.
4. In the future, when you have a liaison office in Vietnam and not be involved in any financial transactions in Vietnam, the employer’s contribution of social security payments must be separated.
5. The social security contribution shall be as follows:
– Social insurance: Employee to pay: 8%; Employer to pay: 18%
– Health insurance: Employee to pay: 1,5%; Employer to pay: 3%
– Unemployment insurance: Employee to pay: 1%; Employer to pay: 1%
We also note that salary base for accounting social security contribution must not exceed 20 time of minimum wage. In this case, salary base for accounting social security in this case shall be about 54,000,000VND (2,571USD).
6. If you establish a liaison office in Vietnam, the Employer shall withhold the Social Security Contribution and Personal Income Tax from Salary paid to Employee to pay for the State Agency
