What is Human Resource Management Compliance (HR Compliance)?

Human Resource Management Compliance (HR Compliance) is ensuring that an organization's policies and procedures are consistent with legal requirements and ethical principles. HR compliance includes compliance with laws, regulations, and industry standards related to human resource management activities in the host country. When expanding operations abroad, businesses need to focus on consistently complying with the law, building a unified working culture throughout the organization, consistent with the culture and working environment of the host country.

As with businesses operating in Vietnam, they need to comply with labor-related laws including the 2019 Labor Code, the 2015 Law on Occupational Safety and Hygiene, and the 2013 Law on Employment. In addition, there are a number of other laws and regulations such as the 2024 Law on Social Insurance, the 2013 Law on Trade Unions, the latest regulations on Regional Minimum Wages, the 2007 Law on Personal Income Tax, the 2019 Law on Tax Administration, and the 2006 Law on Gender Equality.

1.   What does HR compliance include?

• Equal employment opportunities: Ensure Non-discrimination policies, promotion, salary and bonus payments, and the implementation of other labor law adherence
• Wage and hour compliance: Comply with regulations on minimum wages, overtime, or regulations on minimum age for participation in labor.
• Workplace safety regulations: Build and ensure a safe and healthy working environment for employees
• Data security: Take adequate measures to protect employees' personal information.
• Welfare regime: Ensure compliance with regulations related to welfare, such as social insurance, health insurance.
• Leave regime: Comply with regulations on family leave, sick leave, paid leave and other leave regimes. 

Benefits and compensation compliance for employee

>>>Read more: The Role of Human Resource Compliance Personnel

2. Why do all businesses need to comply with HR?

Complying with legal regulations on human resource management helps businesses avoid legal risks and employee rights protection. For example, according to Decree 12/2022/ND-CP, if a business requires employees to work overtime, they can be fined from 40 to 50 million VND (about 1,538 - 1,923 USD).

In addition to complying with the law, businesses also need to maintain their employer brand image and create a positive working environment. Human resource-related violations, especially in large businesses, often attract media attention, leading to negative public reviews and affecting reputation.

In addition, non-compliance with human resource management (HR compliance) can reduce employee engagement, increase turnover rates, and lose opportunities to cooperate with potential partners and customers. Therefore, HR compliance not only helps businesses avoid risks but also contributes to the sustainable development of the organization.

3. Important compliance issues for businesses in Vietnam

As a trusted human resource partner of domestic and foreign businesses, Faro Vietnam Vietnam leverages its expertise and experience to support businesses in properly and completely complying with processes in human resource management activities.

3.1 Important HR compliance issues that businesses need to pay attention to

• Comply with legal regulations on Tax, Social Insurance, Labor/Employment
• Assess the current level of compliance of the business with current Vietnamese legal regulations
• Identify and fix gaps in compliance with tax, social insurance, labor and employment standards

3.2 Guide businesses to:

• Register for compulsory social insurance, health insurance and unemployment insurance for employees and make full contributions of the business
• Comply with the Vietnamese Labor Code on labor contracts, working hours, leave regimes and contract termination procedures, ...
• Ensure accurate recording and calculation of salaries for employees; Conduct regular internal audits
• Keep up to date with legal changes in Vietnam to adjust HR policies appropriately

3.3 Compare and develop salary levels

• Develop a customized salary structure based on specific criteria (industry, field, province, job function), ensuring compliance with salary regulations in Vietnam
• Ensure the salary and bonus framework is consistent with the general market level and current legal requirements in Vietnam

3.4 Check employee background and references

• Verify previous work history and education
• Check the honesty of candidates in declaring salary and related financial information

Important HR compliance issues that businesses need to pay attention to

4. Obstacles for businesses in HR compliance

In recent years, the popularity of remote work and concerns about data privacy in the digital age have made ensuring HR compliance at businesses more complicated.

However, the biggest challenge most companies face when it comes to ensuring HR compliance is keeping up with the complex legal landscape with constantly changing laws and regulations. This is even more complex for multinational businesses.

For example, a common feature in most countries in the Asia-Pacific and Middle East is that company executives and directors can face maximum penalties of criminal prosecution for violating labor and employment laws and regulations.

Here are some examples of “strict and different” regulations in the field of labor management in countries

In the Philippines, it is illegal to hire workers through a labor leasing agency where the agency/contractor does not provide equipment or a workplace, and does not manage the workers, other than the labor contract.

In Australia, benefits and compensation compliance such as Wage and hour compliance, leave, severance pay and other benefits vary depending on the type of industry or job, and are regulated in about 100 separate sets of regulations.

In the UAE Free Zones, the number of employment visas a company can apply for depends on the size of its office space.

When it comes to compliance, even the smallest details can make a big difference and pose a high risk. Even in places with specific regulations on hiring people with disabilities, such as Japan, Thailand and South Korea, there are significant differences in detail, such as hiring and termination practices.

5. Why choose Faro Vietnam?

Faro Vietnam is the world's leading HR solutions company, with over 17 years of experience and outstanding expertise in finding and managing talent, providing businesses with:

• In-depth expertise: Proud to be a leading HR solutions company with decades of experience, we have a deep understanding of human resources issues.
• Global network: Faro Vietnam's extensive connection system helps your business ensure compliance with Immigration and work permit compliance in every market.
• Proactive solutions: We not only handle problems when they arise, but also help you identify risks early and build appropriate compliance strategies.
• Modern technology: Optimize HR processes, secure data and improve operational efficiency thanks to advanced technology platforms.
• Minimize legal risks: Faro Vietnam helps businesses proactively handle compliance issues and minimize financial risks.
• Build a positive working environment: Good compliance with HR regulations contributes to improving Employee classification rules and engagement.
• Enhance business reputation: Demonstrate commitment to ethical standards in business, thereby attracting high-quality talent.
• Contact Faro Vietnam today for a free consultation and discover specialized and flexible HR solutions that help your business grow and always ensure compliance in any market.

Faro Vietnam

• Email: service@farovietnam.com.vn

HANOI HEAD OFFICE

• Tel: + 84 24 3974 3091

HO CHI MINH CITY OFFICE

• Tel: + 84 28 3821 4654

Grow your business with our trusted Human Resource Solutions.