Cases of employment service businesses entitled to withdrawal of security deposits in Vietnam

Cases of employment service businesses entitled to withdrawal of security deposits in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Cases of employment service businesses entitled to withdrawal of security deposits in Vietnam

According to Clause 1, Article 26 of Decree 23/2021/ND-CP, the state authority having competence in issuing, renewing, reissuing and revoking the license at the place where its main office is located can issue the decision to allow the business to withdraw security deposit in the following cases:

- The business is not allowed the license;

- The business has their license revoked or is not granted renewal or reissuance of their license;

- The business has left security deposit at another custodian bank;

- The business faces difficulties, is incapable of indemnifying employees or employers due to their commission of violations against regulations on employment services within 60 days after the due date of payment of indemnity as per law.    

2. Application for withdrawal of security deposit of employment service businesses in Vietnam

According to Clauses 2 and 3, Article 26 of Decree 23/2021/ND-CP, the applications for withdrawal of security deposit of employment service businesses are as follows:

- Application documents for withdrawal of security deposit filed to the Department of Labor, War Invalids and Social Affairs, including:

+ Written request for withdrawal made by the business;

+ Certificate of security deposit for rendering of employment services issued by another custodian bank in case of withdrawal of security deposit as prescribed in point c of clause 1 of Article 26 of Decree 23/2021/ND-CP;

+ Report on fulfillment of obligations and written document evidencing fulfillment of obligations in case of withdrawal of security deposit as stipulated in point b of clause 1 of Article 26 of Decree 23/2021/ND-CP;

+ Plan for use of the sum withdrawn from the escrow account, including information about withdrawal reasons and purposes; list of employees, employers, amount, time and method of payment in case of withdrawal of security deposit as per point d of clause 1 of Article 26 of Decree 23/2021/ND-CP.

- Application documents for withdrawal of security deposit submitted to the custodian bank, including:

+ Written request for withdrawal made by the business as per point a of clause 2 of Article 26 of Decree 23/2021/ND-CP;

+ Written document stating consent to withdrawal of security deposit from the competent state authority according to the Form No. 07 of Appendix II to Decree 23/2021/ND-CP;

+ Documents evidencing withdrawal of security deposit that are required by the custodian bank (if any).

3. Processes and procedures for withdrawal of security deposits of employment service businesses in Vietnam

According to Clause 4, Article 26 of Decree 23/2021/ND-CP, processes and procedures for withdrawal of security deposits:

- The business sends 01 set of application documents prescribed in Article 2 of Decree 23/2021/ND-CP to the Department of Labor, War Invalids and Social Affairs of the place where its main office is located;

- The Department of Labor, War Invalids and Social Affairs receives these documents, checks and issues the note of acknowledgement clearly stating the date of receipt.

Within the maximum duration of 07 working days of receipt of the application documents from the business, the Department of Labor, War Invalids and Social Affairs checks and verifies submitted documents and their fulfillment of employment service obligations in the cases specified in point b of clause 1 of Article 26 of Decree 23/2021/ND-CP, and requests the relevant competent state authority to issue the written consent to withdrawal of security deposit, the plan for use of security deposit (if any) and sends such written consent to the business and the custodian bank.

In case of refusal to allow withdrawal of security deposit, a written response clearly stating reasons for such refusal must be sent to the business;

- After receipt of the written consent to withdrawal of security deposit from the competent state authority, the business submits documents required in clause 3 of Article 26 of Decree 23/2021/ND-CP to the custodian bank;

- The custodian bank receives and examines submitted documents. If it is established that the documents meet regulations, the custodian bank must allow the business to withdraw security deposit within 01 working day of receipt of the documents submitted to request withdrawal.

In case of withdrawal of security deposit subject to point d of clause 1 of Article 26 of Decree 23/2021/ND-CP, payment or payment of indemnities to employees or employers shall be directly made by the custodian bank according to the plan approved by the competent state authority after the bank's service fees are taken away.

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