What Conditions Must Driver-Leasing Businesses Satisfy?

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“Driver leasing” is in fact a form of labor sub-leasing — the employee signs a labor contract with the sub-leasing enterprise, and is then transferred to work under the management of another enterprise (the sub-lessee). This is a conditional business line: only enterprises granted a License for Labor Sub-Leasing Operations may engage in it, and only for certain jobs, under the Labor Code 2019 and Decree No. 145/2020/ND-CP.

What Is Labor Sub-Leasing?

Under Article 52 of the Labor Code 2019, labor sub-leasing means that an employee enters into a labor contract with an employer that is a labor sub-leasing enterprise, and the employee is then transferred to work under the management of another employer while maintaining the labor relationship with the enterprise that entered into the labor contract.

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Thus, the model of “a company supplying drivers to another enterprise” — where drivers sign contracts with the supplying company but daily drive and take assignments from the user enterprise — is precisely labor sub-leasing and must fully comply with the conditions prescribed by law.

Conditions for Granting the Labor Sub-Leasing Operation License

Under Decree No. 145/2020/ND-CP, an enterprise is granted the license when it satisfies the following conditions:

1. Deposit: the enterprise must deposit VND 2 billion at a commercial bank to secure its obligations toward sub-leased employees.

2. Charter capital: satisfying the capital requirement as prescribed (the enterprise must have charter capital in accordance with the law on labor sub-leasing).

3. Legal representative: satisfying the prescribed standards on qualifications and experience.

4. Other conditions: having stable operating premises, satisfying requirements on facilities, and other conditions under Decree No. 145/2020/ND-CP.

Sub-Leasing Is Only Permitted for Certain Jobs

The law limits the list of jobs eligible for labor sub-leasing (Appendix II issued with Decree No. 145/2020/ND-CP), including support, seasonal, or special-nature jobs such as: interpreters, administrative secretaries, receptionists, tour guides, drivers, and the like. Enterprises may not sub-lease labor for jobs outside the list, nor sub-lease employees to replace employees who are on strike or during the resolution of labor disputes.

Obligations of Labor Sub-Leasing Enterprises

A sub-leasing enterprise must: sign labor contracts with sub-leased employees; ensure that the salary of sub-leased employees is not lower than that of employees of the same qualifications performing the same work at the sub-lessee; fully perform social, health, and unemployment insurance obligations; not collect fees from employees; and only sub-lease after being granted the license.

Risks of Unlicensed Operations

Supplying drivers or employees to other enterprises without a License for Labor Sub-Leasing Operations is a violation of law, and may result in administrative penalties with high fines, suspension of operations, and liability to compensate employees for damages. The sub-lessee of labor from an unlicensed unit also faces legal risks regarding labor relations and social insurance obligations.

Need advice on the conditions, drafting the dossier for a Labor Sub-Leasing Operation License, or reviewing your staffing supply model? Please contact ANT Legal’s lawyers via Hotline/Zalo 0966.475.966 for case-specific consultation.

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