A margin deposit is a kind of demand deposit or term deposit made by a company at a bank to guarantee that the company will fulfil a financial commitment to the bank and related parties. Do Vietnamese workers who want to work abroad have to make a deposit, if so, how is this deposit handled in Vietnam?
Deposit of Vietnamese guest workers
Article 25 of the Law on Vietnamese guest workers in 2020 stipulates the deposit of workers as follows:
- Service enterprises shall agree with workers on deposit payments to ensure execution of obligations according to contracts for the provision of Vietnamese guest worker service according to Vietnamese regulations or agreements with foreign employment receivers.
- Workers shall agree with service enterprises on depositing deposit payments in escrow accounts of workers at banks.
- Workers shall receive both the principal and interest of
deposit payments when liquidating contracts for the provision of
Vietnamese guest worker service.
In case workers violate obligations under contracts for the provision of Vietnamese guest worker service, deposit payments of workers shall be utilized by service enterprises to pay for damages arising due to workers' faults; the remaining deposit payments shall be returned to workers; in case of insufficient deposit payments, workers must submit additional deposit payments. - In case of conflicts over service enterprises not paying deposit payments, workers have the right to request the Ministry of Labor – Invalid and Social Affairs or file lawsuits as per the law.
- The Government shall stipulate the maximum deposit level applicable to workers as suitable to each market, profession, occupation, or job and the management, use, and refund of deposits.
Thus, Vietnamese workers who want to work abroad under a contract must deposit a deposit and the handling of the deposit is regulated as above.
Originally published September 3, 2022
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