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Labor Outsourcing vs. Labor Dispatch: What's the Difference?

By Nguyễn Quốc Trung — Deputy General Director · Updated 2026-08-25

Quick answer

Labor outsourcing (service outsourcing) is where a provider takes on a defined scope of work as a complete package and, for its own employees, handles recruitment, management, payroll, and insurance; the client company pays a contract fee for the service and does not directly supervise the workers. Labor dispatch (labor sub-leasing) is where workers employed by a licensed enterprise are sent to work for, and come under the direct supervision of, another company for a fixed period, while their employment relationship remains with the dispatching enterprise. The core distinction comes down to two questions: who directs the day-to-day work and who bears the legal obligations toward the workers.

Many businesses confuse these two concepts when looking for a provider, which leads to signing the wrong type of contract and taking on unnecessary legal risk. This article helps you tell them apart so you can choose the right model under the right law.

What is labor outsourcing?

Under the [labor outsourcing](/cung-ung-lao-dong/) model, a business hands a volume of work or a stage of its operations to a provider to carry out: packing, loading and unloading, industrial cleaning, manufacturing a component, running a support line, and so on. The workers performing that work are the provider's employees. The provider is responsible for:

• Recruiting, signing employment contracts, and staffing the assignment.
• Managing, supervising, scheduling shifts, and directing the day-to-day work.
• Paying wages, contributing mandatory social insurance, and administering employee benefits.

The client company simply pays a service fee under the contract and signs off on the results of the work. In principle, the business does not directly manage each individual worker but works with the provider through the provider's own point of coordination.

The advantage of this approach is that the business keeps its own headcount lean, transfers the bulk of its labor and insurance obligations to a professional provider, and concentrates its resources on its core activities.

What is labor dispatch?

Labor dispatch is a conditional activity: only an enterprise granted a labor dispatch license may carry it out. The workers are recruited and put under contract by the dispatching enterprise, but are assigned to work under, and come under the direct supervision of, the hiring party (the user company). The employment relationship — that is, the party that pays wages, contributes insurance, and bears responsibility for the contract — still rests with the dispatching enterprise.

Key features of labor dispatch:

• It applies only to work that falls within the list prescribed by law and for a limited period.
• The enterprise carrying it out must hold a license and meet the conditions set by regulation.
• The hiring party may directly direct and assign work to the workers as if they were its own staff.

Nhân Kiệt holds labor dispatch license No. 15/2019/SHCM, and is therefore able to deliver both models in full compliance with the law, depending on a business's actual needs.

Four differences to remember

• Who directs the work: Service outsourcing — the provider directs. Labor dispatch — the hiring party (your business) directs the work directly.
• Nature of the contract: Service outsourcing is a service contract (you buy the result of the work). Labor dispatch is a labor dispatch contract (you buy time and labor performed under your direction).
• Legal conditions: Service outsourcing does not require a labor dispatch license. Labor dispatch is a conditional business line that mandatorily requires a license, applies only to certain types of work, and is limited in duration.
• Obligations toward workers: In both models, the workers remain under the employment relationship managed by the provider / dispatching enterprise — that party is responsible for paying wages and contributing mandatory social insurance under the Social Insurance Law No. 41/2024/QH15 (effective 01/7/2025) and Decree 158/2025/NĐ-CP.

One thing they have in common: whichever model you choose, personnel costs must be calculated correctly against the regional minimum wage currently in force under Decree 293/2025/NĐ-CP (effective 01/01/2026): Region I 5.310.000 VND, Region II 4.730.000 VND, Region III 4.140.000 VND, Region IV 3.700.000 VND per month. This is the floor for signing contracts and calculating insurance contributions.

Which model should a business choose?

Neither model is absolutely "better" — the choice depends on whether you want to buy the result of the work or buy manpower to direct yourself.

• If you want to hand over an entire stage of your operations and would rather not worry about managing each person, labor outsourcing (service outsourcing) is the better fit. You sign off on results, and the provider handles the rest.
• If you need people working under the direct supervision of your in-house managers, integrated into your own production process, then labor dispatch is the legally correct path — provided the work falls within the permitted list and the provider holds a license.
• If a foreign company does not yet have a legal entity in Vietnam but still wants to hire and lawfully pay Vietnamese staff, consider the [EOR — Employer of Record](/eor-vietnam/) service, a distinct alternative to both of the models above.

Whichever path you choose, [calculating wages and contributions](/tinh-luong-thue-ngoai/) lawfully and transparently is the decisive factor in avoiding disputes and back-charges down the line.

Why choose Nhân Kiệt?

Nhân Kiệt Manpower Supply Co., Ltd. (Tax ID 0308022768) has operated since April 2009 and is now in its 17th year in labor supply and management. Nhân Kiệt holds labor dispatch license No. 15/2019/SHCM and a management system certified to ISO 9001:2015, ISO 45001, and ISO 14001.

To date, Nhân Kiệt serves more than 40,000 workers and over 500 clients across 34 provinces and cities, with more than 200 operations staff. Among the supply projects it has delivered are Viettel with more than 10,000 workers, Saigon Stec more than 2,000, Vinataba and Aldila with more than 1,000 each, LG more than 700, and Samsung SEHC and Masan with more than 600 workers each. Other notable clients include Samsung, Panasonic, POSCO, Siemens, LEGO, Pandora, Vietnam Airlines, Vietcombank, Abbott, Vinamilk, DHL, AEON, Shopee, and Lazada.

This experience allows Nhân Kiệt to advise each business on which model to choose to stay compliant and fit its operating model, rather than forcing a single template onto every case.

Contact us for advice

If you are weighing labor outsourcing against labor dispatch, let the Nhân Kiệt team review your needs together with you and propose a legally compliant solution for your business.

• Nguyễn Quốc Trung — Deputy General Director
• Phone: 0908 636 108 · Email: trungnguyen@nhankiet.vn
• Office: Room 202, Building 57, 57 Lê Thị Hồng Gấm, Bến Thành Ward, Ho Chi Minh City · Tel 028 3505 4224

Explore related services: [labor outsourcing](/cung-ung-lao-dong/), [labor and insurance formalization](/hop-thuc-hoa-lao-dong/), [outsourced payroll](/tinh-luong-thue-ngoai/), and [EOR in Vietnam](/eor-vietnam/).

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