Whether you're a business looking to hire talent or an employee seeking to understand your rights, navigating Vietnam’s labor regulations can be complex. This guide breaks down the key aspects of Vietnam's labor law—covering recruitment, contracts, wages, work permits, termination, and employee benefits—so that you can stay informed and compliant.
1. Hiring and Recruitment: What Employers Need to Know
In Vietnam, foreign-invested companies (FICs) can hire Vietnamese employees either directly or through licensed recruitment agencies. However, before filling a position, employers must publicly announce job vacancies at least seven days in advance, detailing job descriptions, required qualifications, and employment conditions.
For foreign workers, employment in Vietnam is regulated by specific conditions. Foreigners can work in Vietnam under the following circumstances:
- Employment under a labor contract.
- Internal company transfers from multinational companies.
- Execution of economic, financial, or educational contracts.
- Participation in service provisions, negotiations, or non-governmental activities.
To qualify, foreign employees must: ✔ Be at least 18 years old.
✔ Have no criminal record related to national security.
✔ Possess relevant qualifications, experience, and a valid work permit (unless exempt).
Work permit exemptions apply to certain categories, such as foreign investors, board members, and those working on short-term projects of less than three months.
2. Labor Contracts: Fixed, Flexible, and Probationary Terms
Vietnam’s labor laws recognize three main types of labor contracts:
- Indefinite-term contracts (no fixed expiration date).
- Fixed-term contracts (lasting between 12 to 36 months).
- Short-term contracts (for temporary work of less than 12 months).
All contracts exceeding three months must be in writing, clearly stating details such as salary, work hours, job descriptions, and termination conditions. Probationary periods are allowed but must not exceed:
- 60 days for highly specialized positions.
- 30 days for intermediate-level jobs.
- 6 days for unskilled labor.
During probation, either party can terminate employment without notice.
3. Employee Termination: Rights and Responsibilities
Vietnamese labor law sets strict conditions for terminating employment, whether initiated by the employee or employer.
Employee Resignation Rights
Employees under fixed-term contracts (12-36 months) can resign early under certain conditions, such as:
- Employer breaches contract terms (e.g., non-payment of salary).
- Harassment or unsafe working conditions.
- Health issues requiring prolonged treatment.
- Pregnancy requiring work cessation (as advised by a doctor).
Employees on indefinite-term contracts can resign for any reason, provided they give 45 days' notice.
Employer-Initiated Termination
Employers can only terminate employees under specific conditions, such as:
- Consistent failure to perform job duties.
- Violations of workplace discipline.
- Business downsizing due to economic downturns or restructuring.
- Extended illness preventing continued employment.
In most cases, termination requires prior notice and severance pay, except in cases of gross misconduct.
4. Wages, Overtime, and Benefits
Vietnam mandates regional minimum wages, which vary based on location and cost of living. The government regularly updates these rates, and all businesses—both local and foreign—must comply.
Overtime Pay Regulations
Vietnam strictly regulates working hours:
- Standard workweek: 48 hours (8 hours/day, 6 days/week).
- Maximum overtime: 40 hours/month and 200-300 hours/year (depending on industry needs).
Overtime compensation:
- 150% of regular pay for extra hours on a workday.
- 200% for work on a weekly rest day.
- 300% for work on public holidays.
Paid Leave and Holidays
Employees are entitled to:
- 12 days of annual leave, increasing by 1 extra day every 5 years of continuous employment.
- 11 public holidays (plus one extra day for expatriates’ home-country celebrations).
- Personal leave:
- Marriage: 3 days
- Child’s wedding: 1 day
- Family member’s death: 3 days
- Maternity Leave: Female employees receive six months of paid leave, with a minimum of two months post-birth.
5. Work Permits for Foreign Employees
Expatriates working in Vietnam for more than three months must obtain a work permit, valid for up to 36 months and renewable upon request.
The process:
- Employer submits an application to the Department of Labor, Invalids, and Social Affairs (DOLISA).
- Decision issued within 15 days.
- Foreign employees must register with local authorities at least 7 days before starting work.
Who is exempt?
- Foreign investors and board members.
- Employees working in Vietnam for less than three months.
- Lawyers licensed by the Ministry of Justice.
- Professionals providing urgent technical support.
Failure to comply can result in fines, deportation, or business penalties.
6. Trade Unions and Collective Agreements
Trade unions play a key role in protecting employee rights. Companies must allow employees to form grassroots trade unions, which negotiate collective labor agreements (CLAs) covering:
- Wages and bonuses.
- Working conditions.
- Dispute resolution processes.
Employers must recognize and consult trade unions on key employment decisions, including workplace policies and terminations.
7. Social Security and Employee Benefits
Vietnamese labor law mandates contributions to three key funds:
- Social Insurance Fund (SI) – Covers pensions, sick leave, maternity benefits, and work-related injuries.
- Health Insurance Fund (HI) – Provides access to public healthcare.
- Unemployment Insurance Fund (UI) – Offers support during job loss.
Employer and Employee Contributions:
- Social insurance: Employer (17.5%), Employee (8%).
- Health insurance: Employer (3%), Employee (1.5%).
- Unemployment insurance: Employer (1%), Employee (1%).
Foreign employees are exempt from social security contributions, except for those under employment contracts of 12 months or more.
8. Workplace Safety and Anti-Discrimination Protections
Vietnamese law prohibits workplace discrimination based on: ✔ Gender, ethnicity, or nationality.
✔ Religion, beliefs, or social status.
✔ Age, pregnancy, or disability.
Employers must prevent sexual harassment, and victims have the right to terminate contracts without notice. Violations can result in fines up to VND 60 million or criminal charges.
Workplace Safety Standards
- Employers must provide protective equipment for hazardous jobs.
- Regular health checks are required for employees in high-risk industries.
- Violations of occupational safety laws can result in business suspensions or legal action.
Conclusion: Navigating Vietnam's Labor Landscape
Vietnam’s labor laws balance employer interests with strong worker protections, making compliance essential for businesses operating in the country. Whether hiring employees, negotiating contracts, or handling terminations, businesses must stay updated on regulations and ensure their policies align with legal standards.
For employees, knowing your rights to fair wages, safe conditions, and legal protections can empower you in the workplace.