Employment Law in Vietnam

The most important Vietnam labour law applied now is the *Labour Code 2019 applied from 1 January 2021.

The employer who employs from ten (10) or more employees must have the internal labour regulation in writing.

Key Benefits of  internal labour regulation:

• Employer can fully comply local legal requirement
• To guide employee to do the right thing

What are the contents of internal labour regulation?

1. Working hours and rest periods;
2. Order at the workplace;
3. Occupational safety and health;
4. Actions against sexual harassment in the workplace;
5. Protection of the assets and technological and business secrets and intellectual property of the employer;
6. Cases in which reassignment of employees are permitted;
7. Violations against labour regulations and disciplinary measures;
8. Material responsibility;
9. The person having the competence to take disciplinary measures.

Employment Contracts

Is a written contract of employment required?  If so, what main terms must be included in it?

• A written contract / electronic Form
• Verbal Contract (only allowed for less than one month contract)

There are 3 main type of contracts:

• Definite (1-36 months, limited at 2 times without renewal)
• Indefinite (less than a month contract)
• Term <1 month

Does the contract need to be in Vietnamese?

Contracts must be written in Vietnamese, or bilingual versions.

Terms of Employment Contract:

• Employer’s information: employer’s information & Legal Representative according to employer’s business license;
• Employee’s information: full name, date of birth, gender, residence, identity card number or passport number of the person who concludes the contract on the employee’s side;
• Probation, work and duration of the contract;
• Working conditions;
• Obligations and benefits of the Employee;
• Obligations and rights of the Employer;

Terminating the Employment Contract:

• Vietnamese labour law is generally employee-friendly. Employers may only terminate employment unilaterally in limited and specific cases (termination for poor performance is not straightforward).
• Proper documentation of the termination process (e.g., warnings) is required, and termination should normally be mutually agreed.
• Required Notice Periods:
  • Indefinite contracts: Minimum 45 days
  • Definite contracts: Minimum 30 days
  • Contracts under 12 months: Minimum 3 working days
  • Termination and severance payments may also be required.

Vietnamese Labour Laws are highly specific in both nature and application. Employers and employees should carefully review their legal obligations and available options before making decisions.

Salary

• Vietnamese Employees: Salaries stated in employment contracts must be in VND. Employers are required to make payments in VND in accordance with Vietnam’s foreign exchange management regulations.
• Foreign Employees: Salaries may be paid in either VND or foreign currencies.
• Salary Scales: Employers are no longer required to register salary scales with local labour authorities. However, maintaining salary scales is still necessary for internal records and audit purposes.

Working Hours

• Standard working day: According to Article 54, Decree 145/2020/ND-CP, standard working day is the number of normal working days in a month as decided by the employer.
• Working hour: Normal working hours should be 08 hours per day and shall not exceed 10 hours per day or 48 hours per week where a weekly basis is applied. The State encourages employers to apply 40-hour workweeks.
• An employer has the right to determine the daily or weekly working hours and inform the employees accordingly.
• Working hours at night is the period from 10 pm to 6 am.

Overtime

*Regarding overtime payment, only the amount exceeding the normal salary rate (not the whole overtime payment) is exempt from personal income tax.

Dispute Resolution

Employment disputes in Vietnam can be resolved through:

• Mediation: An informal process to reach a mutually agreeable solution.
• Arbitration: A formal process where an arbitrator makes a binding decision.
• Legal Proceedings: Court intervention if mediation and arbitration fail.

Compliance and Best Practices

Employers must ensure compliance with all aspects of employment law to avoid disputes and potential penalties. Best practices include:

• Clear Policies: Establish clear policies and procedures for hiring, termination, and other employment matters.
• Regular Audits: Conduct regular audits of employment practices to ensure compliance with current laws and regulations.
• Employee Training: Provide training to HR personnel and managers on labor law compliance and best practices.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Vietnam employment laws and regulations, please visit the official governmental websites.

Updated on: August 2025