1. Overview of the Employment Law Framework
Vietnam's employment legal framework is built around the Labor Code (amended 2019), which came into effect in January 2021. It governs the rights, responsibilities, and obligations of both employers and employees in all employment relationships. The Ministry of Labour, Invalids and Social Affairs (MOLISA) enforces compliance and handles labor disputes.
2. Primary Employment Statutes and Regulatory Bodies
Key statutes include:
- Labor Code 2019
- Law on Social Insurance
- Law on Occupational Safety and Hygiene
- Law on Vietnamese Guest Workers
- Decree 145/2020/ND-CP
These laws are enforced by MOLISA and its regional Departments of Labour (DOLISA).
3. Employment Contracts: Legal Requirements
Employment contracts must be in writing, except for contracts under 1 month. Contracts must clearly state:
- Job title and duties
- Salary and benefits
- Working time and rest periods
- Duration (definite or indefinite)
- Conditions for termination
Any amendments require written consent from both parties.
4. Working Hours and Overtime: Statutory Standards
Standard working hours are capped at 8 hours/day or 48 hours/week. Overtime is limited to:
- 40 hours/month
- 200 hours/year (or 300 for specific sectors)
Overtime compensation ranges from 150% to 300% depending on the timing. Employers must provide adequate rest and cannot compel overtime without consent.
5. Wages and Payroll Compliance
The national minimum wage is adjusted annually and varies by region. Employers must:
- Pay salaries on time (monthly or semi-monthly)
- Provide payslips and retain payroll records for at least 5 years
- Register employees with social insurance, health insurance, and unemployment insurance
Non-compliance can result in administrative fines or suspension of business licenses.
6. Foreign Worker Regulations and Employer Duties
Foreign employees must obtain a work permit before beginning employment. Employers must:
- Justify the need for hiring foreigners
- Secure a Work Permit or Work Permit Exemption Certificate
- Ensure salaries align with market norms
- Report hiring and termination to DOLISA
Work permits are valid for 2 years and renewable once. Non-compliance may lead to deportation or employer penalties.
7. Labor Inspections and Enforcement Risks
Labor authorities conduct inspections to monitor compliance with labor, wage, and safety laws. Violations can result in:
- Monetary penalties
- Business license revocation
- Public blacklisting of non-compliant companies
Employers must proactively maintain proper documentation and internal HR compliance practices.
8. How AYP Helps You Stay Compliant
AYP helps you hire and manage employees in Vietnam by:
- Drafting compliant Vietnamese labor contracts
- Managing social insurance and salary submissions
- Facilitating legal foreign worker onboarding
- Ensuring labor law adherence to avoid fines or disputes
9. Contact Us
Planning to hire in Vietnam? Let AYP manage employment compliance and mitigate your regulatory risks.
👉 Contact us today.
