Leave Policy in Vietnam

Key Takeaways Summary

Essential Vietnam Leave Policy Requirements:

• Annual Leave: 12 days minimum for standard working conditions, increasing by 1 day per 5 years of service
• Sick Leave: 30 days per year covered by social insurance, with unlimited unpaid leave for serious conditions
• Maternity Leave: 6 months (180 days) fully paid through social insurance
• Paternity Leave: 5 working days paid by employer for fathers
• Public Holidays: 10-11 official holidays per year with mandatory pay or compensation
• Critical Compliance: All leave payments above basic employer obligations are funded through Vietnam's comprehensive social insurance system

Introduction

Vietnam continues to cement its position as one of Southeast Asia's most attractive destinations for international business expansion and remote workforce management. With its strategic location, growing economy, and increasingly skilled workforce, Vietnam offers compelling opportunities for companies seeking to tap into Asian markets. However, navigating Vietnam's comprehensive labor regulations, particularly around employee leave entitlements, requires careful attention to ensure full compliance with local employment laws.

Understanding Vietnam's leave policies is critical for any employer operating in the country, whether through direct employment, contractor arrangements, or remote work setups. The Ministry of Labour, Invalids and Social Affairs (MOLISA) oversees these regulations, which have evolved significantly in recent years to better protect workers while maintaining Vietnam's competitive business environment. This comprehensive guide provides practical insights into Vietnam's leave policy framework, recent regulatory updates, and essential compliance requirements that every employer needs to know.

From annual leave calculations to complex parental leave provisions, Vietnam's employment laws contain nuances that can significantly impact your operations if not properly managed. This guide offers detailed analysis of all leave types, government-backed information, and practical implementation strategies to help you build a compliant and effective workforce management approach in Vietnam.

Legal Framework Overview

Vietnam's leave policies are primarily governed by the Labour Code 2019 (Law No. 45/2019/QH14), which came into effect on January 1, 2021, replacing the previous 2012 Labour Code. This comprehensive legislation establishes the foundation for all employment relationships in Vietnam, including detailed provisions for various types of leave entitlements and employer obligations.

The Ministry of Labour, Invalids and Social Affairs (MOLISA) serves as the primary regulatory authority responsible for interpreting and enforcing these labor laws. MOLISA regularly issues circulars and decrees that provide additional guidance on implementation, ensuring that labor regulations keep pace with Vietnam's evolving economic landscape.

Vietnam's employment landscape in 2024 presents a complex yet dynamic environment for both local and foreign employers. The country's labour laws and regulations are designed to protect employees while also fostering economic growth and foreign investment. Recent updates have focused on strengthening social protection while maintaining competitive conditions for businesses.

The legal framework also incorporates Vietnam's social insurance system, which plays a crucial role in funding most statutory leave benefits. This system requires both employer and employee contributions, with rates and coverage updated regularly through government decrees. Understanding this integration between labor law and social insurance is essential for proper compliance and cost planning.

Key Government Resources:

• Ministry of Labour, Invalids and Social Affairs (MOLISA)
• Vietnam Labour Code 2019
• Social Insurance Law and Regulations

Mandatory Leave Types

Annual Leave Entitlements

Vietnam's Labor Code provides employees who have worked with an employer for over 12 months to be entitled to fully paid annual leave as follows: Employees working in normal conditions will be entitled to 12 days of leave. Annual leave increases by 1 day for every 5 years of employment with the same employer.

Annual leave must be scheduled by mutual agreement between employer and employee, with employers required to ensure all employees take their entitled leave within the calendar year. Unused annual leave can only be carried forward up to three days to the following year, and must be used within the first quarter.

Parental Leave Provisions

Vietnam provides comprehensive parental leave benefits, with most costs covered through the social insurance system rather than direct employer payments.

Maternity Leave: Six months of fully paid leave are given to female employees, extendable for multiple births. The social insurance system provides this compensation, requiring both employer and employee to have made contributions for at least 6 months before the leave begins.

Public Holiday Schedule

Vietnam observes multiple categories of public holidays, with specific rules governing compensation and substitution days.

Sick Leave and Medical Leave

Vietnam's sick leave system operates primarily through social insurance coverage, with specific documentation requirements and payment structures.

Under Vietnamese labor law, employers are not obligated to pay salary to employees who are ill or on maternity leave. Wages during approved medical or maternity leave are covered by the social insurance fund.

Additional Leave Categories

Beyond the mandatory leave types, Vietnam's labour laws recognize several additional categories that employers must accommodate based on specific circumstances and employee needs.

Specialized Leave for Vulnerable Groups

Vietnam provides enhanced leave provisions for certain employee categories, reflecting the country's commitment to social protection and workplace equality.

Enhanced Provisions:

• Underage Workers (15-18 years): Additional 4 days annual leave, restricted night work, enhanced health protections
• Disabled Employees: Minimum 16 days annual leave, reasonable accommodations for medical appointments
• Pregnant Workers: Reduced working hours in final trimester, enhanced break periods, hazardous work restrictions
• Single Parents: Priority in leave scheduling, flexible arrangements for child-related emergencies

Industry-Specific Variations

Certain industries in Vietnam have modified leave requirements due to unique working conditions, safety requirements, or regulatory oversight from specialized government agencies.

Hazardous Work Conditions

Employees who are underage, disabled, work under arduous, toxic, and hazardous conditions receive enhanced leave entitlements beyond the standard 12-day minimum. These provisions recognize the additional physical and mental stress associated with dangerous working environments.

Hazardous Work Leave Enhancements:

• Underground mining: 18 days annual leave minimum
• Chemical processing: 16 days annual leave minimum
• High-altitude work: 14 days annual leave minimum
• Radiation exposure: Special health monitoring leave
• Extreme temperature environments: Additional recovery time

Compliance Requirements

Ensuring full compliance with Vietnam's leave policies requires systematic approach to documentation, employee communication, and regulatory reporting.

Documentation Standards

Vietnamese labor authorities require specific documentation standards for leave management, with penalties for inadequate record-keeping ranging from warnings to significant fines.

Essential Documentation Requirements:

• Employee leave policies translated into Vietnamese
• Individual leave entitlement calculations with supporting formulas
• Medical certificates from authorized healthcare providers
• Social insurance contribution records and payment confirmations
• Written agreements for leave scheduling and carry-over provisions
• Payroll documentation showing correct holiday and leave compensation

Government Resources for Compliance:

• MOLISA Compliance Guidelines
• Labour Inspection Procedures

Best Practices for Employers

Implementing effective leave management in Vietnam requires understanding both legal requirements and practical considerations for maintaining productive workforce relationships.

Key Takeaways: Implementation Essentials

• Social Insurance Priority: Ensure timely and accurate social insurance contributions to avoid employee benefit disruptions and compliance issues
• Documentation Excellence: Maintain comprehensive records in Vietnamese language with proper government-approved formats and regular updates
• Proactive Communication: Establish clear leave request procedures with adequate advance notice requirements and mutual scheduling agreements

Strategic Leave Management

Successful employers in Vietnam often exceed minimum requirements to attract and retain talent while maintaining operational efficiency. This includes flexible leave arrangements, enhanced parental leave benefits, and wellness programs that complement statutory entitlements.

Advanced Implementation Strategies:

• Digital leave tracking systems integrated with Vietnamese payroll requirements
• Cross-training programs to manage leave coverage without operational disruption
• Regular policy updates reflecting changes in Vietnamese labor law and social insurance rates
• Employee education programs explaining leave rights and social insurance benefits

Recent Changes and Future Outlook

Vietnam's labor regulations continue evolving to balance worker protection with economic competitiveness, with significant updates implemented throughout 2024 and additional changes planned for 2025.

Anticipated 2025 Developments

It is projected that the minimum wage in Vietnam to be applied from July 1, 2024, will be: Region 1 minimum wage is 4,960,000 VND/month; Region 2 minimum wage is 4,410,000 VND/month; Region 3 minimum wage is 3,860,000 VND/month; and Region 4 minimum wage is 3,450,000 VND/month. These wage increases may influence leave pay calculations and social insurance contribution rates.

Expected Policy Developments:

• Enhanced remote work leave provisions following post-pandemic work arrangements
• Expanded mental health leave recognition and support requirements
• Strengthened enforcement of existing leave policies through increased labor inspections
• Potential increases in annual leave minimums for long-term employees
• Greater integration between leave policies and Vietnam's digital government initiatives

Quick Reference Guide

Critical Compliance Reminders

Understanding Vietnam's leave policies requires recognition that most benefits flow through the social insurance system rather than direct employer payments. This structure reduces direct employer costs but increases the importance of proper social insurance compliance and contribution management.

Implementation Priorities:

• Establish robust social insurance registration and payment processes
• Create bilingual leave policies meeting Vietnamese documentation standards
• Implement systems for tracking leave balances and regulatory reporting requirements
• Develop relationships with authorized medical providers for proper certification
• Plan for regular policy updates as Vietnamese labor law continues evolving

Managing Your Vietnam Team

Our employer of record services help you access Vietnam's young, dynamic workforce without the complexity of local HR and compliance management. We handle the intricate details of Vietnamese labor law compliance, allowing you to focus on growing your business and managing your team's performance.

Our Vietnam services include:

• Payroll Outsourcing Management: Accurate calculation of Social Insurance, Health Insurance, and Unemployment Insurance contributions with automated compliance updates
• Local Compliance Assurance: Stay current with Labor Code amendments and MOLISA regulatory changes
• Risk Mitigation: Reduce exposure to labor law violations and associated penalties
• Talent Acquisition Support: Access to Vietnam's skilled professionals across manufacturing, technology, and textile sectors
• Multi-currency Solutions: Seamless salary payments in Vietnamese Dong or your preferred currency

We offer employer of record services across multiple countries in the APAC region, with deep expertise in Vietnam's unique regulatory environment and cultural considerations.

Let us help you build and manage your Vietnam team. If you want to access Vietnam's top talent without the complexity of local HR and payroll outsourcing management, contact us for a consultation today. Our Vietnam employment specialists can assess your specific needs and design a solution that ensures compliance while supporting your business growth objectives.