COUNTRY

Written Agreements

Employment contracts must be made in writing, except for contracts with a duration of under one month, in which case an oral employment contract may be used. They must include the following:

• Job description, location, and term
• Wages
• Working hours, breaks, and holidays
• Social and health insurance
• Training and skills improvement provided

A copy of the employment contract must be provided to the employee and the employer. The conditions for the probationary period may be included in the employment contract or made into a separate probationary contract.

Oral Agreements

The Labor Code only allows oral contracts to be used for fixed-term employment that has a duration of no more than 1 month.

Employers and employees have the obligation to provide truthful information to each other related to employment.

Implied Agreements

In Vietnam, there are no provisions regarding implied contracts. Both parties must conclude a written employment agreement for work that has a duration of over one month. Oral contracts are accepted for work of lesser duration.

According to the Civil Code, contracting parties are free to choose the form of contract they wish to enter into. Certain contracts or relationships can also be expressed through actions of the parties involved in the contract. This means the proof of existence of an employment contract can be provided by the actions of the parties.

The regular working hours cannot exceed 8 hours per day (up to 10 for those on a weekly schedule) and 48 hours per week. The working hours of employees under 15 cannot exceed 4 hours per day and 20 hours per week. The statutory hours for a workweek may not be above 48 hours, but the state encourages employers to implement a 40-hour workweek. The working hours of employees under 15 cannot exceed 4 per day and 20 per week.

There are six public, paid holidays. If the holiday falls on a weekend, employees can take the next weekday off; New Year Eve (January 1st), Tet – Vietnamese New Year (From last day of the last lunar month to 5th day of the first lunar month) (5 to 9 days), Hung Kings’ Commemoration or Death Anniversary of the Hung Kings (10th day of the 3rd lunar month) (2 days), Reunification Day (April 30), International Labor Day (May 1), Independence Day (September 2).

Employees are entitled to fully paid annual leave after 12 months of service with an employer:

• 12 working days for employees who work in normal working conditions
• 14 working days for minors and persons working in heavy or dangerous jobs
• 16 working days for workers doing extremely heavy or hazardous work

Annual leave increases by 1 day for every 5 years of employment with the same employer. Employees who have worked for less than 12 months are entitled to paid leave proportional to the number of months worked.

In the case of employment termination, job loss, or other reasons, an employee who has not used or not entirely taken their annual leave is entitled to receive compensation for the unused leave days. Employees who work voluntarily during their annual leave are entitled to additional payment to the amount of 200% of their regular income and those who are asked to work by their employers are entitled to 300% of their regular income.

Annual sick leave (with proof from a doctor) is as follows:

• 30 days - if contributions to the social insurance fund were made for less than 15 years
• 40 days - if contributions are between 15 and 30 years
• 60 days - contributions over 30 years
• 180 days for extended treatment
• For those working in heavy or hazardous occupations, the sick leave duration increases by 10 days for every category.

Sick leave is compensated by the Social Insurance Agency. Sickness allowance is equal to 75% of the employee's wages. There is also a provision of convalescence leave of 5-10 days, and the sickness benefit during this time is 30% of the basic salary. If the sickness continues even after 180 days of extended leave, the benefit is reduced to 65% of the wages for employees who have paid social security contributions for 30 years or more, 55% for employees who have paid for 15-30 years, and 50% for employees who have paid for less than 15 years.

Employees who have paid social insurance premiums for 6 months or more within 12 months before childbirth are entitled to 6 months of paid maternity leave. In the case of multiple births, the mother is entitled to one additional month off for each child from the second child onwards. Maternity leave cannot begin earlier than 2 months before the expected date of delivery.

Employees adopting a child younger than 6 months of age are entitled to take paid maternity leave until the child turns 6 months old. Employees are also entitled to paid leave when they experience miscarriage, abortion, or stillbirth.

An employee can return to work before the end of the maternity leave period with approval from her employer if she has taken at least 4 months' leave.

Male employees who have paid social insurance premiums for at least 6 months in the 12 months preceding childbirth or adoption are entitled to a fully paid paternity leave as follows:

• 5 days, under normal circumstances.
• 7 working days when the wife gives birth to a child requiring surgery or giving birth to a child under 32 weeks old
• 10 working days, in case the wife gives birth to twins, additional three working days for each infant from the third child onwards
• 14 working days when the wife has multiple births and requires surgery

Fathers are also entitled to 6 months of leave in case of adoption if the mother is not eligible for leave.

Minimum Wage

Under the Labor Code of Vietnam, an employee's salary may not be below the minimum wage. Statutory minimum wages are minimum wages of employees who do the most simple jobs in normal working conditions, sufficient to support them and their families and appropriate for socio-economic development. The laws stipulating region-based minimum wages applied to employees working under labor contracts require that a skilled worker be paid at least 7% more than the region-based minimum wage.

Current minimum wage rates are as follows (effective July 2024):

Overtime, Holiday & Vacation Pay

Overtime work is paid at the following rates:

• On regular working days - 150% of the normal wage
• On the weekly rest day - 200% of the normal wage
• On public holidays and paid leave days - 300% of the normal wage

Employees who perform overtime work at night receive an additional amount of 20% of the wage of a normal day, weekend, or public holiday accordingly.

The number of overtime hours must not exceed 50% of the regular working hours in a day and 40 hours in a month. The total overtime working hours may not exceed 200 in a year. In some instances, such as manufacturing, water supply, generation and supply of electricity, the overtime hour limit is 300 in a year. There is no limit on overtime for tasks related to national security and defense, tasks necessary to protect human life or property in natural disasters, fires, and epidemics.

Annual leave is paid at the rate of regular wages. The payment for annual leave can be requested in advance. Employees who work voluntarily during their annual leave are entitled to additional payment to the amount of 200% of their regular income and those who are asked to work by their employers are entitled to 300% of their regular income.

Notice Period

An employment contract may be terminated at any time by either party by giving written notice to the other party in advance, as follows:

• A minimum of 45 days for an indefinite-term employment contract
• A minimum of 30 days for a definite-term employment contract with a fixed term of 12-36 months
• A minimum of 3 working days for seasonal work employment contracts or for specific tasks with a duration of under 12 months

A party that fails to comply with the notice period provisions is required to pay compensation worth the employee's salary for the remaining notice period from the termination date to the other party. An employee who does not comply with the notice period requirements must pay half a month's salary to the employer.

Severance Benefits

Employees who have worked at the same company for over 12 months are entitled to a severance payment of half a month's salary for each year worked. In the case of redundancy, 1 month's wage is paid for each year of work.

Severance benefits are not paid if the employee terminates the contract unilaterally or is dismissed due to misconduct or during probation.

Pension

The Social Insurance Law provides retirement benefits to eligible employees. The general retirement age is 60 years for men and 55 years for women, with at least 20 years of insurance coverage. Beginning July 1, 2025, the normal retirement age will gradually rise 3 months a year for men and 4 months for women. Vulnerable groups may be exempt from the normal retirement age increases.

The monthly retirement pension of qualified employees is equivalent to 45% of the average monthly salary, corresponding to 15 years of contributions for females and 20 years for males, plus 2% for each additional year of paying social insurance contributions. The maximum pension rate is 75%. The benefit amount is reduced by 2% each year the pension is claimed before the insured's retirement age. Employees who have contributions exceeding the number of years corresponding to the 75% pension rate may also be entitled to a lump-sum allowance calculated as half a month's salary for each additional year of paid contributions.

Employees who have reached retirement age but have not made the required number of contributions may be entitled to a lump-sum retirement grant based on their average salary and the number of contributions made.

Dependents/Survivors Benefits

In Vietnam, survivors of a deceased insured employee are entitled to receive benefits:

• If the deceased employee had paid social insurance contributions for 15 years or more
• If the deceased person was on a retirement pension
• If the death was caused by a labor accident or an occupational disease

Eligible survivors include children under 18 years of age, surviving wives over 55 years, husbands over 60 years, and dependent parents. The monthly survivors pension for each relative is equal to 50% of the basic salary of the deceased employee, or 70% of the basic wage for relatives who have no guardians or parents.

In case of death caused by a labor accident or an occupational disease, the deceased employee's relatives are entitled to a lump-sum allowance equal to 36 times the basic salary.

Invalidity Benefits

Under the Social Insurance Law of Vietnam, employees are entitled to disability benefits if they have a disability that decreases their working capacity by 61% or more. The monthly pension is paid as 45% of the average monthly salary, corresponding to 15 years of contributions, plus 2% for men and 3% for women for each additional year of paying social insurance contributions. The pension is reduced by 2% for each year the pension is claimed before the insured's retirement age. The disability pension is replaced with an old-age pension after reaching retirement age.

The social insurance scheme also provides coverage in the case of labor accidents and occupational diseases. In case of temporary disability, employees are offered a daily allowance equal to their daily wages until full recovery. For permanent disability, an employee must have at least a 5% decrease in a working capacity to be eligible for benefits. Employees with a 5% to 30% decrease in working capacity receive a lump-sum benefit, while employees with a 31% or more reduction in working capacity receive a monthly pension.

There is a social assistance benefit for people who are severely disabled and do not qualify for a social insurance pension. An allowance of VND 500,000 (Vietnamese dongs) is paid per month to people with severe disabilities, VND 750,00 is paid to people with particularly severe disabilities, VND 1,250,000 per month is paid to people with extremely severe disabilities or the elderly with a severe disability.