The law requires a written labor contract in Vietnam, which clearly outlines the terms of salary, benefits, and termination requirements of the employee. In addition, the contract should include mandatory information such as: social insurance, health insurance; Work location; contract term; training, fostering and improving professional qualifications,

The maximum working hours are 8 hours per day, or 48 hours per week, for normal working conditions. It’s legally required that employers provide employees with 1 full day off per week, which is usually Sunday. In practice, though, most employers stick to the standard eight-hour workday, five days per week schedule (from Monday to Friday).

There are 11 public holidays in Vietnam during which most employees are entitled to the day off work. The Tet Lunar New Year is a week long celebration.

Public holidays are in addition to the vacation days. Public holidays are:

• New Year’s Day – January 1 – 01 day off
• Tết (The Lunar New Year) – from last day of the last lunar month to 5th day of the first lunar month – 05 days off
• Hung Kings Commemorations – 10th day of the 3rd lunar month – 01 day off
• Day of Southern Liberation for National Reunification – April 30 – 01 day off
• International Labour Day – May 1 – 01 day off
• National Day – September 2  and added either September 1st or 3rd from 01 Jan 2021 – 02 days off

If the weekly rest day coincides with a public holiday or Tet holiday specified in Clause 1, Article 112 of the Labor Code, the employee is entitled to a compensatory rest day off on the next working day.

Foreign employees are additionally entitled to a day off with pay on one additional traditional day of their country of origin.

Minimal annual leave requirements of 12 days are stipulated by Vietnamese labor law.

• Employees who have worked for twelve months for an employer are entitled to twelve paid annual leave days, with pro rata entitlement for employees with less than twelve month’s service.
• Employees receive one additional paid vacation day for each additional five years they work for an employer.
• Employees are entitled to pay in lieu of annual leave for leave not taken by the end of the year. In practice normally the Employer agrees to permit the
• Employee to carry over untaken annual leave to the following year, but no later than March 31st of the following year, instead of payment in lieu of untaken leave.
• Employees working under hazardous conditions may earn more leave, and additional leave is often a negotiated supplementary benefit.
• Annual vacation leave is held separately from sick leave or maternity leave in Vietnam.
• Employees are also entitled to paid personal leave for their wedding, the wedding of their child, or the death of a parent, spouse, or child, as well as unpaid leave with the approval of their employer.

Employees who suffer from illness and/or disability or take leave in accordance with a doctor’s order can receive an allowance from Vietnam’s social insurance fund, provided that they submit the required documentation supporting their leave (normally only doctors at the public hospitals can issue this certificate). The sick leave allowance is based on the employee’s salary used to calculate the social insurance premium. The maximum entitlement is:

• 30 days per year (if the employee has contributed to the social insurance fund for less than 15 years) or
• 40 days per year (if the employee has contributed to the social insurance fund for between 15 and 30 years) or
• 60 days per year (if the employee has contributed to the social insurance fund for more than 30 years).

As a female employee, you are eligible for 6 months of paid maternity leave at 100% of your salary (the base salary of the social insurance contribution), and an additional 30 days for each additional child. Your salary during this period will be paid by the compulsory social insurance. 

Maternity leave is 6 months. As a pregnant female employee, or one who is on maternity leave or has a child below 12 months of age, you can only be dismissed if the enterprise ceases operation; no other causes for dismissal are recognized.

Maternity leave in Vietnam is 12 weeks long, and during this time, the employer is not required to pay salary to the employee. However, the maternity leave allowance is based on the employee’s salary used to calculate the social insurance premium. The maximum entitlement is: 29.800.000VND. In case the employee’s actual gross salary base is higher than this amount, the employer will pay for the difference.

Fathers are eligible to receive 5 to 14 days of paid paternity leave, depending on whether the child is born naturally or by C-section and whether it is a single or multiple birth.

Basic insurance is provided through the national system.

Employers provide health insurance by law for their employees and must provide regular annual health checks.

In Vietnam, employers are not legally required to provide a 13th month bonus, annual bonus or commission plan. However, most companies do offer some form of bonus to their employees.

The 13th month bonus is typically given to employees who have worked for the company for more than one year, or is prorated based on length of employment. Bonuses are often paid out before the Lunar New Year Holiday, and may range from one month to three months salary.

Various other allowances and bonuses are often negotiated for in Vietnam, and they may or may not be taxable depending on their structure. At Globalization Partners, we advise customers on the total compensation package every step of the way when they use our Global Employer of Record solution.

A 13th month bonus is not legally required in Vietnam, but most employers provide a 13th month bonus, annual bonus or commission plan. The 13th month bonus is typically offered to employees that have worked for a company for more than one year or is prorated based on length of employment. Bonuses are often paid prior to the Lunar New Year Holiday and may range from 1 month to 3 months’ salary.

The employees’ rights when their employment contract is terminated depend on the reason for dismissal and the conditions set out in the employment contract. The effects of this include the notice period and any severance payments that may be applicable.

In Vietnam, it is common practice to have a “probation period” when hiring new employees. This probationary period must not exceed 60 days for work that requires specialized or highly technical skills or 30 days for other types of work.

Vietnam labor code states that an employer may terminate a labor contract by serving advance notice of 30 working days for termination of a fixed term labor contract or 45 working days for an indefinite labor contract. However, employers must have proper legal grounds for termination.

Terminating an employee in Vietnam is not a simple matter. Proper legal grounds must exist in order for an employer to terminate a labor contract with an employee, such as performance issues, prolonged illness, a force majeure event, or dissolution of the company. Employers are required to perform various procedures prior to terminating an employee.

An employer who wrongfully ends an employee’s tenure may be liable for that employee’s salary during the period of unemployment, as well as a penalty of two months’ salary. The best way to avoid this legal issue is to come to a mutual agreement or resignation with the employee, in which case they may be given a severance package.

Statutory Social Insurance in Vietnam applies to enterprises, entities, and organizations that employ employees under indefinite-term or definite-term labor contracts for three months or more. The social insurance fund pays allowances for:

• sick leave
• maternity leave
• work-related accidents
• occupational disease
• pensions.

Vietnam has a compulsory social, health and unemployment insurance scheme. Contributions are to be borne by both the employer and the employee. Calculating the contributions is the monthly salary stipulated in the labor contract (capped at 20 times the Common Minimum Wage for SI / HI) and 20 times Minimum Regional Wage for UI. Compulsory unemployment insurance only applies to enterprises with 10 or more employees.

• Employers contribute 17.5% of payroll to social insurance;
• Employees contribute 8%.
• Union Fee: 1%
• Trade Union: 2% (compulsory to the employer).

This information is provided as general accepted information and is not intended as advisory services.