Vietnam’s Labour Laws: What You Need to Know

By: Keely Burkey

Are there any legal differences between hiring an expatriate and a Vietnamese worker?

An expatriate worker must have a work permit to work in Vietnam (although there are some exceptions). Also, if an expatriate works with a contract of longer than three months, they must have statutory health insurance. All local workers are subject to social, health and unemployment insurance.

Has the increase in foreign businesses and workers affected labour laws?

The government has made it harder for expatriates to obtain work permits and work visas. The process is generally longer than it used to be, too. Theoretically, expats are only supposed to be doing jobs that Vietnamese people wouldn’t be able to do.

What’s the biggest issue employers face when it comes to labour laws?

Most labour disputes are centered around wrongful termination. In other countries, like the United States, it’s easier to fire an employee for poor performance. In Vietnam, if an employer gets angry at an employee and fires them on the spot, that’s unlawful termination. There’s a specific set of procedures that needs to be followed. It’s always best if both parties agree to amicably part ways if possible. If you’re an employer and want to terminate a labour contract, it’s safest to discuss it first with a lawyer.

If an employee believes he or she has been wrongfully terminated, what can they do?

Generally, when a labour contract is breached by an employer, the employee may directly send his or her contract-related demand to the employer for remedy or request help from the trade union. The employee may also terminate the labour contract, make a complaint against the employer to the labour authorities or bring the dispute to a labour mediator or to the court. An employer who breaches a labour contract will be, depending on the seriousness of the situation, subject to paying compensation and reinstatement of the rights and benefits of the employee, and may face an administrative penalty.

What advice would you give to somebody starting a new company in Vietnam?

The most important thing is to have a good labour contract that clearly outlines the rights of both the employee and the employer. And how well do you really know someone when you hire them? If the business relationship doesn’t work out, the legal ramifications can be severe. It’s best to start with a probationary period and then a one-year fixed term contract before signing a permanent contract.

Just the Facts

Working Hours

– Usually 8 hours per day, 48 hours per week.

Overtime

– Should not exceed 50 percent of regular working hours per day.

– The worker is paid 150 percent of salary on normal working days,

200 percent on scheduled days off, and 300 percent on public holidays.

Minimum Wage

– Depends on the region. As of 1 January 2017, the minimum wage in HCMC is VND 3.75 million per month.

Vacation Time

– An employee in normal working conditions is entitled to at least 12 vacation days per year.

Sick Leave

– A local employee is entitled to sick leave allowance from the social insurance fund if the employee provides documentation from the healthcare provider proving just cause.

Maternity Laws

– The mother is entitled to six months of maternity leave.

– If she gives birth to more than one child at a time, she can take one additional month for each additional child.

– If a woman is in her third trimester of pregnancy, she is not permitted to work at night, work overtime or take business trips.

– A female employee can’t be subject to labour discipline while pregnant, during maternity leave or while nursing a child under 12 months old.

As with most laws and regulations, loopholes and exceptions abound. Be sure to consult a lawyer before making any legal decisions.

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