Labor law in Vietnam

Vietnam Labor Code Overview (2026 Update)

Key Employment Regulations, Hiring Rules, and Compliance Guide for Businesses

Vietnam’s increasingly open investment environment and integration with global business standards have led to continuous improvements in labor regulations. The current Vietnam Labor Code (effective January 2021) aligns more closely with international labor practices while providing clearer protections for employees and employers.

Businesses operating in Vietnam must comply with the Labor Code, which establishes the legal framework governing:

• Employment contracts
• Working hours and overtime
• Wages, bonuses, and benefits
• Social insurance obligations
• Employee termination and severance
• Workplace rights and protections.

This guide outlines essential labor compliance requirements for companies hiring employees in Vietnam.

Employment Contracts in Vietnam

Vietnamese labor law requires a written labor contract covering key employment conditions, including:

• Job scope and responsibilities
• Working hours and rest periods
• Salary, bonuses, and allowances
• Workplace location
• Contract duration
• Occupational safety and hygiene conditions
• Social insurance participation.

Types of Labor Contracts

Vietnam recognizes two main types of contracts:

Indefinite-Term Contract

• No fixed expiration date
• Common for long-term employees.

Definite-Term Contract

• Maximum duration of 36 months
• Can only be renewed once before converting to an indefinite contract.

Additional points:

• Electronic labor contracts are legally valid
• Verbal contracts are permitted only for jobs under one month
• Seasonal contracts are no longer allowed
• Part-time and full-time employees have equal legal rights.

Companies employing 10 or more workers must register internal labor regulations with the provincial labor authority. These typically cover:

• Working hours and rest schedules
• Workplace discipline
• Safety policies
• Confidentiality rules
• Disciplinary procedures.

Working Hours and Overtime Regulations

Standard working hours in Vietnam:

• Maximum 8 hours per day
• Maximum 48 hours per week.

Overtime requires employee consent and must comply with limits:

• Up to 12 hours total per day (including overtime)
• Maximum 40 hours per month
• Typically 200 hours per year.

Certain industries — such as textiles, footwear, electronics, and export manufacturing — may allow up to 300 overtime hours annually under special conditions.

Restrictions apply for:

• Employees under 18
• Pregnant or nursing female employees
• Workers with disabilities
• Employees in hazardous working environments.

Night work (22:00–06:00), weekends, and public holidays trigger higher overtime pay rates.

Salary Structure and Minimum Wage in Vietnam

Vietnam has two minimum wage frameworks:

1. Common Minimum Wage

Currently about VND 2,340,000/month (~US$93), mainly used for:

• State-sector salary calculations
• Social insurance contribution ceilings.

2. Regional Minimum Wage

Applied to private enterprises based on geographic zones defined by the government. Employers must comply with the applicable regional minimum wage.

Companies are responsible for developing:

• Salary scales
• Payroll policies
• Productivity-based compensation frameworks.

Bonuses, Allowances, and Employee Benefits

Vietnamese employers commonly provide bonuses and benefits to improve employee retention and productivity.

Examples include:

• Performance bonuses
• Annual bonuses (including Tet bonus)
• Housing or transportation allowances
• Training support.

Certain benefits may be non-taxable under Vietnamese tax regulations, such as:

• Employer-paid housing utilities (within limits)
• Uniform and telephone allowances
• Meal allowances within regulated thresholds
• Employer-sponsored training
• Return flight tickets for foreign employees
• Tuition support for children of expatriate staff.

However, most salaries and bonuses remain subject to Personal Income Tax (PIT).

Termination, Severance, and Employee Rights

Employees may terminate contracts unilaterally with appropriate notice, even without providing a specific reason.

Immediate termination is allowed if:

• Salaries are unpaid or delayed
• Workplace abuse occurs
• Health or pregnancy concerns arise.

Employers may terminate contracts only under legally defined circumstances and must comply with notice requirements.

Typical termination obligations include:

• Payment for unused annual leave
• Severance allowance (if applicable)
• Final salary and contractual benefits.

Retirement Age in Vietnam (2021–2035 Adjustment)

Vietnam is gradually increasing retirement age:

By 2026:

• Male employees: about 61 years 6 months
• Female employees: about 57 years.

Target retirement age:

• Men: 62 years by 2028
• Women: 60 years by 2035.

Adjustments may apply depending on:

• Hazardous working conditions
• Job specialization
• Health considerations.

Early retirement or delayed retirement (up to five years) may be permitted.

Hiring Foreign Employees in Vietnam

Foreign companies operating in Vietnam may recruit foreign experts, managers, or executives when qualified local workers are unavailable.

Requirements include:

• Work permit approval
• Compliance with labor regulations
• Proof of recruitment efforts for local candidates.

Typically, employers must advertise locally at least 30 days before hiring foreign staff unless exempt.

Representative offices in Vietnam may also directly hire employees.

Trade Unions and Employee Representation

Vietnam now allows independent employee representative organizations alongside traditional trade unions, in line with international trade agreements.

Companies should ensure:

• Compliance with union rights
• Proper employee consultation processes
• Workplace grievance procedures.

Anti-Discrimination and Workplace Protection

Vietnam’s Labor Code prohibits discrimination based on:

• Gender, nationality, ethnicity, or race
• Marital or pregnancy status
• Disability or health status
• Political views or union participation.

The law also includes explicit provisions addressing sexual harassment, covering:

• Physical, verbal, and non-verbal conduct
• Digital communications
• Workplace-related events and travel.

Employers should implement clear internal policies to prevent violations.

Reporting and Labor Administration Requirements

Companies must:

• Maintain a labor management register
• Update employee data regularly
• Submit workforce reports (typically every six months)
• Comply with inspections when required.

These requirements apply to both domestic and foreign-invested enterprises.

Special Protections for Female Employees

Vietnamese labor law provides additional support for female workers:

• 60-minute daily breastfeeding break for mothers with infants under 12 months
• 30-minute menstrual break for at least three working days monthly
• Additional compensation if breaks are not taken
• Strong maternity protections.

Final Thoughts: Labor Compliance in Vietnam

Vietnam’s labor regulations balance investor flexibility with employee protection. For foreign companies, understanding employment law is essential to ensure:

• Legal compliance
• Stable workforce management
• Positive employee relations
• Smooth business operations.

Professional HR, payroll, or legal advisory support can help companies navigate evolving labor regulations and administrative requirements effectively.