With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance by September 2025 in Vietnam.

01 Overview of the Labor Law System

1.Legal System

Vietnam operates under a civil law system. The legal framework is primarily based on written laws and codes enacted by the National Assembly, with the Labor Code 2019 being the principal legislation governing labor and employment matters.

2.Resources and Agencies

The Ministry of Internal Affairs (MIA) is the central regulatory authority responsible for drafting national labor policies, issuing guidance, and supervising compliance across the country. It also oversees labor inspections and the enforcement of occupational safety standards.

02 Employment Qualifications and Classification

1.Employment Age

Employees aged 18 or above may independently enter into labor contracts without restriction as to the type of work. Employees under 18 are considered minors and may only be employed subject to protective regulations.

Under normal working conditions, the retirement age in 2025 is 61 years and 3 months for male employees and 56 years and 8 months for female employees, which shall gradually increase until reaching 62 years for males in 2028 and 60 years for females in 2035.

2.Qualifications for Foreign Employers

Vietnamese law does not expressly stipulate whether a foreign enterprise may hire employees in Vietnam without establishing a permanent establishment such as a representative office, branch, wholly foreign-owned enterprise (WFOE), or other subsidiary/affiliate.

3.Classification of Employment

Under Vietnamese law, the lawful forms of employment are limited to: (i) direct employment under a labor contract, and (ii) labor outsourcing through a contract with a licensed labor outsourcing provider.

Other intermediary arrangements, such as Employer of Record (EOR) structures or service contracts used in lieu of labor contracts, are not recognized under Vietnamese law.

4.Foreign Workers

Vietnamese law does not impose a fixed quota or ratio between domestic and foreign employees across all industries. However, the general principle under the law is that foreign workers are permitted to work in Vietnam only in positions requiring high professional or technical expertise that Vietnamese workers cannot yet meet.

03 Recruitment and Employment Contracts

1.Background Examination

Pursuant to the Law on Protection of Personal Data 2023, any background check involving the collection, processing, or disclosure of personal data requires the employee’s prior and informed consent. In practice, rather than conducting verification directly, employers often request employees to submit supporting documents such as educational certificates, health certificates, or judicial record certificates. Verification of prior employment is not prohibited but generally depends on the applicant’s cooperation.

2.Contract Types

The Labor Code 2019 recognizes only two types of labor contracts: definite-term and indefinite-term. A definite-term contract is one in which the parties specify the duration and termination date, for a period not exceeding 36 months from the effective date. An indefinite-term contract is one without a defined duration or termination date. While the type of contract is subject to agreement between the parties, the law permits employers to conclude a maximum of two consecutive definite-term contracts; from the third contract onward, an indefinite-term contract must be used.

3.Probationary Period

Under the Labor Code 2019, the maximum probationary periods are as follows:

• Up to 180 days for enterprise managers;

• Up to 60 days for positions requiring professional or technical qualifications at college level or higher;

• Up to 30 days for positions requiring intermediate qualifications, skilled workers, or professional staff; 

• Up to 6 working days for all other jobs.

04 Working Standards

1.Remuneration

Remuneration payable by an employer to an employee under the labor contract may consist of the following components:

• Job- or position-based salary;

• Salary allowances;

• Other additional payments as agreed by the parties.

2.Statutory Benefits and Social Security

Pursuant to Vietnamese labor and social insurance laws, employees are required to participate in: (i) compulsory social insurance, (ii) health insurance, and (iii) unemployment insurance (not applicable to foreign employees).

3.Working Hours

Vietnamese law applies a standard working hours system, under which the employer must specify the standard working hours applicable to employees in the internal labor regulations, labor contracts, or collective labor agreements. In practice, State authorities may permit manufacturing enterprises to arrange working hours on a shift basis, applicable to employees working in factories or on production lines. Accordingly, the employer may determine the specific time frames for shifts and must notify employees of their assigned shifts within a reasonable period in advance.

4.Rest and Leave

Employees are entitled to at least 24 consecutive hours off each week. The weekly rest day need not be Sunday; the employer may designate another day, provided it is specified in the internal labor regulations. Where weekly rest cannot be arranged, employees must be given an average of at least four days off per month.

Employees working on a shift basis must be given at least 12 hours of rest before commencing the next shift.

05 Occupational Health and Special Protection

1.Occupational Health and Security

Employers are obliged to comply with minimum occupational safety and hygiene standards to protect employees’ health and lives. This includes ensuring statutory working conditions, providing protective equipment, conducting safety training and supervision, maintaining an occupational safety unit, and reporting and handling occupational accidents and occupational diseases in accordance with the Law on Occupational Safety and Hygiene 2015.

2.Special Protection

Vietnamese labor law establishes a number of protective measures and preferential policies for vulnerable categories of employees, with the dual objectives of safeguarding human rights and promoting equality in employment relations. The primary groups receiving special protection are female employees, juvenile employees, elderly employees, and employees with disabilities.

06 Personal Information and Privacy

1.General Rules

Vietnam does not have a single employment-specific privacy statute. Under the PDPD, employers are considered “data controllers” when processing employee or applicant data.

2.Transnational Transfer

When transferring employee personal data abroad, employers must first obtain the employee’s informed consent and prepare a cross-border data transfer impact assessment.

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Under the Labor Code 2019, discrimination in employment and sexual harassment in the workplace are expressly categorized as prohibited acts. Employers are under a statutory duty to:

• Incorporate anti-discrimination and anti-harassment provisions in their Internal Labor Regulations (ILRs);

• Establish complaint-handling procedures and designate personnel or committees responsible for addressing complaints;

• Investigate complaints promptly and take appropriate disciplinary or remedial action.

2.Protective Characteristics

The characteristics protected under Vietnam’s anti-discrimination rules include gender, race, color, ethnicity, religion, belief, disability, family status, and social origin. Although gender identity and sexual orientation are not expressly enumerated under current legislation, certain policies and human resource management practices have indirectly established a basis for protecting equality for these groups.

08 Internal Policies        

1.Applicability

The management of employees through internal labor regulations (ILRs) and internal policies is a common practice in Vietnam and is expressly regulated under labor law. Pursuant to Article 118 of the Labor Code 2019, employers with ten or more employees are required to issue ILRs in writing and register them with the competent labor authority.

2.Validity

Employers with ten or more employees are required to register their Internal Labor Regulations (ILRs) with the provincial-level labor authority under the People’s Committee where the employer is registered for business, as a condition for such ILRs to take legal effect. Prior to registration, the employer must consult with the grassroots trade union or, in its absence, the employees’ representative organization, through workplace dialogue procedures in accordance with the Regulation on Grassroots Democracy.

3.Whistleblowing

There is not yet a comprehensive law in Vietnam specifically governing whistleblowing. In practice, subsidiaries of multinational groups operating in Vietnam often adopt whistleblowing policies or anonymous hotlines to enable employees to report misconduct—such as corruption, harassment, or discrimination.

09 Transactions

1.Employment Relationship

In a merger or consolidation, the surviving or consolidated company automatically assumes all rights and obligations under the employment contracts of the merged or consolidated entities, which cease to exist upon completion of the transaction. As a principle, the terms and conditions of employment contracts must be preserved.

2.Compensation

Employees are entitled to statutory compensation only if their labor contracts are terminated on the grounds of redundancy arising from a corporate transaction.

Where the labor contract continues to be performed under its existing terms, labor law does not provide employees with any automatic entitlement to compensation. In practice, however, situations may arise where the new employer seeks to amend contractual terms; in such cases, any modification must be based on mutual agreement between the employer and the employee.

10 Termination of Employment

1.Termination Grounds

With Vietnam’s pro-employee orientation, courts and competent state authorities consistently maintain the principle that a labor contract may only be terminated in the specific cases stipulated by the Labor Code. Any termination by the employer outside these statutory grounds is deemed unlawful.

2.Termination Procedure

The procedures for terminating labor contracts vary across the categories of termination by employer.

Under the Labor Code, prior to unilaterally terminating a labor contract, the employer must provide advance notice to the employee.

Dismissal must be carried out strictly in accordance with the labor disciplinary procedure prescribed by law. The main steps include:

a) Evidence Collection

b) Disciplinary Hearing

c) Issuance of Disciplinary Decision

3.Termination Protection

Under the Labor Code, employers are prohibited from unilaterally terminating labor contracts with employees during the following periods:

• The employee is on sick leave, convalescence;

• The employee is on annual leave, personal leave or other leave with the employer’s consent;

• While a female employee is pregnant, or employee (male or female) is on maternity leave, or raising a child under 12 months of age.

4.Severance and Compensation

When an employment contract is terminated, depending on the grounds for termination, the employee may be entitled to either severance allowance or job-loss allowance, in addition to other payments agreed in the labor contract.

5.Wrongful Termination

Where an employer unlawfully terminates a labor contract, the following statutory liabilities may arise:

a) Reinstatement of Employment

b) Payment of Wages and Social Insurance Contributions for the Period of Non-Work

c) Compensation

d) Compensation in Lieu of Reinstatement

e) Administrative Penalties

6.Mass termination and Layoffs

Under the Labor Code 2019, an employer may retrench or lay off employees in cases where jobs become redundant and no alternative employment can be arranged due to organizational restructuring, technological changes, or economic reasons.

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

Under the Labor Code 2019, where an employee works in a position directly related to trade secrets or technological secrets as defined by law, the employer is entitled to enter into a written agreement with the employee regarding the scope and duration of confidentiality obligations, the employee’s rights and benefits, and liability for damages in case of breach.

2.Non-Compete and Non-Solicitation

Vietnamese law does not expressly regulate non-compete and non-solicitation agreements. Consequently, their enforceability is inconsistent across competent authorities and adjudicating bodies.

12 Work Representation and Trade Unions

1.Work Representation

Under Vietnamese law, the establishment of Employee’s representation is not mandatory and is subject to the employees’ own initiative. Vietnam adopts a single, centralized trade union system headed by the Vietnam General Confederation of Labor (VGCL). Grassroots trade unions established within enterprises are organized under the VGCL and its hierarchical structure.

2.Trade Unions

The Vietnam General Confederation of Labor (VGCL) remains the only legally recognized employee representative body in Vietnam, with a nationwide structure covering most industries and provinces.

Available information suggests that most CLAs in Vietnam are concluded at the enterprise level or among a group of enterprises, rather than at the sectoral or industry-wide level.

13 Dispute Resolution

1.Procedures & Enforcement

Under the Labor Code, labor disputes are classified into individual labor disputes and collective labor disputes. The competent authorities and individuals empowered to resolve labor disputes include labor conciliators, labor arbitration councils, and the People’s Courts.

2.Waiver & Enforcement

In general, Vietnamese labor law does not provide clear regulations on the legal validity of employees’ commitments/agreements to waive statutory and contractual rights. As a principle, employees have the autonomy to dispose of their own rights and are bound by agreements entered into with the employer, provided that such agreements are not contrary to law.

14 Others 

1.Latest Development & Trends

In recent times, Vietnamese enterprises have increasingly engaged in restructuring and streamlining their workforce to adapt to global economic fluctuations and the emergence of artificial intelligence, thereby reducing operational costs and improving efficiency. These projects have resulted in large-scale termination of employment contracts, particularly in the banking and manufacturing sectors.

2.Cultural and Religious Considerations

With its competitive labor costs and deepening integration policies, Vietnam has been gradually relaxing investment regulations to attract foreign capital. The country’s participation in new-generation free trade agreements (FTAs) such as the CPTPP, EVFTA, and RCEP has further facilitated capital inflows as well as market access for goods and services on a global scale.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Mr. Dinh Quang Thuan is a partner at GLOBAL VIETNAM LAWYERS. He has more 13 years of experience working at the People’s Court of Ho Chi Minh City and 21 years of working at leading law firms in Vietnam. With a broad range of expertise, Thuan is highly regarded for his skills in labor, commercial, maritime, insurance, construction, and criminal trial and appellate.

Mr. Hoang Phuoc is an associate at GLOBAL VIETNAM LAWYERS. He has more than 12 years of experience in legal practice and assistance to local and multi-national companies. His primary areas of expertise include dispute resolution at court and commercial arbitration, representation in amicable negotiation, providing advice and settling issues in relation to areas of labour and employment and so forth.

Translator

Jin Dongjie, Master of Laws, associate at Anli Partners. Area of expertise: Labor Law, ESG Compliance, Dispute Resolution.