Hyred’s Official Employer Guide On Hiring In Vietnam Now!
Hiring for potential overseas employees, especially in Southeast Asia, may be difficult if you’re unsure of where to begin. But at Hyred, we’ve got you covered. Here’s our official guide on everything you need to know about hiring an employee in Vietnam!
Facts & Stats
Vietnam is the 3rd most populous country in Southeast Asia and one of the fastest-growing economies in the world, its GDP increasing 6-fold in less than 40 years. It is an attraction for many foreign entrepreneurs and investors, thanks to its relatively affordable but highly qualified population. Vietnam is also a member of ASEAN and the World Trade Organisation, enabling smooth trading with other countries. Vietnam also aims to become a high-income country by 2045, and has also committed to carbon neutrality by 2050. As of 2021, their strongest sector remains in agriculture. General statistics for Vietnam are listed below:
Employment Details
Vietnam’s main labour law is the Labour Code, with the most recent version taking effect on 1st January 2021, which seeks to implement regulations with both employers and employees in mind in line with both market practice and international standards. The Vietnamese labour law provides for the basic terms and working conditions for all employees, with some exceptions.
Vietnam labour unions are designed to help Vietnam stay competitive and help their workers remain employable. Vietnam also allows independent trade unions to operate as opposed to the supervision of the state-run Vietnam General Confederation of Labour (VGCL). Yet these independent unions will still be required to get permission from state authorities to operate. Employees may seek their unions for help regarding unfair treatment or non-compliance with their employment terms.
In effect by July 2024, there have been changes to the regulation and provision of salary in Vietnam. Please view the Pay & Tax section for more information.
On the other hand, Vietnam’s worker classification tax and labour laws distinguish between an independent contractor and a full-timer. If the individual meets the legal definition of an employee but is classified as a contractor, your company will face penalties.
Inclusively, the labour contract should be written in Vietnamese. According to Vietnam employment laws, if one of the parties is a foreigner (this includes foreign-invested enterprises), the contract may be bilingual (written in Vietnamese then followed by a translation into a foreign language, but the Vietnamese version prevails in case of inconsistencies between the two versions). Also, after two definite term contracts in a row, an indefinite term contract must be concluded.
Pay & Tax
As of July 1, 2024, the monthly minimum wage in Vietnam has increased by 6% and is determined by region. Region 1 pertains to urban areas such as Hanoi and Ho Chi Minh City. Region 2 pertains to rural areas of Region 1 as well as other urban areas such as Can Tho, Da Nang, and Hai Phong. Region 3 pertains to the provincial cities and districts of Bac Ninh, Bac Giang, and Hai Duong provinces. Region 4 encompasses all other remaining areas of Vietnam.
Region 1 will be 4,960,000 VND/month, Region 2 will be 4,410,000 VND/month, Region 3 will be 3,860,000 VND/month, and Region 4 will be 3,450,000 VND/month. The overtime pay is at least 150.00% of actual hourly wage on normal working days, 200.00% on a weekly day off, and 300.00% on a public holiday or paid days off.
You can also find the following rates for employment taxes and statutory fees below:
Statutory Time Off & Leave Policy
Employees in Vietnam are entitled to five types of leave: 1) minimum 12-16 days of annual paid leave, 2) 30-60 days of sick leave, 3) at least 6 months of maternity leave (starting 2 months before delivery with full wages), 4) at least 30 days of paternity leave, and 5) 1-day of unpaid leave or time off (i.e. wedding of relative, death of relative, etc.). An employee must also be given 1 additional day of paid annual leave for every 5 years of consecutive service for an employer; there is no cap on these additional leave days. Any other unpaid time off is subject to agreement between the employer and the employee.
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Employees engaged in hazardous or heavy industries can take 40-70 days of annual paid sick leave, though these days can be limited by how long they’ve been paying their social security fund.
Below are the exact days off for certain leaves and specific employee conditions:
Alongside leaves, employee benefits are available as well. Sick pay is paid by the social insurance fund in Vietnam and applies to both Vietnamese and expatriate employees. Vietnamese employees entitled to sick pay are entitled to 75% of their salary or remuneration on which social insurance premiums were based in the month preceding their leave. Employees convalescing after an illness are entitled to 25-40% of their normal wages during their sick leave.
You can also find the list of upcoming 2025 public holidays for Vietnam below:
Termination
For unilateral termination, the employer must provide advance notice to the employee within the minimum statutory notice period. Employees who resign are also required to give advance notice to their employers within the minimum statutory notice period: 1) no notice needed for expiration of employment contracts, 2) 45-day notice in advance for indefinite term employment contracts, 3) 30-day notice in advance for fixed-term employment contracts, and 4) 3-working-day notice in advance for employment contracts with durations of less than 12 months.
Additionally, employers are to provide severance pay to employees whose employment contracts are terminated and who have been regularly working for the employer for at least 12 months. The severance pay is equal to a half-month's wages for each year of employment. Salary for the purposes of calculating the severance pay is the average salary under the employment contract for the six months immediately preceding termination of the employment contract.
While probationary periods are optional in Vietnam, they are usually between 6-60 days, depending on the skill level required for the position. Employees must also be paid at least 85% of their normal wages during this period and be notified of the probation outcome at least 3 days before the period ends.
Contact Us
Vietnam offers a wealth of potential hiring prospects waiting for the right employer. So if you’re seeking help in hiring and managing top talent in Vietnam, Hyred has the right services for you! With a seamless integration and local legal entity, we take care of compliance matters so that you can start your globalising plan immediately. Visit our Homepage now to set up a free 30-minute consultation for more information!
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Check out the previous articles in our SEA Hiring Guides series & stay tuned for the rest: