Hire in Vietnam

The Vietnam Labor Law

The primary legal framework governing employment relationships in Vietnam is the Labor Code of 2019, which took effect on January 1, 2021. Let’s elaborate on the important provisions to understand employment obligations and statutory benefits in Vietnam for employees. 

Working Hours in Vietnam

• Employers in Vietnam can set regular working hours on an hourly/daily/weekly basis.
• The daily working hours in Vietnam cannot exceed eight hours. However, employers can set up to ten daily hours if calculated weekly. 
• In any case, the total working hours in Vietnam cannot exceed 48 hours a week.
• In accordance with labor laws, a 30-minute break is mandatory for employees working more than 6 hours, and a 45-minute break is required for night shifts.
  

Overtime Pay

Probation Period in Vietnam

Termination of Employment in Vietnam

• Employers must serve a written notice of termination per the type of employment contract:

• Employees who have been working for twelve months or more are eligible for severance pay under Vietnamese labor legislation. 
• For every year, employers may calculate a severance payout equivalent to 50% of one month's income.
  

Payroll and Taxes in Vietnam

Payroll in Vietnam includes the employer withholding the employee income tax and paying dues directly to the authorities. It also includes social security contributions and passing on paid leave benefits. Here is a quick overview of the payroll process in Vietnam: 

Employee salaries & minimum wage:

• There are four minimum wages in Vietnam depending on the locality (VND 3,070,000 to VND 4,680,000 per month)
• Employers must determine salaries in Vietnamese dong and above the applicable minimum wages.

13th month pay:

• Employers across sectors may provide a 13th-month pay bonus to their employees. 
• It is called ‘tháng lương thứ 13’ and is paid during the Lunar New Year Holiday.
• It is usually equivalent to the employee’s monthly salary. 

Tax deductions & social security contributions: 

Payroll frequency: 

• Payroll frequency in Vietnam is on a monthly basis.

Adhering to the payroll processes in Vietnam can be resource-consuming. You may partner with payroll software solutions like Skuad and manage your payroll in Vietnam better with just the click of a button! 

Employee Benefits in Vietnam

Public Holiday 

Employers in Vietnam must provide 13 days of paid holidays for:

Annual/Privilege Leave

• Employers must provide 12 paid annual leave to all their employees. 
• Employees below the age of 18, individuals with disabilities, or those engaged in strenuous, hazardous, or perilous tasks are entitled to 14 working days.
• Further, employers must offer an additional day of paid leave for every five years of continuous service of the employee.

Leave Benefits in Vietnam

Employers must adopt the following leave policy in Vietnam and extend the same to their employees: 

Maternity leave: 

• The paid maternity leave in Vietnam is six months. Expected mothers can take one month of maternity leave before childbirth and eight weeks of leave after childbirth. 
• Employees who have worked less than a year are entitled to four months of paid maternity leave.
• The duration of prenatal leave should not exceed two months.
• An employee may need to submit a medical certificate before taking maternity leave.
• Resigning employees are not eligible for payment of unused maternity leave, while terminated employees are entitled to such compensation. 

Paternity leave: 

Employers must award 5-14 days of paternity leave in Vietnam:

• Paternity leave must be taken within 60 days of the child's birth.

Parental leave:

• The length of parental leave depends on the number of children:

Sick leave: 

• Employers may award sick leave per their internal policy and the terms of social insurance contributions.
• Employees are entitled to get ten days of sick and hospitalization leave.

Compassionate & Mourning Leave:

• There is no law that mandates employers to provide unpaid compassionate and mourning leave.
• The number of compassionate and mourning leave depends on the employer and company policy. 

Education Leave:

• As per Vietnamese labor law, employees can take unpaid education leave.
• The number of education leave depends on the company policy and the employer.

Jury Duty, Military & Volunteer Leave:

• There is no law mandating jury duty, military and volunteer leave in Vietnam.
• Jury duty, military and volunteer leaves are unpaid in Vietnam. 
• The number of jury duty and military leave depends on service length. 
• The volunteer leave length depends on the employer’s policy.

Carry forward of leaves:

• There is no legal requirement mandating carry-forward leave. 
• However, numerous employers voluntarily offer this as a benefit to their staff.

Cost of Hiring an Employee in Vietnam

The cost of hiring in Vietnam can vary significantly based on whether you set up a local business entity or partner with an Employer of Record (EOR) company in Vietnam. We shall further discuss the utility associated with each approach:

Establishing a Subsidiary vs. Employer of Record (EOR) in Vietnam

Top Job Listing Sites in Vietnam

Skuad can help you locate top talent in Vietnam for any job listings. Skuad's established EOR solutions not only make it easier to hire employees in Vietnam but also navigate through payroll rules, tax compliance, and employee onboarding without obliging to the Vietnamese labor law. 

You may also rely on other online resources to help you find talent in Vietnam. Here are some of the top job listing sites in the country:

• VietnamWorks: Post job listings across various industries and access a large pool of potential candidates. 
• CareerBuilder Vietnam: A global job search platform having a presence in Vietnam.
• ITviec: A specialized platform for tech job postings and finding IT professionals in Vietnam.
• TimViecNhanh: Reach a select audience of job seekers in Vietnam.
• JobStreet Vietnam: Use this platform to post job listings and connect with job seekers in Southeast Asia.

Global employers may choose relevant job boards based on industry type, free job posting, candidate search by location, experience, and ability to showcase company profiles to hire in Vietnam. 

Compliance Risks of Hiring Employees in Vietnam

You must be aware of the following compliance risks involved while hiring employees in Vietnam:

• Hiring foreign employees: If you plan to hire foreign employees, they must obtain the necessary work visas in Vietnam. You must apply for work permits in Vietnam on their behalf. Further, registration with the Department of Labor, Invalids and Social Affairs (DOLISA) is mandatory. 

• Incorrect classification of workers: Employers must carefully classify workers as employees or independent contractors, as different rights and benefits apply to each category. Misclassifying workers can lead to significant fines and penalties.

• Social Insurance and Benefits: Employers must contribute to their employees' social security systems. Health insurance, unemployment protection, and benefits for retiring are all included. Untimely contributions towards insurance premiums can lead to legal consequences and difficulty retaining employees.

How to Hire Talent in Vietnam

You can use internal resources to hire in Vietnam or hire through a professional agency. Elaborating further, here are the most popular ways to hire employees in Vietnam:

Option 1: Establish a Subsidiary 

• Form a subsidiary in Vietnam for hiring local or foreign employees. 
• It suits global businesses with large-scale investments in Vietnam as it provides control over day-to-day employee activities. 
• However, setting up a local business entity incurs high upfront legal, financial, and administrative costs. Additionally, employment liability may transfer to the parent company. 

Option 2: Hire as a Contractor

• Vietnamese labor laws allow global employers to hire locals or foreigners (including freelancers and remote workers) on a contractual basis. 
• When you hire contractual workers, it saves costs and is more flexible. 
• However, hiring in Vietnam on a contractual basis may translate to lesser control over worker activities. 

Option 3: Use EOR Solutions - Skuad

• Global companies are opting for EOR solutions to offset their cost of hiring in Vietnam. 
• An Employer-of-record (EOR) company like Skuad can help you hire and manage employees in Vietnam without forming a subsidiary. 
• Skuad is the legal employer to hire employees in Vietnam. We manage payroll, compliance and all your HR admin tasks.

Hiring Trends in Vietnam in 2024

Vietnam is experiencing high talent demand from industries like information technology (IT) and software development, manufacturing and engineering, e-commerce and digital marketing, healthcare and pharmaceuticals, and hospitality and tourism. At the same time, employers are facing a rising challenge of skill shortage while hiring in Vietnam. 

To overcome the hiring challenge, employers must focus on employee development and retention. Some 66% of organizations in Vietnam offer a sign-on bonus to attract top management talent. Further, nearly 7 in 10 employers review vendor contracts to increase employee cost share.

The 2023 Benefits Trends Survey suggests global employers in Vietnam strike the right balance between managing costs and enhancing their portfolios, especially in employee well-being areas. You can explore digital platforms for employee experience when delivering benefits like increased hybrid working opportunities and creating a strong employer brand.

Streamline Your Hiring Process with Skuad

Looking to employ talent in Vietnam? You will need to align with local onboarding practices, have the infrastructure to pay in local currencies, stay 100% compliant with local labor laws, and more. Sounds daunting? You can simplify hiring with Vietnam with a partner like Skuad. 

Skuad enables companies to easily hire, onboard, pay and manage talent in Vietnam without setting up a local legal entity. can simplify hiring and onboarding new staff in Vietnam for your organization. Book a demo with Skuad to get started!

FAQs

Q1. What is the foreign employment law in Vietnam?

A1. The foreign employment law in Vietnam is governed by the Labor Code of Vietnam, Decree No. 152/2020/ND-CP. Any foreign individuals employed in Vietnam are subject to employment obligations under Vietnamese labor laws unless an international treaty states otherwise. 

Q2. What is the 13 salary in Vietnam?

A2. The 13th-month salary in Vietnam is an additional month's salary. Employers typically give bonus salaries to employees in preparation for the Vietnamese New Year.

Q3. How can a US company hire a foreign employee?

‍A3.To hire a foreign employee in Vietnam as a US-based business, you must first secure work permission in Vietnam, ensure that the job matches the candidate's credentials, create a clear employment contract, and organize the essential work visas and permissions. Compliance with social insurance and taxation is crucial. Language support may be needed, and maintaining proper records is essential. Engaging local experts like Skuad, who understand Vietnamese labor laws, is highly recommended for successful and compliant hiring in Vietnam.