Introduction

Vietnam is a popular destination for foreign investors looking to set up a business or expand their operations in Southeast Asia. However, hiring employees in Vietnam comes with its own set of challenges, particularly when it comes to complying with the country’s labor laws. In this article, we will provide a comprehensive overview of hiring employees in Vietnam, including the types of employment contracts, legal obligations, and termination procedures.

Vietnam’s Employment Contracts

As mentioned earlier, there are two types of employment contracts in Vietnam: indefinite term and definite term. Indefinite term contracts are those in which the term and time for termination are not determined by the parties. On the other hand, definite term contracts are those in which the term is determined by the parties, not exceeding 36 months, and can only be renewed once.

An employment contract in Vietnam must include specific information, including the names and addresses of the employer and employee, the job and workplace, duration of the contract, salary payment, working hours and rest periods, personal protective equipment, and insurance coverage. Employers and employees can unilaterally terminate a contract, but specific notice periods must be given.

Legal Obligations

Companies that want to do business in Vietnam must follow the provisions of the Labor Code, which outlines the rights and obligations of both employers and employees. Here are some of the essential legal obligations that companies must comply with:

  • Working hours: According to the Labor Code, the maximum number of working hours per week is 48, with a maximum of eight hours per day. Employers must provide at least one day off per week for their employees.
  • Labor agreements: Employers must sign written labor agreements with their employees before they begin work. These agreements must include specific information, including job responsibilities, salary, and working hours.
  • Social insurance: Employers must contribute to social insurance, health insurance, and unemployment insurance for their employees. The amount of the contribution varies depending on the employee’s salary.
  • Overtime: Employers must pay overtime wages to employees who work beyond the normal working hours. The overtime wage rate is usually 150% of the regular hourly rate.
  • Strikes: Strikes are legal in Vietnam, but specific procedures must be followed. Employers must provide advance notice to the authorities and the employees before a strike can take place.
  • Termination of employment contracts: As mentioned earlier, employers and employees can unilaterally terminate a contract. Employers must follow specific notice periods, depending on the type of contract.

FAQs

Q: What is the maximum number of working hours per week in Vietnam?

A: The maximum number of working hours per week is 48, with a maximum of eight hours per day.

Q: Do employers need to provide insurance coverage for their employees in Vietnam?

A: Yes, employers must contribute to social insurance, health insurance, and unemployment insurance for their employees.

Q: Are strikes legal in Vietnam?

A: Yes, strikes are legal in Vietnam, but specific procedures must be followed.

Conclusion

Hiring employees in Vietnam can be a daunting task, especially for foreign investors who are unfamiliar with the country’s labor laws. However, by understanding the different types of employment contracts, legal obligations, and termination procedures, companies can ensure they comply with Vietnamese labor laws and create a harmonious work environment for their employees.