Effortless Hiring in Vietnam

Employment Contracts

• Employment contracts in Vietnam can be oral or written; however, a written contract in Vietnamese is recommended for clarity. Contracts should include:
• Job responsibilities.
• Compensation.
• Working hours.
• Leave entitlements.
• Termination conditions.
• Types of contracts recognized include:
• Fixed-Term Contracts: Engage employees for a specified duration, not exceeding three years. These contracts must be in writing and are subject to specific conditions.
• Indefinite-Term Contracts: Provide ongoing employment without a predetermined end date.

Probationary Period

• A probationary period may last up to 60 days for specialized roles and 30 days for less technical positions. During this period, either party can terminate the contract without prior notice.

Payroll Frequency

• Employees are generally paid on a monthly basis, with payments made no later than 7 days after the salary period ends.

Minimum Wage

• Minimum wages in Vietnam vary by region, with urban centers like Ho Chi Minh City and Hanoi commanding higher rates. Employers must adhere to the applicable regional minimum wage.

Overtime

• The standard workweek is 48 hours, with overtime compensated as follows:
• 150% of the standard rate on weekdays.
• 200% on weekends.
• 300% on public holidays.
• Overtime is limited to 50% of normal working hours in a single day, with a maximum of 40 hours per month and 200 hours per year.

Employee Contributions

1. Social Insurance: Employees contribute approximately 8% of their monthly salary to the social insurance fund, which covers pensions and health insurance.
2. Health Insurance: Employees contribute approximately 1.5% of their monthly salary to health insurance.
3. Unemployment Insurance: Employees contribute approximately 1% of their monthly salary to unemployment insurance.

Employer Contributions

1. Social Insurance: Employers contribute approximately 17.5% of the employee's gross salary (including health and unemployment insurance).
2. Health Insurance: Employers also contribute approximately 3% of the employee's gross salary to health insurance.
3. Unemployment Insurance: Employers contribute approximately 1% of the employee's gross salary to unemployment insurance.

Personal Income Tax (PIT)

• Vietnam employs a progressive income tax system with rates ranging from 5% to 35% depending on income levels.

Types of Leave in Vietnam

1. Annual Leave

• Employees are entitled to a minimum of 12 days of paid annual leave after completing one year of service. An additional day is added for every five years of service.

2. Sick Leave

• Employees are entitled to sick leave based on contributions to the Social Insurance Fund:
• Up to 30 days per year for employees working under normal conditions.
• Up to 40 days per year for those working under hazardous conditions.

3. Maternity Leave

• Female employees are entitled to 98 days of maternity leave (including both pre- and post-natal leave), with full pay provided by the employer during this period, reimbursed by social security.

4. Paternity Leave

• Fathers are entitled to between 5 to 14 days of paid paternity leave, depending on the number of children born.

5. Public Holidays

• Vietnam recognizes 11 public holidays annually. If employees are required to work on a public holiday, they must be compensated at 300% of their standard wage or given time off in lieu.

Mandatory Benefits

1. Social Insurance: Provides benefits such as medical care, disability support, maternity benefits, and pensions. Both employers and employees contribute equally to the fund.
2. Health Insurance: Employers must provide health insurance coverage through social security contributions.
3. Occupational Risk Insurance: Employers must provide insurance covering work-related accidents and illnesses.

Optional Benefits

Employers may offer additional benefits such as private health insurance, meal vouchers, transportation allowances, and flexible working hours to attract and retain talent.

Notice Period

While Vietnamese law does not mandate a specific notice period for termination, it is customary for employers to provide reasonable notice based on company policy or collective agreements:

• For definite-term contracts: Typically requires notice equivalent to the remaining term of the contract.
• For indefinite-term contracts: Generally requires at least one month's notice.

Severance Pay

• Employees who have worked for more than 12 months are entitled to severance pay equivalent to one month's salary for each year of service upon termination without cause.

Just Cause Termination

• Termination can occur for just cause under specified conditions outlined in labor laws (e.g., misconduct). In such cases, no severance is owed; however, written notice detailing the reasons must be provided.