- Overview: Vietnam
- Global PEO and payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Vietnam
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Vietnam Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Vietnam and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Vietnam as well as in other countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Vietnam instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Vietnam .
We are experts in global workforce employment in Vietnam, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Vietnam.
See Hiring and Firing Workforce in Vietnam Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Vietnam or would like to get more details.
Hiring and Firing Workforce in Vietnam Guide
# Employment Contracts
Employers may establish an employment relationship with their employees in a definite term (between one and three years), indefinite term (no time limit) or seasonal term (maximum of one year). When concluding any contract of employment, it is obligatory to specify the binding obligation of the employment, including job description, intended duration of contract, workplace location, working hour, salary, terms of payment and entitlements. Employers may renew a definite and seasonal contract once within the first 30 days of its expiration. Contracts which are not renewed within the 30 days of its expiration will be renewed automatically if the employee continues to work for the employer after the expiry date.
# Minimum statutory employment rights
# Hours of work
Generally, employees are prohibited to work more than 8 hours a day and 48 hours a week. Employees who work in a difficult, harsh or hazard condition are not permitted to work more than 6 hours per day. Employees have the right to an hour break each work day. Under 18 employees, employees who have babies of less than a year old or those whose pregnancy is more than 7 months old are entitled to an extra one hour break each day. Employees may work night shifts between the hours of 10 p.m. and 6 a.m.
# Probation period
Employees with definite and indefinite contract may be placed on probation at the commencement of their job. Customarily, the length of probation period depends on the position an employee is employed for and the required qualification. Probation period for employees whose position requires technical prowess or intermediate level qualification are limited to a maximum of 30 days. Employees who are employed for a position that requires a college level technical/professional qualification may be given up to 60 days probation. Employees employed for other positions may be given up to 6 days probation. Employees with seasonal contract of less than one year cannot be put on probation.
# Annual leave
The right to annual paid leave entitlement is available to all employees who have worked a minimum of one year in the company. For such employees, employers must give them 12 days leave if they work in safe (normal) working environment, 14 days leave if they if they work in difficult, harsh or hazard working conditions, and 16 days in case of extremity of difficult, harsh or hazard working conditions. Employees are entitled to an extra one-day annual leave for each 5 completed years of work. With the consent of the employees, employers are required to control the schedule for annual leave and inform them of the due date ahead of time. Employers are obligated to compensate employees for any untapped leave.
# Parental leave
Subject to nature of job perform by an employee, a female employee is entitled to 4 to 6 months of paid maternity leave plus 5 prenatal check-ups, one day or two days per check-up depending on specific factors. Employees who have multiple births are entitled to an added one month leave for each child. Maternity benefit is paid to employees who have made payment to the Social Insurance Fund for a minimum of 6 months out of the 12 months preceding the leave. Vietnamese national employees who are under the maternity leave are entitled to 100% of their average monthly salary or remuneration on which social insurance premiums were based.
However, the maximum salary or remuneration during maternity leave is capped at 20 times the base salary. Extra allowance that equals 2 months’ national minimum salary per child is paid to birth mothers after birth or adoptive mother (until the child is 4 months old).
A male employee whose wife gives birth naturally is entitled to take five days of paternity leave. For each leave day, the employee must be paid a pro-rated amount of the monthly allowance by the social insurance fund (applicable to Vietnamese employees only).
# Sick leave
Employees must be given 30 days’ sick leave a year if their total contribution period to the social insurance is not up to 15 years, 40 days’ sick leave a year if their total period of contribution is between 15 and 30 years, and 60 days sick a year if they have made payment to the system for a period of 30 years or more. These conditions only apply to employees who work under normal working condition.
Employees who work in difficult, harsh or hazard working conditions are entitled to 40 days’ sick leave a year if their total contribution period to the social insurance is not up to 15 years, 50 days’ sick leave a year if their total period of contribution is between 15 and 30 years, and 70 days if they have contributed for 30 years or more to the system.
Vietnamese employees entitled to sick pay covered by the social insurance fund in amount of 75% of their salary or remuneration on which social insurance premiums were based in the month preceding their leave.
The maximum overtime an employee can work during any given working time is 4 hours per day, 30 hours per month, 200 or 300 hours per month (subject to reasons for overtime). For every overtime worked employees are entitled to be remunerated at a premium pay as follows: 150 percent of base pay if worked at the normal workday, 180 percent of base pay if work during night shift, 200 percent of base pay if worked over the weekend, and 300 percent of base pay if worked on holiday.
# State minimum salary
The minimum salary as at 2017 is 3750 dong (VND) thousand per work month.
# Employment termination
The parties of employment may terminate the contractual relationship existing between them either unilaterally or by mutual agreement.
For unilateral termination (when permitted by law), employers must provide advance notice to the employees as well as employees who resign are also required to give advance notice to their employers. In both cases, the relevant time limits are 45 days in advance for indefinite term employment contracts, 30 days for definite term (fixed term) employment contracts, and three working days for seasonal or specific-job employment contracts with durations of less than 12 months.
Employees are entitled to severance pay equaling half of their monthly salary per year worked plus other agreed benefits if after working for more than a year, they are dismissed for any reasons other than disciplinary. Employees who have not worked up to one year with the employer or those who are dismissed for disciplinary reasons are not eligible for severance package.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Vietnam by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.