Vietnam, a Southeast Asian country with a rapidly growing economy, has increasingly garnered attention from foreign investors. With robust industrialization and globalization, the country has made significant strides in reformulating its employment laws to match international standards. Understanding Vietnam’s employment law is essential for businesses and employees to navigate the job market effectively.
Legal Framework and Key Legislations
The primary legal document governing employment in Vietnam is the Labor Code, which has undergone multiple revisions, with the most recent one being issued in 2019, effective from January 1, 2021. This comprehensive statute covers a wide array of areas, including employment contracts, work hours, wages, occupational safety, and dispute resolution.
The Labor Code is supplemented by various decrees, circulars, and guidelines issued by the Ministry of Labor, Invalids and Social Affairs (MOLISA), providing more detailed instructions on its implementation.
Employment Contracts
In Vietnam, employment contracts can be structured in several forms: indefinite term, definite term, seasonal or specific jobs. Each type has distinct characteristics:
– **Indefinite Term Contracts**: These contracts do not specify an end date.
– **Definite Term Contracts**: These are for a fixed period, typically ranging from 12 to 36 months.
– **Seasonal Contracts**: These are for seasonal or specific jobs that usually last less than 12 months.
Contracts must be in writing, except for jobs with a duration of less than one month. They should clearly detail job descriptions, wages, work hours, rest breaks, personal protective equipment, and other terms agreed upon by both parties.
Wages
Vietnamese law mandates a minimum wage that is periodically adjusted by the government to reflect living cost changes. As of recent updates, the minimum wage differs by region, recognizing variations in living standards across the country. Employers are required to pay wages on time, and in Vietnamese Dong, unless otherwise agreed.
Work Hours and Overtime
The standard workweek in Vietnam is 48 hours, with a daily work limit of 8 hours. Employers can set a maximum of 12 hours of overtime per week, but it must not exceed 200 hours per year, except in special cases allowed to extend up to 300 hours.
Workers are entitled to at least one full day of rest per week. Overtime and night work are compensated at higher rates, which employers must adhere to strictly.
Leave and Benefits
Employees in Vietnam are entitled to various types of leave:
– **Annual Leave**: Employees with one year of service are entitled to 12 paid annual leave days, which increases by one day every five years of employment.
– **Public Holidays**: Workers enjoy 11 public holidays with full pay.
– **Sick Leave and Maternity Leave**: These are stipulated under the Social Insurance Law. Women employees are entitled to six months of maternity leave, and workers can take paid sick leave as per their social insurance contributions.
Occupational Safety and Health
Employers must ensure a safe working environment, conduct regular health checks, and comply with occupational safety and health standards set forth by MOLISA. Employers are also required to implement preventive measures and provide appropriate training on these standards to employees.
Social Insurance and Unemployment Insurance
Contributions to social insurance, health insurance, and unemployment insurance are mandatory. The contributions are shared between the employer and the employee. Social insurance covers benefits like medical care, maternity, work-related accidents or diseases, retirement, and death.
Dispute Resolution
Employment disputes in Vietnam are categorized into individual and collective disputes. These disputes can be resolved through negotiation, mediation by grassroots-level trade unions, arbitration, or through the labor court system. MOLISA plays a crucial role in overseeing and regulating these processes.
Employment of Foreign Workers
Foreigners working in Vietnam must obtain a work permit, except in specified exempt cases. The hiring of foreign workers is subject to certain conditions, including demonstrating the necessity of hiring foreign expertise that is not locally available.
Conclusion
Understanding the employment law in Vietnam is crucial for both employers and employees to ensure compliance and protect their rights. Vietnam’s labor legislation aims to create a balanced relationship between employee welfare and the operational needs of businesses. For international companies eyeing Vietnam for expansion, a thorough grasp of these legal nuances is essential for thriving in this vibrant, burgeoning economy.
Suggested related links about Understanding Employment Law in Vietnam:
– Vietnam Briefing
– DLA Piper
– Lexology
– International Law Office
– Baker McKenzie
– Hogan Lovells
– Herbert Smith Freehills
– Ashurst
– Allens
– Law Times Journal