Vietnam’s human resources landscape is evolving rapidly as the country integrates more deeply into global supply chains and investment flows.
Driven by economic growth and competition for talent, companies are adopting more strategic HR practices to meet both local regulations and international expectations.
In today’s competitive job market, employers are using data-driven recruitment strategies and expanding benefits packages to attract and retain skilled workers.
Compensation increasingly includes not just wages and bonuses, but also health insurance, paid leave, and compliance with Vietnam’s compulsory social insurance system, which covers retirement, unemployment, and medical care.
At the same time, businesses are investing more in workforce development — from on-the-job training to formal upskilling programmes — to address persistent skill shortages and raise productivity.
There is also a growing push for more inclusive, diverse workplaces, with HR teams playing a key role in shaping company culture.
This article outlines the key legal and HR considerations foreign firms need to understand when operating in Vietnam.
Vietnam’s Labour Code
Vietnam’s Labor Code (2019) is the primary legal framework governing employment relationships in the country. It establishes comprehensive regulations to protect the rights and obligations of both employers and employees.
The Labor Code outlines provisions related to labour contracts, working conditions, wages, working hours, rest periods, and termination procedures. It sets standards for employment agreements, including mandatory details like job descriptions, salary, and working hours.
The Code also regulates important aspects such as probationary periods, social insurance contributions, occupational safety, and dispute resolution mechanisms. It aims to ensure fair labour practices, improve working conditions, and address issues like wage discrepancies and unfair dismissal.
Additionally, the Labor Code provides guidelines for collective bargaining, employee representation, and the handling of workplace disputes.
Overall, the Labor Code serves to create a balanced and fair labour market, promote social justice, and support economic stability by setting clear standards for employment practices in Vietnam.
→ Full guide: Vietnam’s Labour Code for Foreign Firms
Get detailed insights into contract types, working hours, compliance risks, and employer obligations.
Labour Contracts in Vietnam
A labour contract in Vietnam formalises the employment relationship between an employer and an employee, outlining key details such as job description, work location, salary, working hours, and contract duration.
It ensures legal protection by specifying the rights and obligations of both parties, including wages, benefits, and termination procedures, in compliance with the Labor Code (2019).
The contract defines the terms of any probationary period, specifying its duration and performance evaluation criteria, and ensures the employee receives at least 85 percent of the agreed salary during this time.
It also regulates the procedures for termination, including notice periods and severance pay, and includes provisions for mandatory social insurance contributions, such as health, unemployment, and retirement insurance.
Overall, the labour contract is crucial for protecting both parties’ interests and ensuring legal compliance.
→ Deep dive: Labour Contracts in Vietnam
Learn what must be included, how to structure probation, and what foreign firms need to document.
Hiring Foreign Employees in Vietnam
As Vietnam’s economy integrates further into the global marketplace, foreign talent is increasingly sought after. However, navigating the legal requirements for hiring foreigners can be complex. Here’s a breakdown of what foreign firms need to know.
1. Work Permits and Visa Requirements
Foreign employees in Vietnam must obtain a work permit unless exempt. The process involves submitting documentation to the Department of Labor, Invalids, and Social Affairs (DOLISA) in the employee’s local area.
Work Permit Process:
- Eligibility: Only certain job positions (usually managerial or skilled) require a work permit.
- Documentation: Includes a valid passport, health check certificate, a no-criminal record from the foreign employee’s home country, and proof of qualifications.
- Application Timeline: Processing time generally takes 7-10 working days.
- Validity: Work permits are valid for up to 2 years.
Exemptions from Work Permit: Certain foreign nationals can work without a work permit, including:
- Foreigners coming to Vietnam for less than 3 months.
- Foreigners with the status of a business owner or investor.
- High-level managers, experts, and technical workers in specific industries.
2. Work Permit Fees
The costs of obtaining a work permit can vary, but companies are generally required to pay the application and processing fees. These can range from VND 1,000,000 to VND 3,000,000, depending on the location and the complexity of the application.
3. Visa Requirements for Foreign Workers
Foreign workers also need a valid visa to enter Vietnam. These visas are typically issued by the Vietnamese embassy or consulate in their home country and must correspond with the type of work they will be doing.
Types of Work Visas:
- LD1 Visa: Issued to foreign workers with long-term employment.
- LD2 Visa: Issued to those in short-term roles, typically for project-based work or technical expertise.
4. Quotas and Localisation Requirements
- Foreign Worker Quota: Vietnam imposes quotas for foreign employees in businesses, typically allowing no more than 10% of a company’s total workforce to be foreign nationals. However, this may vary by region and industry.
- Localisation of Workforces: As part of economic development and to promote local employment, foreign investors must also aim to hire Vietnamese workers for many positions, particularly for roles that can be filled by local talent.
5. Key Documents for Hiring Foreigners
To employ foreign workers legally, companies must:
- Obtain a work permit for the employee.
- Register the employee with the local social insurance office.
- Ensure the employee’s contract complies with the Labour Code of Vietnam.
👉 Need a work permit or business visa?
Get the full breakdown of visa types, exemptions, and step-by-step requirements in our Vietnam visa guide for foreign workers.
Average Salary in Vietnam
The average wage in Vietnam provides a general indicator of the typical earnings across various sectors and regions, reflecting the overall economic conditions and living standards in the country. Unlike the minimum wage, which sets a legal floor for earnings, the average wage represents a broader measure of compensation, including salaries across different job roles, industries, and levels of experience.
The average wage helps gauge economic health, income distribution, and the standard of living. It is used by businesses, policymakers, and researchers to analyse wage trends, make informed decisions about salary adjustments, and evaluate the impact of economic policies. Additionally, it can influence labour market dynamics by shaping expectations for compensation and affecting employee retention and recruitment strategies.
Overall, while the minimum wage ensures a basic standard of living, the average wage offers insights into the broader economic landscape and earning potentials within the country.
→ Explore data: Average Salary in Vietnam
Benchmark compensation by sector and location using current wage data and salary trends.
Minimum Wage in Vietnam
The minimum wage in Vietnam establishes the lowest legally permissible amount that employers must pay their employees for their work. Set by the government, the minimum wage aims to ensure a basic standard of living for workers and address income inequality. It applies across various sectors and is intended to cover the essential needs of employees, including food, housing, and transportation.
The minimum wage is periodically updated to reflect changes in the cost of living and economic conditions. It is determined based on geographic regions, with different rates set for different areas to account for varying living costs. This ensures that wages are appropriate to local economic conditions.
Employers must adhere to these minimum wage standards, and any payment below this threshold is illegal. The minimum wage also serves as a baseline for negotiating wages and benefits, contributing to fair labour practices and economic stability.
→ Wage breakdown: Minimum Wage in Vietnam
Check current regional rates, recent increases, and how it affects contracts and insurance.
Working hours, overtime, and leave in Vietnam
Why it matters: Labour Code compliance on working hours, overtime, and leave entitlements is essential for any employer operating in Vietnam. Missteps in these areas can lead to penalties, strained employee relations, and reputational damage.
Standard working hours in Vietnam
Under Vietnam’s Labour Code (2019), the standard working week is:
- Maximum: 8 hours per day, 48 hours per week.
- Recommended: Many firms operate on a 40–44 hour workweek, typically with a half-day on Saturdays or full weekends off, especially in office settings.
Employers may implement flexible work arrangements, provided they comply with total working hour limits and occupational safety standards.
Overtime limits and rules
Employers can request employees to work overtime, but only within legal limits:
- Daily cap: No more than 4 hours/day
- Monthly cap: 40 hours/month
- Annual cap: 200 hours/year, extendable to 300 hours for certain sectors (e.g. electronics, textiles)
Overtime must be mutually agreed and compensated at enhanced rates:
- 150% of the regular wage for extra hours on weekdays
- 200% on weekly days off
- 300% on public holidays or paid leave days (plus the holiday wage)
Leave entitlements
Annual leave:
- Employees working full-time for 12 months are entitled to 12 days of paid annual leave, increasing with seniority (1 extra day every 5 years of service).
- Part-time or new employees earn leave pro rata.
Sick leave:
- Covered under Vietnam’s social insurance scheme.
- Employees can receive up to 30–60 days/year, depending on their contribution period and nature of illness.
Maternity leave:
- Female employees are entitled to 6 months of paid maternity leave, funded by social insurance.
- Additional leave is granted in case of multiple births.
- Fathers are entitled to 5–14 days of paternity leave, depending on the number of children born and type of birth (natural or C-section).
Key compliance tips
- Maintain accurate records of working hours and leave balances.
- Ensure overtime requests are documented and compensated correctly.
- Communicate entitlements clearly in labour contracts or HR policies.
Public Holidays in Vietnam
Public holidays in Vietnam provide official days off from work, allowing employees to rest and celebrate significant national and cultural events.
These holidays are established by the government and vary each year based on the lunar calendar and fixed dates.
They serve to honour important events such as the Lunar New Year (Tet), National Day, and Victory Day, reflecting the country’s history and traditions.
Public holidays ensure that workers have time to spend with family, participate in cultural festivities, and recharge, contributing to overall well-being and work-life balance. Employers are required to grant these days off and typically provide additional compensation for work performed on public holidays.
The observance of public holidays also promotes national identity and unity by celebrating shared values and historical milestones. Overall, public holidays in Vietnam play a crucial role in maintaining cultural heritage and ensuring employee welfare.
→ Full calendar: Public Holidays in Vietnam
See the updated holiday schedule, rules on paid leave, and how to handle shift work compensation.
FAQ
Is a written labour contract mandatory in Vietnam?
Yes. All employment relationships must be formalised with a written contract, clearly outlining wages, job scope, working hours, and insurance obligations.
What are the social insurance contributions for employers in Vietnam?
Employers typically contribute 21.5 percent of an employee’s salary to social, health, and unemployment insurance for local workers, and 20.5 percent for foreign employees.
What is the current minimum wage in Vietnam?
As of 2025, Vietnam’s minimum wage ranges by region, from VND 3.25 million to VND 4.68 million per month. Rates are reviewed annually and vary based on location.
Do foreign workers in Vietnam receive the same benefits as locals?
Foreign employees with contracts over one year must participate in Vietnam’s compulsory social insurance system (except unemployment insurance), including health and retirement coverage.
How many public holidays are employees entitled to in Vietnam?
Employees are entitled to at least 11 paid public holidays per year, including Tet (Lunar New Year), National Day, and Reunification Day. Additional leave may apply depending on the role or contract.
What’s next?
Vietnam’s human resources landscape is undergoing significant transformation as the country integrates more into the global economy. With rapid economic growth, companies are increasingly focused on strategic HR management to align with both local and international standards.
And it is in line with the dynamic nature of human resources in Vietnam that key rules and regulations can change quickly. With this in mind, foreign firms looking to keep abreast of changes in the industry can best do so by making sure to subscribe to the-shiv.
First published September 16, 2024. Last reviewed March 23, 2025.