You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

July 17, 2013

Legal Update: Highlights of the New Labor Code of Vietnam

Subscribe to Updates

On May 1, 2013, the new Labor Code (Law 10-2012-QH13 of June 18, 2012) entered into force. This legal update highlights four important changes to the Vietnamese labor laws, introduced by the new Labor Code.

Working Hours

Employers may, pursuant to the new Labor Code, determine working hours on a daily or weekly basis. The regular working hours, however, may not exceed 10 hours in one day or 48 hours per week. Further, the new Labor Code imposes limitations on the number of overtime hours that an employee may work. The maximum number of overtime hours that an employee may work is 50% of the employee’s regular working hours in one day, 30 hours in a month, and 200 hours in a year. If the employer determines regular working hours on a weekly basis, the working hours and overtime hours together may not exceed 12 hours in one day.

Internal Labor Rules

Employers with 10 or more employees were already, under the old Labor Code, required to establish Internal Labor Rules (ILRs) in writing and to register them with the local labor authorities. The new Labor Code amends the provisions of the old Labor Code with respect to both the registration and the contents of ILRs.

The application for registration of the ILRs must, according to the new Labor Code, include an “opinion” obtained from the grassroots-level labor union existing within the employer. Should no such union exist, the district-level labor union (which is usually a government-controlled entity) must be consulted. Thus, obtaining the opinion of a labor union has been made a precondition for obtaining approval for the ILRs.

As for contents, the new Labor Code abolishes as a disciplinary measure “the transfer of an employee to another position with lower wage for a maximum period of six months.” Other previously existing disciplinary measures—including reprimand, deferral of wage increase, removal from office, or dismissal—remain intact in the new Labor Code.

Labor Outsourcing

The new Labor Code introduces an entirely new section on labor outsourcing, but with fairly extensive restrictions. Most notably, labor outsourcing is permitted for a limited number of jobs only, and the entity utilizing the outsourced persons must pay salary at least equal to the salary it pays to its own employees who have the same professional qualifications and are doing the same job or a job of the same value. The duration of the labor outsourcing may not exceed 12 months and may not be extended.

Work Permits

The new Labor Code abolishes the work permit exception for foreign citizens working in Vietnam for less than three months; all foreign citizens working in Vietnam must have a work permit, regardless of the time they intend to work in the country. However, a few exceptions apply. The work permit requirement is waived for capital-contributing members or owners of limited liability companies, members of the board of the management of shareholding companies, and lawyers, among others. The new Labor Code reduces the maximum term of work permits for foreign employees from three to two years.

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

September 30, 2025
Over the past several years, during and after the COVID-19 pandemic, Thai employees and labor unions have faced reductions in benefits and welfare from their employers. Consequently, they have pursued various strategies to enhance their compensation packages. One such approach involves establishing employee committees to negotiate with employers regarding benefits and welfare. Additionally, companies with existing unions typically nominate representatives to serve on these employee committees. Many employers, however, remain unfamiliar with both the committee’s role and the heightened procedural requirements that apply when disciplinary measures are contemplated against committee members. Because any violation of a committee member’s statutory rights can expose the employer—and its directors or authorized representatives—to criminal liability, a clear understanding of the relevant legal framework is essential. The Labor Relations Act B.E. 2518 (LRA) provides the statutory foundation for establishing employee committees. The purpose of the committee is to promote harmonious industrial relations and create a formal channel through which employees and employers can discuss workplace matters on a regular basis. Any workplace that employs at least fifty employees must, upon request by employees or the labor union, facilitate the creation of a committee. Members may be elected directly by employees or, where applicable, appointed by the labor union. Each member serves a three-year term. The LRA prescribes minimum committee sizes based on the employer’s headcount, as shown in the table below. If union members constitute more than 20 percent of the total workforce, the union must appoint at least one more committee member than the number of nonunion members elected by the general workforce. If union membership exceeds 50 percent of the workforce, the union acquires the exclusive right to appoint every committee member. Where multiple unions exist and their combined appointments would exceed the statutory committee size, the employer may lawfully refuse to
Read More
September 25, 2025
Tilleke & Gibbins’ labor and employment team in Hanoi and Ho Chi Minh City has contributed the Vietnam chapter to Labor and Employment Disputes 2026. Drawing on the expertise of three of the firm’s employment specialists, the chapter provides practical guidance for navigating employment disputes in Vietnam and covers: Pre-action considerations: key requirements, third-party funding, contingency fee arrangements Issuing a claim: forum, territorial jurisdiction, standing, commencing claims, fees, service, defendants and legal personality, types of claims, time limits, counterclaims Case management: procedure, rules, amendments to claims, adding parties, consolidating proceedings, class and collective actions, evidence, witnesses, tactical considerations Interim relief: availability, requirements Trial: hearings conduct and time frames, confidentiality and public access, media reporting, elements of successful claims and burden of proof Alternative dispute resolution: available types, requirements and expectations, enforcement Collective employment and labor rights: enforcement and standing Remedies and enforcement: available remedies, assessing compensation, enforcement mechanisms Appeals: procedure, time frames, other means of challenge Updates and trends: recent cases and developments, technology developments, other issues The Vietnam chapter is available for download below. Tilleke & Gibbins also contributed the Cambodia and Thailand chapters to Labor and Employment Disputes 2026. Readers can also gain 30 days of complementary access to the full Labor and Employment Disputes 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More
September 25, 2025
In the Thailand contribution to Labor and Employment Disputes 2026, four members of Tilleke & Gibbins’ Bangkok labor and employment team outline key aspects of dispute resolution in Thailand. Their analysis, part of Lexology Panoramic’s comparative guide covering jurisdictions worldwide, addresses the following areas: Pre-action considerations: key requirements, third-party funding, contingency fee arrangements Issuing a claim: forum, territorial jurisdiction, standing, commencing claims, fees, service, defendants and legal personality, types of claims, time limits, counterclaims Case management: procedure, rules, amendments to claims, adding parties, consolidating proceedings, class and collective actions, evidence, witnesses, tactical considerations Interim relief: availability, requirements Trial: hearings conduct and time frames, confidentiality and public access, media reporting, elements of successful claims and burden of proof Alternative dispute resolution: available types, requirements and expectations, enforcement Collective employment and labor rights: enforcement and standing Remedies and enforcement: available remedies, assessing compensation, enforcement mechanisms Appeals: procedure, time frames, other means of challenge Updates and trends: recent cases and developments, technology developments, other issues The complete Thailand chapter can be downloaded below. Tilleke & Gibbins also contributed the Cambodia and Vietnam chapters to Labor and Employment Disputes 2026. Readers can also gain 30 days of complementary access to the full Labor and Employment Disputes 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More
September 25, 2025
Four of Tilleke & Gibbins’ labor and employment specialists in Phnom Penh have authored the Cambodia chapter of Labor and Employment Disputes 2026, the latest edition of Lexology Panoramic’s global guide to handling labor and employment disputes. The chapter provides practical insights on a wide range of dispute resolution issues, including: Pre-action considerations: key requirements, third-party funding, contingency fee arrangements Issuing a claim: forum, territorial jurisdiction, standing, commencing claims, fees, service, defendants and legal personality, types of claims, time limits, counterclaims Case management: procedure, rules, amendments to claims, adding parties, consolidating proceedings, class and collective actions, evidence, witnesses, tactical considerations Interim relief: availability, requirements Trial: hearings conduct and time frames, confidentiality and public access, media reporting, elements of successful claims and burden of proof Alternative dispute resolution: available types, requirements and expectations, enforcement Collective employment and labor rights: enforcement and standing Remedies and enforcement: available remedies, assessing compensation, enforcement mechanisms Appeals: procedure, time frames, other means of challenge Updates and trends: recent cases and developments, technology developments, other issues The full Cambodia chapter is available for download below. Tilleke & Gibbins also contributed the Thailand and Vietnam chapters to Labor and Employment Disputes 2026. Readers can also gain 30 days of complementary access to the full Labor and Employment Disputes 2026 guide and the rest of Lexology Panoramic’s varied offerings through this link.
Read More