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

December 12, 2019

Vietnam Issues Revised Labor Code

Subscribe to Updates

On November 20, 2019, the National Assembly of Vietnam issued a revised version of the Labor Code, the primary legislation governing employment and employer-employee relationships in Vietnam. The new Labor Code will take effect on January 1, 2021, replacing the current Labor Code of 2012.

The new Labor Code introduces a number of large and small changes, with the general intention being to address shortcomings and clarify unclear provisions of the current law, and bring Vietnam’s labor law more in line with international standards.

Some of the more notable changes include the following:

  • Unilateral termination by employees: Employees will be allowed to unilaterally terminate their contracts without providing any reason, provided they meet the requirements for advance notification.
  • Additional holiday: The National Day holiday on Sept. 2 will become a two-day holiday – the 11th public holiday on the Vietnamese calendar.
  • More overtime allowed: Employees will be allowed to work up to 40 hours of overtime in a month (instead of the previous limit of 30).
  • Types of labor contracts: Seasonal/specific-job labor contracts are no longer mentioned in the new Labor Code, which has only (i) indefinite-term labor contracts, and (ii) definite-term (of up to 36 months) labor contracts, which include the previous seasonal/specific-job contracts.
  • Multiple fixed-term contracts: While the current Labor Code only allows the signing of two consecutive definite-term contracts—the third contract must be an indefinite-term contract—the new Labor Code provides an exception for elderly employees, who can continue to work on definite-term contracts. Also, the terms of expatriate employees’ labor contracts must be in line with the terms of their work permits (maximum two years); in other words, indefinite-term labor contracts are not applicable to expats.
  • Validity of electronic labor contracts: Labor contracts concluded through electronic means (such as by email) will have the same validity as printed paper contracts.
  • No direct interference in salary structure: Companies are free to establish their own wage scales and salary structures, provided they at least meet the regional minimum wages set by the government.
  • Increase in retirement age: The retirement age, currently 55 for women and 60 for men, will increase to 60 for women and 62 for men. This change will be phased in gradually, with the retirement age increasing by 3 months each year for men and 4 months each year for women until the new limits are reached.

With more than a year before implementation, companies have plenty of time to consider their current work rules and practices, make the necessary changes before implementation, and consult counsel if needed to ensure compliance. For more information on the new Labor Code and how it may impact your business in Vietnam, please contact us at [email protected].

Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

January 12, 2024
On December 28, 2023, Cambodia’s Ministry of Labor and Vocational Training (MLVT) issued Notification No. 110/23 on the issuance of work permits for foreign employees, in accordance with the country’s Labor Law and Prakas 195 dated August 20, 2014, on work permits and employment cards for foreign employees. This is a more comprehensive notification than existed previously, as it specifically clarifies the parties that are required to apply for work permits and employment cards. Notification No. 110/23 specifies that the following types of foreign individuals must hold a valid foreign work permit and/or employment card in order to work in Cambodia: A foreign employer whose name is stated in an enterprise’s patent tax certificate must hold a foreign work permit. A foreign employee whose name is stated in an enterprise’s patent tax certificate must hold a foreign work permit and an employment card. Self-employed individuals must hold a foreign work permit and an employment card. Applications for work permits and employment cards can be submitted through the MLVT’s online portal, accompanied by the following required documents: Valid passport; Latest patent tax certificate; Physical examination form; and Photo (4×6 cm) However, foreign shareholders and members of the board of directors as defined in the company’s articles of incorporation who do not have a Cambodian resident visa are not required to obtain a work permit or employment card. For more information on regulations and requirements for foreign employees in Cambodia, please contact Tilleke & Gibbins at [email protected].
Read More
December 15, 2023
Tilleke & Gibbins’ office in Yangon provided the Myanmar chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This global guide, which covers 45 jurisdictions worldwide, examines the issue of workplace restructurings, particularly in relation to the needs of multinational companies. The Myanmar chapter was written by Kyaw Min Tun, an associate in the firm’s Myanmar office. The Q&A-style chapter focuses on key areas related to workplace restructuring, covering each of the following topics in detail: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Myanmar chapter can be downloaded through the button below. Tilleke & Gibbins also provided the Cambodia, Laos, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2024. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More
December 15, 2023
Employment law specialists from Tilleke & Gibbins’ office in Vientiane have provided the Laos chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This global guide, which covers 45 jurisdictions worldwide, examines the issue of workplace restructurings, particularly in relation to the needs of multinational companies. The Laos chapter was written by associates Naiyane Xaechao and Sayphin Singsouvong. The Q&A-style chapter focuses on key areas related to workplace restructuring, covering each of the following topics in detail: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Laos chapter can be downloaded through the button below. Tilleke & Gibbins also provided the Cambodia, Myanmar, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2024. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More
December 15, 2023
Employment law specialists from Tilleke & Gibbins’ office in Phnom Penh have provided the Cambodia chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This global guide, which covers 45 jurisdictions worldwide, examines the issue of workplace restructurings, particularly in relation to the needs of multinational companies. The Cambodia chapter was written by Jay Cohen, partner and director of Tilleke & Gibbins’ Phnom Penh office, and Chanvisal Lok, associate. The Q&A-style chapter focuses on key areas related to workplace restructuring, covering each of the following topics in detail: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Cambodia chapter can be downloaded through the button below. Tilleke & Gibbins also provided the Laos, Myanmar, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2024. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.
Read More