Employer's Guide To Employee Benefits In Vietnam

Vietnam boasts a workforce rich in skills and education, contributing to various industries. To attract top talents here, employers need to offer this mix of statutory benefits, as outlined in the Labour Code 2019, along with additional voluntary perks that enhance their employees work experience. 

Offering a well-balanced benefits and compensation package that aligns with both employee needs and company budgets is crucial for retaining top talent, especially in a rapidly growing economy like Vietnam. This comprehensive guide of Aniday will lead you through the types of employee benefits offered in Vietnam. 

What Is The Employment Regulation In Vietnam?

The employment legislation in Vietnam is the Labour Code 2019 (Labour Code), implemented on 1 January 2021. This law covers many employment laws and regulations in several areas, as listed below:

• Right to work
• Maximum working hours
• Minimum wages
• Minimum working ages

The law of the Labour Code includes three main types of labor contracts. They are listed below:

• Indefinite-term labor contracts.
• Fixed-term labor contract (consisting of a duration of 12 to 36 months).
• Specific or seasonal job labor contract (consisting of a duration of less than 12 months).

Vietnam has partnered a membership with the World Trade Organization (WTO) and the International Labour Organization (ILO) to protect and provide employees with a fair workplace.

Who Is Entitled To Employee Benefits In Vietnam?

In Vietnam, full-time and short-term contract employees are entitled to enjoy statutory benefits. Independent contractors under specific conditions are also eligible for statutory benefits.

What Are The Employee Workplace Benefits In Vietnam?

Employee benefits in Vietnam are classified into statutory and voluntary benefits. Let's Aniday guide you through the details below!

What Are Statutory Employee Benefits In Vietnam?

Minimum Wage

The minimum wage in Vietnam varies from region to region. For example, in Hanoi and Ho Chi Minh City, it is 4.68 million VND per month.

The minimum wage differs depending on the industry, sector, and other factors. Hence, employers should be up to date with these conditions and adhere to the rules and regulations to avoid any fines or penalties.

Overtime

In Vietnam, employees can work overtime, and these terms can be mentioned in the employment contract. Certain employees are excluded from requesting overtime, such as pregnant women in their seventh month and parents with children under one-year-old.

According to Vietnam laws, overtime hours cannot exceed 4 hours per day, 40 hours per month, or 200 hours per year. The following are overtime pay regulations in Vietnam:

• Overtime pay in the daytime during weekdays is paid around 150% of the base wage rate.
• Overtime pay on the weekends is around 200% of the base salary.
• In public holidays or paid leave, overtime pay is 300% of the base wage.
• Overtime during the night adds up to an extra 30%, depending on whether it is a weekday, weekend, or holiday.

Working Hours 

The working hours in Vietnam are eight hours per day, which is 48 hours weekly.

Paid Leave

Vietnam offers paid leaves based on specific conditions. Here are they:

• Employees are entitled to obtain a minimum of 12 paid leaves per year (excluding public holidays).
• Employees who work for the same employer are entitled to additional paid leave once every five years.
• Employees who engage in hazardous work or toxic environments obtain an additional 2 to 4 days of paid leave per year.

Maternity Leave

Vietnam's Labor Code also outlines about maternity leaves. Here are the conditions for maternity leaves:

• New mothers on six months of maternity leave are entitled to 100% pay.
• These payments can be obtained in a lump sum allowance for two months, which is equivalent to two months' average salary.
• If there are multiple births, the mother can obtain 30 days of additional leave for each child.

Paternity Leave

New fathers can obtain 5 to 14 days of paid paternity leave. However, it differs based on the birth, miscarriage, and the number of children.

Parental Leave

Vietnam employees can obtain parental leave based on their child's age. The parental leave may range between 15 to 20 days per year.

Social Security Contributions

Social security contributions help to secure the future of the employee. Thus, these funds are divided among social insurance, health, and unemployment. Here's how the social security fund is contributed:

• Employer contributions from the employee's salary are as follows: 

  • 17.5% to social insurance

  • 3% to health insurance

  • 1% to unemployment

• Employee contributions from their salary are as follows: 

  • 8% to social insurance

  • 1.5% to health insurance

  • 1% to unemployment

Notice Of Termination

In Vietnam, there are regulations related to the notice period for termination. Here are the conditions related to its termination for employer and employee:

• The 30-day notice period for fixed-term contracts.
• The 45-day notice period for indefinite contracts.
• The 3-day notice period for a fixed-term employment contract with a duration of less than 12 months.
• If the employee termination is based on structural changes in the business, the employee should pay a complete month's salary.
• Employers cannot terminate the contract of pregnant employees or employees on maternity leave.
• If an employee has been working for 12 or more months, they are entitled to severance pay of 2 weeks' salary per year of employment.

Health Insurance

In Vietnam, employers are accountable for providing health insurance for employees on indefinite-term contracts or contracts lasting longer than three months. Employees should also have regular health checkups.

What Are The Voluntary Employee Benefits?

Apart from statutory employee benefits, employers can provide voluntary employee benefits. These benefits help to enhance employee loyalty and retain and attract a pool of talent. Here are a couple of voluntary employee benefits provided by employers:

• Flexible work hours
• Gym or club memberships
• Healthcare insurance
• Holiday bonus
• Housing allowances
• Life insurance
• School fees allowances
• Stipends for housing and commuting
• Transportation allowances

If you’re looking to hire employees in Vietnam, Aniday’s Employer of Record (EOR) services can help you navigate and adhere to all compliance requirements of employee benefits. This allows you to focus on achieving your business goals with confidence.

Final Thoughts

In conclusion, Vietnam is a fantastic workplace for employees as it provides many employee benefits. Statutory benefits are covered in employee agreements, while voluntary benefits are additionally offered.

If you need help with Vietnam employment laws, benefits, or Employer of Record (EOR) services, feel free to contact Aniday. We're here to assist you, and you can reach out to us directly or through our headhunting.

We hope this guide helped you understand the employee benefits in Vietnam!