Want to hire someone in Vietnam? Excellent. But, no matter where you’re from, labor laws in Vietnam are different from those in your home country (unless you’re from Vietnam, of course). Read on to learn about your options, plus as the easiest way to make remote hires in Vietnam.
If you want to successfully hire in
Vietnam
, you have two options:
Laws about hiring contractors are significantly more simple in
Vietnam
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Vietnam
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Vietnam
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Vietnam
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Vietnam
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Vietnam than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Vietnam.
Employees are entitled to a minimum of 12 days per year.
For every 5 years’ working for an employer, the annual leave increases by 1 day.
There is no specific regulation on the carryover policy in the law, however, it is interpreted by the authority that carryover is not allowed and unused leave must be paid in cash to the employee. In practice, many companies apply the carryover policy instead of making payment for the unused leave.
There are 10 official paid holidays.
Sick leave is covered by the Social Insurance Authority. Employees who join compulsory Social Insurance are entitled to sick leave of up to 30 days (in general) and to maximum of 60 days (in certain circumstances).
Sick allowances: 75% of the salary of the month preceding the employee’s leave.
There are a number of maternity-related leaves:
Prenatal Check-ups Leave: up to 5 occasions, 1 day for each occasion. If her fetus is unstable, the mother is entitled to 2 days off for each check-up. Maximum entitlement: 10 days.
Mothers are entitled to a 6-month maternity leave. In the event of twins, the leave is extended by one month for each infant from the second one.
Maternity allowance: 100% of the salary of the month preceding the employee’s leave paid by the Social Insurance Authority.
Paternity leave can be 5 to 14 days, depending on the specific case.
Paternity allowance: 100% of the salary of the month preceding the employee’s leave paid by the Social Insurance Authority.
Parents can take up to 20 days per year for parental leave until the child reaches the age of 3 and up to 15 days per year if the child is between the ages of 4 and 7.
Childcare leave allowances: 75% of the salary of the month preceding the employee’s leave paid by the Social Insurance Authority.
Work-Related Injury Leave – The employer covers all work-related injuries that an employee has suffered either directly or through insurances.
The employee should receive 100% of their average monthly earnings in the 12 months prior to the disability for 14 days if not hospitalized.
After 14 days they shall receive 66.7%. As of September 1, 2020, all work-related medical leave must be reported to the Ministry of Manpower.
Marriage Leave – 3 days
Children’s Marriage Leave – 1 day
Death of spouse, child, parents, parents-in-law – 3 days
Unilateral termination from the employee side only requires advanced notice.
Unilateral termination by an employer is restricted except for the case of expiry of the labor contract or if the employee reaches retirement age and applies for a pension. In most of the other cases, bilateral termination shall be applied.
The notice period is 3 working days for the seasonal contract, i.e. contract of less than 1 year; 30 days for definite labor contract, i.e. contract with for 1-3 years; or 45 days for an indefinite labor contract.
In a probation period, the employer must give the results 3 days before the end of the probation period.
Severance pay is half a month’s salary per year of service.
When termination of the contract is due to changes in the structure or technology, or due to economic reasons, job loss allowance shall be applied in this case with the rate of 1 month salary for each year of work and at least equal to 2 months salary.
A probation period is optional and a common practice in Vietnam.
Employers and employees can negotiate a probationary contract, which must include the rights and responsibilities of both parties during the probationary period. The probationary period cannot be extended and each position can only have one probationary period.
The length of the probationary period is based on the complexity and skill required to do the work and varies between 6 to 60 days. The wage for an employee during the probation period must be agreed upon by both sides but cannot be less than 85% of the wage for the official job.
Employees working under seasonal labor contracts are not subject to probation.
Normal working time must not exceed 48 hours per week.
Overtime can be implemented with the agreement of both the employer and employee.
The number of overtime hours cannot exceed 50% of the normal working hours in a day. Overtime cannot exceed 30 hours per month and a total of 200 hours per year, except for some cases stipulated by the Government in which overtime shall not exceed 300 hours per year.
The Overtime pay rate is as follows:
normal weekdays – 150%
weekend – 200%
public holidays – 300%
Overtime during a night shift will be according to the above classifications with the following rates respectively, 200% (or 210%), 270% and 390%.
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