Indochina time GMT+7 

Undoubtedly, payroll is a critical process for any organization. The pay cycle in Vietnam refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Frequency cycle in Vietnam is Monthly. 

Vietnam has 13th pay and it is paid on Lunar New Year or the end of the year. 

On July 1, 2024, Vietnam implemented an increase in both monthly and hourly minimum wages across the country.

• Minimum Wage Increase: The monthly minimum wage now ranges from 3.45 million dong to 4.96 million dong, up from the previous range of 3.25 million dong to 4.68 million dong. Similarly, hourly minimum wages have been raised from 15,600 dong to 22,500 dong, now ranging from 16,600 dong to 23,800 dong.

• Regional Variation: The decree introduces regional classifications, dividing the country into four regions with distinct minimum wage rates. This approach accounts for varying cost-of-living expenses across different areas of Vietnam. Region 4, covering unclassified areas, has the lowest minimum wage.
• Impact on Unemployment Taxes: The unemployment insurance contribution base is now calculated using 20 times the applicable monthly minimum wage, ensuring the tax reflects current wage levels.
• Regional Classification and Rates:

1. Region 1: Monthly minimum wage of 4.96 million dong (highest).
2. Region 2: Monthly minimum wage of 4.5 million dong.
3. Region 3: Monthly minimum wage of 4.32 million dong.
4. Region 4: Monthly minimum wage of 3.45 million dong (lowest).

Overtime work is the duration of work performed beyond normal working hours, i.e., 8 hours per day and 48 hours per week as indicated under the law, collective bargaining agreement, or internal labor regulations of an employer. 

Overtime can be performed only when an employee agrees to work overtime. 

The duration of overtime hours of an employee shall not exceed 50 % of the number of working hours in 1 day. In the case of weekly work, the total normal working hours plus overtime working hours shall not exceed 12 hours in 1 day. 

The maximum number of overtime working hours is increased to 60 hours per month, if there is substantial business demand and the employer has obtained the employees’ consent. 

The yearly overtime limit shall not exceed 20 hours in regular cases. 

An employee who performs overtime work is entitled to a premium of at least 150 % of the actual salary.   

Data retention periods depend on the type of data being stored. Personal data must be stored in Vietnam for as long as the service provider continues to provide the covered services, while data created by users and data regarding the relationships of users must be stored for a period of at least 36 months. 

Hiring and recruitment in Vietnam includes

• Working with a hiring or recruiting agency 
• Applicant tracking software  
• Job advertisements and online postings  
• Background checks  
• Third-party resume assistance for visa confirmation  
• Traveling expenses to facilitate interviews  
• New hire training and any necessary equipment  

Onboarding details for a local employee are as follows:    

• Name  
• Date OF Birth  
• Nationality  
• Occupation  
• Position  
• Passport number  
• Address  

Onboarding details for a foreign employee are as follows: 

• Name   
• Date of Birth  
• Nationality  
• Occupation  
• Phone number  
• Identity Card  
• Passport Number  
• Permanent Address  

• It does not exceed 60 days for posts that require professional and technical qualifications of collegial or higher level.  

• It does not exceed 30 days for posts that require professional and technical qualifications of intermediate vocational level, professional secondary level, or for technical workers and skilled employees.  

There are 11 public holidays.

• January 1: New Year’s Day
• January 2: New Year's Day
• January 21 to January 27: Tet holiday
• April 24: Hung Kings Commemoration Day
• April 30: Reunification Day
• May 1: Labor Day
• May 1: Hung Kings Commemoration Day
• May 2: Reunification Day
• September 2: National Day
• September 4: National Day Holiday

Sick leave is paid by the Social Insurance Authority.

The social insurance fund pays the sick pay at 75.00% of the salary rate, based on the salary received in the month preceding the sickness absence. All employees must provide a medical certificate within 48 hours of the first day of sickness.  

All employees are entitled to up to 30 days of paid sick leave per year, increasing to 60 days under exceptional circumstances.  

A pregnant employee is entitled to 6 months of maternity leave, potentially increasing to 7 months for complicated/multiple births. The Social Insurance Authority pays the maternity payment at a rate of 100.00% of the salary received in the month preceding the start of the maternity absence.   

During the period of nursing, if the mother has to care for a child under 12 months, then she is entitled to a fully paid break of 60 minutes every day during her working hours.  

However, Decree 145 states that where a female employee does not wish to take these breaks and the employer agrees for her to continue working, in that case, the employee must be paid an additional salary according to the work that the employee has carried out during the time of the break.  

New fathers are entitled to 5 and 14 days of paid paternity leave. The Social Insurance Authority pays the leave at a rate of 100.00% of the salary received in the month preceding the start of the paternity absence.  

Depending on the contract, employees can take additional leave once the employer approves it.  

• Bereavement Leave: Employees are entitled to 3 days of paid leave for the death of a family member.   
• Marriage Leave: Employees are entitled to up to 3 days in case of marriage and one day for a child’s marriage.  

The termination process is standard in Vietnam and is based on the Labour Law requirements unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, etc.) 

Notice of termination must be in writing and sent to the relevant governmental authorities. 

Upon termination of the labor contract, all employees are entitled to: 

Receive the rest of the salary for the days worked in that month. 

An allowance when they leave the job due to termination of labor contract because of changes in structure, technology or economic reasons, division, separation, consolidation, or merger; sale, lease, conversion of types; transfer of ownership, right to use property and have worked regularly for the employer for one year or more. 

Any untaken leave (pro-rata) entitled. 

The employer is also responsible for paying the rest of the salary within 14 working days from the date of termination of the labor contract (Article 48 of the Labour Code 2019). This period may be extended, but it shall not exceed 30 days. 

The employer must provide copies of documents relevant to the process of the employee’s job if the employee so requests and pay the costs of copying and sending such documents, together with notice of terminations sent to the relevant governmental authorities. 

In cases of unilateral termination of employment by an employer, an employer must provide advance notice to the employee. This must be within the statutory time limit as employment law in Vietnam.   

Employees who resign must give advance notice in writing to their employers within the minimum statutory time limit. Employers must give at least 120 days' notice for labor contracts with an indefinite term or for a fixed-term contract of 12 months or more. For contracts of less than 12 months, employers must give notice of at least one-quarter of the term of the contract. 

Employees who have worked at the company for more than 12 months are entitled to severance payment. The severance payment consists of half a month’s salary for each year worked at the company. Here, salary is considered the average monthly payment the employee received over the past six months, including all payments outside of base wage. The employer needs to make the severance payment within seven days of the termination. 

To work in Vietnam, a foreigner must have a valid passport with at least six months validity remaining. Additionally, foreign workers must apply for a Vietnamese business visa, which requires a written approval letter for a visa upon arrival in Vietnam. Visas can be obtained from a Vietnamese embassy or consulate prior to traveling to Vietnam. To obtain a written approval letter to enter, a travel agency must be contacted prior to departure, or the letter can be acquired once an employee has arrived in Vietnam if the employee is already in possession of a tourist visa. 

For business visas, options for three-month and six-month multiple/single entry visas can be applied for, but employees must obtain an approval letter. Additionally, employees are required to obtain a sponsorship or invitation letter from their business partner in Vietnam. Business visas for one year can be approved with special permission. 

*A pre-employment background check in Vietnam should take between three and ten days. Background checks would take longer because a specific company may want an in-depth look at employee history. 

*Legally required information that an employer must collect before conducting an employee background check in Vietnam includes 

Personal information that includes full name, gender, and place of residence 

Educational background 

Vocational skills 

Health condition 

Employment history 

Criminal record 

Any other information provided by the applicant during the screening process