Vietnam’s 2024 Labor Law

Vietnam’s 2024 Labor Law: As Vietnam’s economy continues to grow, understanding the latest updates to labor laws is essential for both employees and employers. The 2024 version of Vietnam’s Labor Law introduces significant changes aimed at better protecting workers’ rights and ensuring a fairer relationship between labor and management. This guide will break down the critical elements of the new regulations, helping you navigate the complexities of signing an employment contract in Vietnam.

Vietnam’s 2024 Labor Law:

1. Understanding the Employment Contract

An employment contract is a legally binding agreement between an employer and an employee, specifying the terms and conditions of employment. According to the 2024 Labor Law, the contract must clearly state:

• Job title and description
• Salary, allowances, and bonuses
• Working hours and breaks
• Duration of the contract (fixed-term or indefinite)
• Conditions for termination and resignation
• Health and social insurance provisions

Ensuring that these elements are correctly outlined in your contract is crucial for preventing future disputes.

2. Types of Employment Contracts in Vietnam

Under the 2024 law, there are two main types of employment contracts:

• Indefinite-term contracts: These contracts have no fixed duration and continue until either party decides to terminate the agreement.
• Fixed-term contracts: These contracts have a specific duration, usually from 12 to 36 months. They must include an expiration date and can only be renewed once before converting to an indefinite-term contract.

Choosing the right type of contract based on your employment needs can help you better plan your career or business operations.

3. Probation Period Regulations

The probation period is a critical aspect of employment, allowing employers to assess the employee’s skills and fit for the role. The 2024 Labor Law specifies:

• Maximum probation period: For managerial positions, the probation can last up to 180 days. For other positions, the maximum is 60 days.
• Probation salary: The law requires the probationary salary to be at least 85% of the agreed-upon wage for the job.

It is essential to have a clear agreement on the probation period and salary in the contract to avoid misunderstandings.

4. Working Hours and Overtime

The 2024 law introduces some changes to working hours and overtime regulations. Key points include:

• Normal working hours: Employees are expected to work no more than 8 hours per day or 48 hours per week.
• Overtime: Employers can request employees to work overtime, but it should not exceed 200 hours per year, except in special cases where the limit can be extended to 300 hours per year. Employees working overtime are entitled to at least 150% of their normal wage for extra hours on weekdays, 200% on weekends, and 300% on public holidays.

Understanding your rights regarding working hours and overtime is vital to ensure that you are fairly compensated for your time.

5. Termination and Resignation

The 2024 Labor Law introduces new regulations regarding termination and resignation. These changes are designed to provide greater clarity and fairness in employment relations. Key aspects include:

• Employee resignation: Employees can resign by giving 30 days’ notice for fixed-term contracts and 45 days for indefinite-term contracts. No reason is required for resignation.
• Employer-initiated termination: Employers can terminate contracts for specific reasons, such as repeated underperformance or gross misconduct, but must provide prior notice and severance pay based on the length of employment.

Both parties need to follow these regulations carefully to avoid legal disputes.

6. Social Insurance and Health Insurance

One of the most significant areas of concern for employees is their access to social and health insurance. The 2024 Labor Law emphasizes that employers must register their employees for:

• Social insurance: Covering sickness, maternity, workplace accidents, retirement, and unemployment. Employers are responsible for contributing 17.5% of an employee’s salary, while employees contribute 8%.
• Health insurance: Employers contribute 3% of an employee’s salary toward health insurance, while employees contribute 1.5%.

Ensuring your employer provides these benefits is essential for your long-term well-being and security.

7. Rights of Employees

Vietnam’s Labor Law aims to protect workers’ rights and improve their working conditions. Under the 2024 law, employees are entitled to:

• Paid annual leave: Employees receive at least 12 days of paid annual leave per year, with additional days added based on seniority.
• Maternity and paternity leave: Female employees are entitled to six months of maternity leave. Male employees receive five to fourteen days of paternity leave, depending on the method of delivery.
• Equal pay: Employers are prohibited from discriminating based on gender, race, or religion. Equal pay must be given for work of equal value.

These rights are in place to ensure fair treatment and a balanced work-life environment for employees.

8. Employer Responsibilities

Employers are not only responsible for ensuring compliance with the labor law but must also foster a healthy and safe work environment. Key responsibilities include:

• Health and safety: Employers must implement safety measures to prevent workplace accidents and ensure the well-being of employees.
• Workplace discrimination and harassment: Employers must establish policies to prevent and address workplace discrimination and harassment. Violation of these policies can result in penalties and damages.

By creating a positive and safe work environment, employers can boost employee morale and productivity.

9. Consequences of Violating the Labor Law

Both employees and employers need to adhere to the Labor Law. Violations can result in penalties, including:

• Fines: Monetary fines for employers not complying with labor regulations, such as failure to register employees for social insurance.
• Compensation: Employers may be required to compensate employees for unlawful termination or other violations of the contract.

Understanding the legal consequences of non-compliance is crucial for avoiding disputes and maintaining a healthy working relationship.

Conclusion

Vietnam’s 2024 Labor Law provides essential guidelines for both employers and employees. Whether you’re signing a new employment contract or are currently employed, understanding your rights and responsibilities is key to ensuring a positive and compliant work environment. Stay informed and make sure all agreements are clear, fair, and in line with the latest regulations to protect your interests.