Employment contracts Vietnam

What should an employment contract in Vietnam include?

Below is a list of the most basic elements that should be contained in every employment contract in Vietnam:

• Personal information of the employer and the employee.
• A description of the job role, including the responsibilities, duties, and rights.
• Salary, or wage, and benefits the employee will receive.
• The days and hours of work.
• Termination policies, including notice periods and applicable severance pay.
• Confidentiality policies to protect the employer’s interest.

The employer and the employee must read, understand, and agree to the employment contract’s terms before providing their signatures. 

What types of employment contracts exist in Vietnam?

The following is a list of the most important employment contracts in Vietnam:

1. Employee contracts

Under employee contracts, there are two major types:

• Open-ended employment contracts: Open-ended or permanent employment contracts feature an indefinite duration of employment and can be terminated either by a mutual agreement or a resignation. Open-ended contracts must always define the most important employment elements, such as salaries, benefits, working hours, notice periods, and other essential terms.
• Fixed-term employment contracts: Fixed-term employment contracts in Vietnam can only be effective for up to 36 months. Within the contract, the parties should define the duration of employment, including start and end dates and other important employment terms like salaries and benefits. 

2. Apprenticeship employment contracts

Employers in Vietnam commonly use apprenticeship employment contracts to recruit interns for training purposes. Under this contract, apprentices are instructed and trained to be able to do specific operations for the employer. Apprenticeship contracts must outline the most important terms of the arrangement, including the apprentice’s tasks, responsibilities, compensation, termination and transition of the contract.

3. Independent contractor agreements

Companies that use the services of independent contractors and freelancers are using independent contractor agreements. Under these agreements, the independent contractor is responsible for delivering their services, while the company must pay remuneration. Independent contractors are not classified as regular employees, and therefore, employers are not responsible for submitting employment taxes and benefits.

How to hire employees in Vietnam? 

In order to hire employees from Vietnam, businesses must have a legal entity, a tax identification number, and a local bank account in the country. 

After hiring the first individual from Vietnam, employers are obligated to comply with local law regulations concerning minimum wages, benefits, working hours, and other important requirements.

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