VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
• collective bargaining, allowing employees to nego - tiate with employers for better terms and condi - tions (optional, not mandatory); • labour discipline and responsibility, addressing misconduct and performance issues; • labour dispute settlement, providing mechanisms for resolving disagreements between employers and employees; and • other employment-related matters, covering vari - ous aspects of the employment relationship. Besides the Labour Code, other important regulations for foreign investors include: • Decree No 152/2020/ND-CP (as amended), pro - viding specific rules for managing and recruiting foreign workers in Vietnam; • Decree No 219/2025/ND-CP, regulating the issu - ance, re-issuance, extension and withdrawal of work permits for foreign workers in Vietnam; • Law on Social Insurance No 41/2024/QH15, defin - ing social insurance benefits, employee/employer rights and responsibilities, and related policies; • Law on Medical Insurance No 25/2008/QH12 (as amended), outlining medical insurance benefits, payment obligations, coverage scope and other related matters; • Law on Occupational Safety and Hygiene No 84/2015/QH13, setting the primary rules and restrictions to ensure workplace safety and health; • Law No 47/2014/QH13 on Entry, Exit, Transit and Residence of Foreigners in Vietnam (as amended), governing the issuance of visas and temporary residence cards, and immigration procedures for foreign nationals; and • Law on Trade Union No 50/2024/QH15 (as amend - ed), defining the right to establish, participate in and operate trade unions, member rights and obligations, and other trade union management matters. Collective Bargaining and Trade Unions While not mandatory, the Labour Code encourages voluntary, co-operative collective bargaining. If one party (employer or employees via their representa - tives) proposes it, the other must respond, or risk vio - lating the principle of goodwill. Successful negotia - tions lead to a collective labour agreement. Similarly,
employees have the right to establish grassroot-level trade unions, but it is not obligatory. 10.2 Employee Compensation The Labour Code primarily recognises cash wages as the standard form of employee compensation. These wages can be paid periodically (monthly, bi-weekly) or based on productivity. Importantly, they cannot fall below the regional minimum wage, which varies depending on the location, as follows: • Region I (major cities): VND4,960,000/month (approximately USD188) or VND23,800/hour (approximately USD0.9); • Region II: VND4,410,000/month (approximately USD167) or VND21,200/hour (approximately USD0.8); • Region III: VND3,860,000/month (approximately USD146) or VND18,600/hour (approximately USD0.7); and • Region IV: VND3,450,000/month (approximately USD131) or VND16,600/hour (approximately USD0.6). These minimum wages are subject to periodic adjust - ments by the government based on factors such as the cost of living and economic conditions. Current - ly, the government is proposing an average 7.25% increase to existing minimum wages, starting from 1 January 2026. Other Forms of Compensation While the Labour Code focuses on cash wages, Viet - nam allows for other forms of employee compensa - tion governed by different laws. These include: • Employee Stock Ownership Plans (ESOPs), offer - ing employees ownership shares in the company; and • equity compensation, providing employees with stock options or shares as part of their compensa - tion package. In practice, these benefits are often treated as supple - mentary benefits rather than core salary components and are typically at the employer’s discretion.
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