Vietnam employment contracts and labour law basics

What employment contracts does Vietnamese labour law allow?

Vietnamese labour law recognises only two employment-contract types: indefinite-term and fixed-term. A fixed-term contract cannot exceed 36 months, may be renewed only once, and becomes indefinite-term if the employee keeps working for 30 days after it expires without a new contract being signed (Labour Code 2019, Article 20).1

The practical effect is that a foreign employer cannot keep a worker on rolling short contracts indefinitely. After one fixed term and one renewal, any continued employment must be on an indefinite-term contract — which carries the full termination protections. A handful of narrow exceptions exist (elderly employees, enterprise-union officers, and foreign workers whose contract is tied to the duration of their work permit), so a fixed term that matches a foreign employee’s work-permit validity is treated differently from an ordinary rolling term. Whatever the term, the contract salary must be at or above the applicable regional minimum wage.

What must a Vietnamese employment contract include?

A Vietnamese employment contract must set out the terms the Labour Code requires: the employer and the person signing; the employee’s identity; the job and workplace; the contract term; the wage, its form, payment date and any allowances; pay-rise arrangements; working and rest time; personal protective equipment; social, health and unemployment insurance; and training (Labour Code 2019, Article 21).1

What forms can an employment contract take?

The Labour Code recognises three forms: a written contract in two copies, an electronic contract concluded as a data message — equal in validity to a written one — and, only for a term under one month, an oral contract (Labour Code 2019, Article 14).1 From 1 July 2026 an electronic labour contract must be concluded through a national Electronic Labour Contract Platform operated by the Ministry of Home Affairs; using an electronic contract stays optional and paper contracts remain valid (Decree 337/2025/ND-CP, in force 1 January 2026).2

The platform mechanics, the 24-hour upload and contract-ID step, and the exact optional-use-but-compulsory-on-platform rule are set out in electronic labour contracts in Vietnam.

When is an arrangement an employment contract?

Under the Labour Code it is substance, not the document’s title, that decides. Any arrangement involving paid work, wages and one party directing or supervising the other is treated as an employment relationship — regardless of what the contract is called (Article 13).1 Calling someone a “consultant” or “contractor” does not take the relationship outside the Labour Code.

This matters because a mislabelled contractor can be reclassified as an employee from the start of the engagement, exposing the hirer to back-dated social insurance, back personal income tax, interest and a tiered administrative fine. The three-part test, the reclassification consequences and the corrected penalty figures are set out in full in the contractor-versus-employee comparison. The short version: if you direct the work day to day and pay a regular wage for it, Vietnamese law sees an employment contract, with all the obligations below attached.

How does probation work?

Probation in Vietnam is one trial per job, its maximum length set by the role, and probation pay must be at least 85% of the full job salary; no probation is allowed at all for a contract shorter than one month (Labour Code 2019, Articles 24–26).1 The role-based maximums — 180 days for managers down to 6 working days for ordinary roles — and the 85% pay floor are set out in full in probation periods in Vietnam.

What are the working-hour, overtime and pay limits?

Standard working time is capped at 8 hours a day and 48 hours a week, with a 40-hour week encouraged. Overtime needs the employee’s agreement and is limited to 40 hours a month and 200 hours a year — 300 only in listed sectors — and is paid at a premium, with a further loading for night work (Labour Code 2019, Articles 98 and 105–107).1 The full caps, the listed-sector ceiling, the 150/200/300% overtime rates and the night-work premium are in working hours and overtime in Vietnam.

Internal labour regulations and discipline

An employer with 10 or more employees must have written internal labour regulations and register them with the provincial labour authority (Labour Code 2019, Articles 118–119).1 Labour discipline is in turn a closed list: only a reprimand, deferment of a pay rise for up to six months, demotion and dismissal are permitted, and fining an employee or docking wages as punishment is not allowed (Articles 124–125).

The registration mechanics and what the regulations must cover are in internal labour regulations in Vietnam; the four permitted measures, the no-fines rule and the statutory grounds for disciplinary dismissal are in labour discipline in Vietnam.

Are confidentiality and non-compete clauses enforceable in Vietnam?

The Labour Code expressly allows a written agreement to protect an employer’s business and technological secrets, including the scope, duration and compensation for breach (Article 21.2).1 Post-employment non-competes are different: no statute directly makes them enforceable and they sit in tension with the constitutional right to work, though a 2023 case precedent — Precedent No. 69/2023/AL, effective 1 November 2023 — lets a commercial arbitral tribunal hear them as agreements independent of the labour contract.3

Whether a given clause holds is fact-specific, and reasonableness limits apply to its scope and duration. The precedent, the drafting approach and the practical position for foreign employers are covered in non-compete agreements in Vietnam; who owns the work product an employee creates is in IP ownership of employee work in Vietnam.

Must a Vietnamese employment contract be in Vietnamese?

No Labour Code article requires the employment contract itself to be in Vietnamese. In practice, contracts with local staff are executed in Vietnamese or bilingually with the Vietnamese version prevailing, and anything filed with the authorities — internal labour regulations, work-permit dossiers and other submissions — must be in Vietnamese or officially translated.1

For a foreign hire, a bilingual contract is the usual choice: the employee can read their terms, and the Vietnamese text governs any dispute and satisfies the filing rules. What the law does not do is void an English-language contract simply for being in English — a point some guides overstate.

How must wages be paid, and what goes on a payslip?

Wages must be paid in full, on time and in Vietnamese dong; a delay of 15 days or more obliges the employer to pay compensation interest (Labour Code 2019, Articles 94–97). Each pay period the employer must issue a payslip itemising pay, overtime, night-shift pay and every deduction — social, health and unemployment insurance and personal income tax (Article 95).1

Those deductions are where labour law meets payroll. The employer withholds the employee’s 10.5% insurance share and personal income tax and remits them, on top of its own statutory on-costs — the full breakdown, including the salary-payment and payslip rules, is on Vietnam payroll and employer costs and how personal income tax is withheld. The same contract rules shape what happens at the other end of the relationship: notice periods and severance are covered in terminating employees in Vietnam, and paid leave and statutory benefits in employee benefits in Vietnam. A plain-English definition of each term here — fixed-term contract, probation, notice period and severance — is in the plain-English HR and employment glossary.

An employer of record — the service EOR Vietnam provides — carries all of this for you: it is the legal employer that issues the registered contract, runs payroll and payslips, withholds tax and insurance, and keeps the internal regulations and filings current — see what an employer of record does, how an EOR is structured lawfully in Vietnam, or the full set of Vietnam employer guides.