How to hire in Vietnam through an EOR

Vietnam caps fixed-term contracts at 36 months and only allows two consecutive ones. After that, the next contract has to be indefinite. For most ongoing roles, indefinite-term contracts are the simpler path from the start.

If the role is ongoing, go indefinite from the start. It's cleaner, and you won't get caught out by the auto-conversion rules.

Required contract elements

Contracts must be written, with two signed copies: one for you, one for the employee. Electronic contracts carry the same legal weight and will be mandatory in some forms from July 2026. Verbal agreements only hold up for jobs under one month.

Every contract needs to cover: job scope and location, working hours and breaks, wages and payment terms, contract duration and type, occupational safety details, and social, health, and unemployment insurance. Add employer and employee details, promotion policies, and PPE requirements where relevant. Don't assume anything is implied. If it's not written down, it's open to dispute.

Probation is capped at 60 days for most roles, 180 days for executive positions. You have to pay at least 85% of the formal salary during this period. If things aren't working out, you can end probation with 3 days' notice. The employee can leave at any point without notice. You don't need a separate probation contract; it can sit within the main one.

Employee vs contractor risks

Vietnam applies a control test: if you're dictating hours, tools, or how the work gets done, courts are likely to treat that person as an employee. Misclassification carries real consequences, including fines up to VND 100 million (~$4,000) per violation, back social insurance contributions at the 21.5% employer rate, unpaid taxes, and overtime. Employees can also sue for reclassification and claim full benefits retroactively. There are cases where someone hired as a "freelancer" has walked away with years of severance.

Non-competes are enforceable, but only within reason. That means up to 1 year, tied to genuine trade secrets, and with compensation paid during the restriction period. Courts will throw out anything too broad. For IP, assignment needs to be explicit in the contract; otherwise the employee owns what they create. Get it in writing before work starts.

Use contractor arrangements only when there's real independence involved, like a one-off project with no day-to-day oversight. For anything ongoing, hire as an employee. An EOR can draft contracts that hold up locally and flag classification issues before they become problems.

Vietnam requires 12 days of paid annual leave after a full year, with increases for tenure and working conditions. In practice, most competitive employers offer 18-20 days or more to attract and keep good people.

Time off

Employees get 12 days of paid annual leave after 12 months in normal conditions. That rises to 14 days for workers under 18, and 16 days for hazardous roles. For every 5 years with your company, they earn 1 additional day.

If someone works less than 12 months, leave accrues proportionally: divide the full entitlement by 12, then multiply by months worked. You set the schedule after consulting them and must give advance notice. They can split leave across the year or bank up to 3 years' worth. If they leave the company, unused days are paid out at 100% of salary.

Public holidays add 11 paid days per year:

All leave types

Vietnamese law sets clear rules on paid leave. You cover full salary unless noted below, and job protection applies across all leave types. You can't terminate someone for taking legally entitled leave.

Mandatory benefits

You're required to enroll workers in Vietnam's social insurance system from their first day. It covers pension, health, and work injury. Contributions total 32.5% of salary, capped at 20x the minimum wage:

• Employer's share: 21.5% (14% pension, 3% health, 0.5% unemployment, 4% injury)
• Employee's share: 11% (8% pension, 1.5% health, 1% unemployment)

There are no unusual mandates like meal vouchers or transport allowances. That said, the 13th-month bonus is effectively standard. It's tied to annual leave pay rules under Vietnamese law, so courts treat it as an expected obligation rather than a discretionary perk.

What people actually expect

Legal minimums won't get you far when hiring in Hanoi or Ho Chi Minh City. Skilled workers in tech or finance typically expect 18-22 days of annual leave. If you offer less, you're likely losing candidates to multinationals who offer more.

Private health insurance is close to a baseline expectation for white-collar roles. Around 70% of those positions include it, covering better hospitals, dental, and checkups. A 13th or 14th month bonus, tied to performance, is also common. Tech workers often expect a remote work stipend of 1-2 million VND per month to cover internet and home office costs.

Family-friendly policies matter too. Topping up maternity pay beyond what social insurance covers, offering flexible hours, or allowing 1-2 WFH days per week can make a real difference. If you're hiring senior people, they'll usually expect to match or beat their current package. EOR providers can give you salary data to benchmark against.

Stick to minimums and hiring tends to take longer. Offer a bit more and you'll find it easier to attract the people you actually want.

Vietnam caps the standard workweek at 48 hours. That's stricter than many countries, and tight overtime limits make extra hours both expensive and uncommon.

Most employees work 8 hours a day, 6 days a week. That's the legal maximum and the typical schedule. You can arrange shifts or compressed weeks, as long as you stay under 48 hours weekly and spell out the arrangement in contracts or internal rules.

Overtime requires employee agreement and can't push the daily total past 12 hours. The monthly cap is 40 hours, and the yearly cap is 200 hours, or 300 in approved sectors like export manufacturing. Track hours carefully. Fines for excess hours or poor records can be significant.

Employees working more than 6 hours a day are entitled to a 30-minute meal break. Night shifts add another 15 minutes. You're also required to provide 12 consecutive hours of rest between shifts and one full day off each week.

Compressed weeks are fine as long as the totals stay within the legal limits.

Part-time work is legal, with pay and benefits calculated proportionally. Define hours clearly in contracts. There's no minimum hour threshold, but keeping daily hours under 8 means full-time rules don't apply.

Flexible hours are possible through mutual agreement, but weekly caps still apply. There's no legal right to request remote or hybrid work in Vietnam. It's common in office environments, particularly since the pandemic, but you set the terms in the contract. No law requires you to offer it.

Firing an employee in Vietnam without solid evidence and a clear process can be costly. Wrongful termination often leads to court-ordered reinstatement plus damages of up to six months' salary, and Vietnam's labor law strongly favors workers.

You can only terminate for specific legal reasons: repeated poor performance after warnings, serious misconduct like theft or violence, long-term illness over 12 months, or business restructuring. Mutual agreement or contract expiry also works. But if you're acting unilaterally, you'll need documented proof, written warnings, disciplinary meetings, and formal notice. Certain groups are protected regardless of cause, including pregnant employees, those on maternity or sick leave, union representatives, and anyone on annual leave. Terminating them is unlawful even if you have grounds.

Most disputes don't come from bad reasons. They come from skipped steps. Courts will side with the employee if your documentation or notice is missing. Where possible, aim for mutual agreement. It's usually cleaner and less expensive than a dispute.

Notice periods

Notice depends on contract type and how long the employee has been with you. You'll generally give more notice than the employee does, except during probation, where it's three days either way. Here's how it breaks down:

For serious misconduct, you can end employment immediately without notice, as long as you've followed disciplinary rules. Always issue a written decision that includes your reasons and the effective date.

Severance

Severance is mandatory for employees with 12 or more months of service if you terminate lawfully, except in cases of misconduct or voluntary resignation. It's not owed on contract expiry alone unless the employee qualifies under job loss rules. The calculation is 1/2 month's salary per year worked, based on the average salary over the last six months. You need to pay within seven days of termination.

For disciplinary dismissal, no severance is owed. Mutual agreements often include additional ex gratia payments to keep things amicable, but those aren't required. There's no statutory cap, though courts can award more if a dispute goes that far.

Employees with more than 12 months of service also need to be paid out for any unused annual leave. If they're covered by unemployment insurance, that may offset part of the allowance.

Work permits and visas

You can hire foreign nationals through an EOR in Vietnam. The EOR acts as the legal employer and handles sponsorship, applying for work permits and visas on your behalf. Only entities with a local presence can sponsor, so using an EOR lets you bring on international hires without setting up your own entity.

Work permits for skilled roles are valid for up to three years and are renewable, but they're tied to the specific job and sponsor. Processing typically takes 5-10 working days once documents are in order, with visa stamping at entry adding a few more days. Business visas (DN type) work for shorter stays of up to 12 months. There's no digital nomad visa in Vietnam yet.

Foreign employees need a work permit before they start, with some exceptions for intra-company transfers or certain experts. EORs handle renewals and ongoing compliance, but you should expect one to two months for the full setup of a new hire. When someone leaves, their permit becomes invalid, so coordinate the offboarding carefully to avoid overstay issues.

Vietnam's employment law has tightened considerably since 2026 began, and foreign employers often underestimate what's sitting beneath the surface of a straightforward hiring decision. The biggest surprise for most: misclassifying workers as contractors instead of employees can trigger retroactive social insurance contributions and penalties, and authorities are now actively looking for this.

Worker classification and contractor risk

Vietnam's labor authorities have made contractor misclassification a priority enforcement area. From 2026 onward, they're increasing scrutiny on fixed-term vs. indefinite-term contracts, repeated renewal of fixed-term contracts, and misclassification of employees as "consultants" or "service providers." There's no bright-line test published by regulators. Instead, authorities look at the substance of the relationship: control, integration into the business, exclusivity, and whether the person performs core business functions.

If a worker gets reclassified, you're liable for back contributions and penalties, and that compounds quickly. Many foreign companies avoid this risk entirely by hiring through an Employer of Record (EOR) rather than setting up a local entity. An EOR becomes the legal employer, handles all compliance, and absorbs the classification risk.

Digital labor contracts and compliance reporting

Starting 1 July 2026, all electronic employment contracts must be signed and stored via an official government digital system. This isn't optional. Contracts now require digital signatures and anti-fraud authentication to properly identify both employer and employee.

Alongside this, Decree 318/2025 expanded labor reporting obligations. You'll now need to submit more detailed workforce data, including employee status, contract type, and labor-force variability. That means your payroll and HR systems need to feed into compliance reporting, not just internal records.

Unions and collective bargaining agreements

The Labor Code explicitly recognizes trade unions and collective labor agreements as part of the employment framework. CBAs can supplement or override certain statutory rights where applicable. If your sector or region has a binding CBA, it applies to all employers in that sector, whether their workers are union members or not.

You'll want to know whether your industry or location has a sectoral or enterprise-level CBA in place before you finalize compensation or benefits structures. Don't assume it doesn't apply to you.

Data protection and employee privacy

Vietnam doesn't have a GDPR-equivalent privacy law, and its approach to employee data, monitoring, and privacy protections differs materially from EU standards. There's no detailed country-specific data-protection regime or standardized background-check rules to point you to. This is a gap you'll need to fill with local counsel.

If you're transferring employee data across borders, for example to a parent company, clarify what's permissible locally before doing so.

Anti-discrimination and equal pay

The Labor Code prohibits discrimination at work and maltreatment of workers, but Vietnam hasn't adopted an EU-style pay-transparency directive. The specific protected categories, pay-transparency requirements, and reporting obligations aren't widely detailed in public guidance.

Work with local counsel to understand which categories are protected (likely gender, ethnicity, disability, and union membership) and what documentation you'll need to defend against a discrimination claim.

The broader compliance shift

Vietnam's employment framework is entering a stricter phase, driven by alignment with international labor standards, growth in foreign employment, and stronger enforcement against informal practices. The 2019 Labor Code, reinforced through 2025-2026 decrees, isn't just an administrative formality anymore. Non-compliance can trigger government inspections, administrative penalties, litigation, and reputational damage.

If you're hiring in Vietnam without a local entity or EOR, you're managing classification risk, digital contract compliance, and detailed reporting obligations yourself. Most foreign employers find it simpler and safer to use an EOR, which handles the regulatory layer so you don't have to.