Labor Law Q&A No. 1 in Vietnam: Contracts, Probation, Salary

Short answer: This article compiles Q&A on the most basic issues of labor law: what types of labor contracts exist; maximum probation periods; salary and salary payment periods; working hours and rest; and acts strictly prohibited in labor relations. Main basis: the Labor Code 2019 (effective from 01/01/2021).

Legal basis

• Labor Code 2019 — Articles 13 and 20 (labor contracts), Articles 24 and 25 (probation), Article 94 (salary payment periods), Article 105 (working hours), Article 111 (annual leave), Article 17 (prohibited acts).

What types of labor contracts exist?

Under Article 20 of the Labor Code 2019, labor contracts comprise 02 types:

• Indefinite-term labor contracts: the parties do not determine the term or the time of expiry;
• Definite-term labor contracts: the term does not exceed 36 months, including cases signed with foreign employees.

Labor contracts must be concluded in writing (except for contracts with domestic helpers or contracts under 01 month which may be verbal). When a definite-term contract expires and the employee continues working, the parties must sign a new contract; if it is a definite-term contract, only 01 additional signing is allowed, after which an indefinite-term contract must be signed.

Maximum probation period? Probation salary?

• Probation not exceeding 180 days for jobs of enterprise managers;
• Not exceeding 60 days for jobs requiring college-level or higher professional/technical qualifications;
• Not exceeding 30 days for jobs requiring intermediate-level qualifications, technical workers or professional staff;
• Not exceeding 06 working days for other jobs.
• Probation salary is agreed by the parties but at least 85% of the salary of that job;
• Probation is allowed only once for a job; probation does not apply to labor contracts under 01 month.

When is salary paid?

Employees paid by the hour, day or week are paid after the working hour, day or week, or as agreed by the parties, but no later than 15 days a payment must be made. Employees paid monthly are paid once a month or twice a month. In force majeure cases where the employer has taken all remedial measures but cannot pay on time, payment may be delayed no more than 30 days with an additional amount at least equal to the late amount multiplied by the 01-month term deposit mobilization interest rate.

What are the rules on working hours and rest?

• Normal working hours not exceeding 08 hours/day and 48 hours/week; the State encourages the 40-hour/week regime;
• Employees who have worked a full 12 months enjoy paid annual leave: 12 days (normal working conditions), 14–16 days (arduous, hazardous, dangerous work or places with harsh living conditions);
• Paid public holidays as prescribed (New Year’s Day, Lunar New Year, Hung Kings’ Commemoration, 30/4, 01/5, National Day).

What acts are strictly prohibited in labor relations?

• Discrimination, maltreatment, forced labor, sexual harassment at the workplace;
• Keeping originals of employees’ personal papers, diplomas and certificates; requiring monetary or asset deposits;
• Forcing performance of labor contracts to repay debts;
• Luring or promising jobs to deceive or exploit employees.

Frequently asked questions

Must labor contracts be in writing?

Yes, except for two cases that may be verbal: contracts with domestic helpers and labor contracts under 01 month.

What if the company does not sign an official contract after probation?

At the end of probation, the employer must notify the result; if requirements are met, the concluded labor contract continues to be performed, and where probation was under a probation contract, a labor contract is concluded.

Is late salary payment penalized?

Yes. Late salary payment is an administrative violation in the labor sector; in addition, compensation must be paid as prescribed when the delay exceeds 15 days.

Notes on applying current legislation

The Labor Code 2019 fundamentally changed many provisions compared with the Labor Code 2012 (now expired): only 02 types of labor contracts remain, seasonal contracts abolished; employees’ right to unilaterally terminate expanded. Enterprises still using forms and internal regulations under the old law should review and update them. Contact ANT Legal lawyers at 0966.475.966 for advice.

Common risks to note

• Signing definite-term contracts more than 02 consecutive times;
• Two probations for the same job;
• Probation salary below 85% of official salary;
• Late salary payment without additional compensation when delayed.

How can ANT Legal help?

ANT Legal advises and drafts labor contracts, internal labor regulations and collective labor agreements; advises on disciplinary handling, contract termination and labor dispute resolution. For prompt advice, please contact our lawyers at 0966.475.966.

Related articles

• Labor law Q&A No. (02)
• Labor law Q&A No. (03)
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