Vietnam HR Compliance Guide 2022

When people think of the HR department, more often than not, they think about recruitment and compensation. However, HR pros like us all know that in fact, the HR team plays a significant role in keeping the business in compliance with a variety of labor laws. With so many rules in effect, are you struggling to search for the law applicable to your case?

We've got your back! This Vietnam HR Compliance Guide 2022 covers commonly used labor laws for you to quickly lookup at and provide advice to help you stay away from legal violations and avoid costly penalties.

This guide includes:

1. Employment Contract
2. Working Hours, Overtime, Paid Time Off & Holiday
3. Payroll, Insurance & Tax
4. Common Compliance Matters & Advice For The Employer and The Employee (Part 1)

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Still hesitant? Here's a sneak peek of part IV. Let's go through it and decide if you should download it or not!

Common Compliance Matters and Advice for The Employer and The Employee (Part 1)

For the Employer:

1. Job advertisements or requirements triggered labor discrimination regulated in the Labour Code 2019

Examples: Job requirements or questions made during the recruitment or onboarding process of a candidate relevant to pregnancy (for female employee), marital status, disability, or even gender without any particular and reasonable context.

Consequences:

• An administrative penalty from 5 million VND to 10 million VND shall be imposed on the employer; and
• Negatively and largely impact the employer branding.

Advice: Make sure you give enough context in all job requirements and do not ask for more than required. Always assess whether these requirements relate to the core or ability to carry out the job responsibilities of the employee.

2. Require any monetary or material security from the employee to conduct their job duties as set out in the labor contract

Examples: Deposit for the uniforms, personal protective equipment, goods, or services relevant to the job duties of the employee.

Consequences:

• An administrative penalty from 20 million VND to 25 million VND shall be imposed on the employer; and
• Return to the employee the monetary or material security plus an interest amount equivalent to the highest interest of indefinite savings published by the state commercial bank at the time of the administrative penalty.

Advice: Make sure you have a proper asset handover process at the onboarding stage of the employee, a tracking process for the asset usage of the employee during their employment, and a proper asset handover process required for the employee when the employment is terminated.

3. Apply probationary period exceeding the maximum duration regulated in the Labour Code 2019

Examples: Apply 60-day probationary period for all positions in the company without checking the qualification requirements of the job or the actual educational qualifications of the candidate.

Consequences:

• An administrative penalty from 2 million VND to 5 million VND shall be imposed on the employer; and
• The employer must pay 100% of the salary of the job to the employee during the whole probationary period; and
• Potentially lead to the risk of employee’s claim for a confirmed labor contract.

Advice: Always make sure that the probationary period is applied to the employee correctly in respect of the regulated qualification as set out in the Labour Code 2019.

4. Take advantage of the training agreement of 3 months to replace the probation contract of the employees

Examples: Forcing employees to work during the training agreement’s period without any real training activities relevant to the job duties or required qualifications to carry out the jobs.

Consequences:

• An administrative penalty from 50 million VND to 75 million VND shall be imposed on the employer; and
• The employer must pay all profits/benefits collected or generated from such business activities to the State Budget.

Advice: If the employer has the intention to get the employees properly trained to meet the required qualifications before carrying out the jobs, the employer must genuinely invest in training programs implementation of such programs for the employees. Otherwise, the employer should consider the option of probation for the employee as regulated in the Labor Code 2019.

For the Employee:

1. Provide untruthful information of qualification or background during the recruitment process with the employer

Examples: Provide false information about the health status, provide fake educational or professional qualifications, or any information required by the employer, which impacts directly the employee engagement decision of the employer.

Consequences:

• The employer is entitled to unilaterally terminate the labor contract with a prior notice period as stipulated in the Labour Code 2019;
• If any damage or loss happened to the employer as a result of the provided untruthful information, the employer is entitled to request indemnification from the employees according to the civil laws; and
• Negatively impact on the personal branding as an employee.

Advice: Pay attention to the information provided to the employer during and after the hiring process with the employer, better to always stay honest with the highest sense of integrity to build good personal branding and image as an employee.

2. Be absent without proper reason consecutively from 5 working days and above

Examples: Be absent or silent or uncontactable or offline from work consecutively from 5 working days and above without proper reasons (i.e. sickness) and supporting evidence or without the approval of the employer.

Consequences:

• The employer is entitled to unilaterally terminate the labor contract immediately;
• Not entitled to any severance pay;

Advice: Make sure to always keep your line manager updated about your absence from work, and such absence is with proper reasons (as stipulated in Article 125.4 of the Labour Code 2019) and evidence.

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