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Summary of all new points in the Labor Law 2019 in Vietnam

Although the new Labor Law has been promulgated since 2019, it will not be officially effective until 2021. In the following article, ASL LAW will summarize all the notable new points in the Labor law 2019.

Expanding the scope and subject of regulation of the law

The Vietnam Labor law 2019 has an additional scope for those who work without an employment relationship compared to the old labor standards specified in the Labor law 2012.

In addition, the new Vietnam Labor law also has many separate standards that have been supplemented and amended compared to the old law.

Changes to holidays

Article 112 of the Vietnam Labor law 2019, which regulates public holidays and Tet holiday, has made an important change in the number of public holidays related to National Day in Vietnam (September 2).

Accordingly, employees will have an extra day off during the National Day holiday. The day off can be the day immediately preceding or following the National Day, that is, September 1 or September 3 depending on the specific situation of each year and the operating conditions of the business.

Thereby, from 2021, the total number of annual holidays and Tet’s holidays will increase to 11 days, specifically:

a) New Year’s Day: 01 day (January 1 of the solar calendar);

b) Tet holidays: 05 days;

c) Victory Day: 01 day (April 30 of the solar calendar);

d) International Labor Day: 01 day (May 1 of the solar calendar);

dd) National Day: 02 days (September 2 of the solar calendar and 01 day immediately before or after);

e) Hung King’s death anniversary: ​​01 day (March 10 of the lunar calendar).

During these days, employees are entitled to full pay leave.

Changes in overtime hours by month

Working hours have not changed compared to the Vietnam Labor law 2012. However, in terms of overtime, partly to respond to changes in Vietnam and internationally during this period, and partly to create conditions for businesses to recover and develop quickly and help employees to gain more income, Article 107 of the Labor law 2019 has changed the overtime hours of employees, increasing the number of overtime hours per month to 40 hours instead of 30 hours like before.

In addition, the law also stipulates in more detail, more specifically the cases of working overtime up to 300 hours/year such as manufacturing, processing, and exporting products such as textiles, garments, leather, shoes, electrical components, etc.

More cases of leave with full salary

In addition to the cases where the biological father, biological mother or parent-in-law dies, the employee is entitled to 3 days of full pay leave if they fully notify the employer in accordance with regulations, the Labor law 2019 also further stipulates that in case the adoptive father or mother dies, the employee will also be entitled to 3 days off with full salary.

If the deceased is the adoptive father or adoptive mother of the spouse, the employee is also entitled to 3 days off to handle the funeral and other matters arised.

In addition to the case of parents’ deaths, in cases where the spouse or biological or adopted child of the employee dies, the employee is also entitled to 3 days of leave with full salary when fully notifying the employer in accordance with regulations.

Increase retirement age

Article 169 of the Labor law 2019 has new regulations on the mechanism and roadmap to increase the retirement age of employees for a certain period of time.

Accordingly, the retirement age of employees under normal working conditions is adjusted according to the roadmap until reaching 62 years of age for male employees in 2028 and 60 years of age for female employees in 2035.

From 2021, the retirement age of employees in normal working conditions is 60 years and 03 months for men; full 55 years old and 04 months for females. After that, each year increases by 03 months for male employees; 04 months for female employees.

The roadmap to change the retirement age will make the retirement age of all workers in Vietnam increase by 2 years for men and 5 years for women compared to the present when the roadmap is completed.

More cases where the employee can unilaterally terminate the contract without reason

Article 35 of the Labor law 2019 allows employees the right to unilaterally terminate the contract without reason, with only 30 days’ notice in advance with a definite term contract with a term from 12 months to 36 months and 45 days in advance with an indefinite term contract.

In addition, in some cases, the employee has the right to unilaterally terminate the contract without reason, as well as without prior notice to the employer.

Changes in terms of contract

Article 20 of the Vietnam Labor law 2019 has removed the content of a seasonal contract or a job with a term of less than 12 months. From now on, in Vietnam, there are only two types of contract: labor contract with indefinite term and labor contract with definite term.

The regulation on eliminating these types of ‘unorthodox’ labor contracts mostly aims to reduce or even eliminate the situation of employers and employees evading social insurance and other benefits.

In terms of form, the Vietnam Labor law 2019 also adds regulations on electronic contracts. Accordingly, if the employer and employee enter into a labor contract via electronic means in the form of a data message in accordance with the law on electronic transactions, the contract shall be considered to have the same value as a written labor contract.

In addition, although it is not recommended, in some cases, verbal contracts and other types of agreements that clearly stipulate paid employment, wages, and the management, administration and supervision of a party are still considered to have the same legal validity as a labor contract.

Changes in the mechanism of money and salary for employees

The Vietnam Labor law 2012 does not have a mechanism for authorizing a third party to receive wages. This creates difficulties for workers who in many cases cannot receive their own wages.

Recognizing this shortcoming, Article 94 of the Labor law 2019 stipulates that in case the employee cannot receive the salary directly, the employer can pay the salary to the person legally authorized by the employee.

Accordingly, employees can authorize their relatives or friends to receive the salary on their behalf in case it is not convenient to receive the salary.

This situation is quite common in situations where the employee is detained or imprisoned for some reason, and to avoid the case where the employer refuses to pay wages, the employee can authorize the right to a 3rd party to receive salary and/or act on his/her behalf to perform other obligations such as debt repayment, etc.

Article 94 of the Vietnam Labor law 2019 also stipulates that the employer must not restrict or interfere in the employee’s decision to spend wages.

This means that the employer must not force the employee to spend wages on the purchase of goods or services by the employer or another entity designated by the employer.

This regulation will partly limit the situation of paying wages by products because enterprises are in a state of excess inventory and do not have enough money to pay wages in cash to employees.

In addition, another small change is that from now on, fees related to account opening and money transfer fees are mandatory responsibilities of the employer. These costs will be borne by the employer, which is different from the clause subject to the agreement between the employee and the employer in the Labor law 2012.

When paying wages, enterprises must also ensure to send detailed salary statements to employees clearly stating the salary received by the employee, salary paid for social insurance, fines, bonuses, etc.

If the salary is paid late for 15 days or more, the employer must compensate the employee an amount at least equal to the interest amount of the late payment amount calculated at the deposit interest rate of 01 month announced by the bank where the employer opens the salary account for the employee at the time of salary payment.

Changing the mechanism of money and salary on the part of the employer

Regarding support for employers, the Vietnam Labor law 2019 has changed the regulations on bonuses for employees, from “Money bonus” to “Bonus”.

The extension of this provision eliminates the limitation on bonuses for employees under the old law.

Accordingly, rewards for employees can now be bonuses or property, other types of products and services that businesses feel are reasonable.

With this mechanism, businesses can reward employees with their own products, helping to reduce the burden on businesses during difficult times.

However, it should be noted that this is a product bonus. The act of paying wages by products is absolutely prohibited and in essence is a violation of the law, equivalent to the crime of refusing to pay, or delaying wages to employees.

Regarding wages between enterprises and the government, enterprises only need to comply with the regulations that the salary paid to employees is equal to or higher than the regional minimum wage prescribed by the Government (the industry minimum wage has been canceled).

Other factors such as the construction of the salary scale, payroll, and employee work, etc. are decided by the enterprise itself.

Changes in the probationary regime at the enterprise

Employers and employees may agree on the content of the employee’s probation in a labor contract with probation content or a separate probationary contract.

For an enterprise manager according to the provisions of the Enterprise Law, the Law on Management and use of state capital invested in production and business at the enterprise, the probationary contract must not exceed 180 days.

For labor contracts with a term of less than 1 month, the probationary mechanism will not be applied according to Clause 3, Article 24 of the Labor law 2019.

Other changes

Periodic dialogue at work

Instead of holding the dialogue meeting every 3 months as at present, according to the provisions of the new Vietnam Labor law, the employer only needs to hold a dialogue once a year at the workplace.

In addition, when there is an unexpected incident that affects or is likely to affect the interests of employees such as the risk of job loss, job termination, construction of new payroll, etc., the employer also must hold dialogue in the workplace.

Limiting the compensation mechanism if the employee has not taken full leave

According to the Vietnam Labor law 2012, employees will be paid wages when the year-end summary calculates that the employee has not used up all his/her leave days.

However, Clause 3, Article 113 of the Vietnam Labor law 2019 stipulates that only in the case of severance, job loss, if the employees haven’t taken annual leave or all of the annual leave days, the employer will pay wages for unpaid days to employees.

Accordingly, under normal circumstances where employees still work normally at the enterprise, they will not be paid for unpaid leave days.

This mechanism is put in place to encourage employees to take care of their health, take all their 12 (or more) days off according to the law, rather than trying to work continuously to receive year-end compensation, seriously affecting their health and well-being.

Hiring children under 15 years old to work must have a medical certificate

The minimum working age of employees is full 15 years.

If an employee under the age of 15 wishes to work, the signing of a labor contract must be in the presence of the employee under the age of 15 and their legal representative.

Even though they are allowed to work, people from full 13 years old to under 15 years old are only allowed to do light jobs according to the list promulgated by the Minister of Labor, War Invalids and Social Affairs.

When employing a person under 15 years old to work, the employer must have a health certificate from a competent medical examination and treatment establishment certifying that the health of the person under the age of 15 is suitable for the job and the employer must organize periodic health checks at least once in 06 months as prescribed in Clause c Article 145 of the Labor law 2019.

Labor Regulations

According to the provisions of Article 118 of the Vietnam Labor law 2019, the employer must issue a written internal labor regulation for enterprises with 10 or more employees.

Accordingly, even if an enterprise has less than 10 employees but still has at least one employer-employee relationship in the enterprise, it must still have a labor rule, but this rule may not be in writing.

The contents of the labor regulations must not be contrary to the labor law and relevant provisions of law.

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.


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