Vietnam
Change to minimum regional wage at commune-level
Impact date: 1 July 2025 After the arrangement of administrative boundaries of provinces and centrally-run cities, the Government issued Decree 128/2025/ND-CP dated 11 June 2025 on decentralization and delegation of State management in the field of home affairs, with a list of commune-level areas applying the region-based minimum wage. Consequently, some areas might be subject to a new regional minimum wage.
Employer implications/action needed If the employer is located in an area with a new regional minimum wage, it must check and make necessary amendments to wage levels and scales contained in internal working rules, payroll, labor collective agreements (if any), and employment contracts, to ensure that all employees’ wages comply with the new region-based minimum wage.
Employer risk An employer paying their employees’ salaries which are lower than the statutory minimum wages announced by the Government may be subject to the following penalties:
- A fine ranging from VND 20,000,000 to VND 75,000,000 depending on the number of impacted employees
- Remedial measure: Compelled payment to impacted employees of full salaries plus interest on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition
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New guidelines for compulsory social insurance participation
Impact date: 1 July 2025 New guidelines have been introduced for implementing several key provisions on compulsory social insurance (SI). These updates expand the scope of mandatory SI, define the “reference level” used to calculate contributions and benefits, and provide clearer guidance on salary components forming the basis for SI contributions. Foreign employees with contracts of 12 months or more are now explicitly covered. Additionally, the law supplements procedures for pursuing overdue contributions and allows for temporary suspension of SI obligations under specific conditions.
Employer implications/action needed Employers should review and update employment contracts, payroll systems, and HR policies to ensure all eligible employees are correctly enrolled in compulsory SI and contributions are calculated based on the revised salary and reference level definitions.
Employer risk Employers risk back payments, financial penalties, and reputational damage if they fail to correctly identify and enroll all newly eligible employees in compulsory SI or miscalculate contributions under the updated guidelines.
New regulations on foreigners working in Vietnam
Impact date: 7 August 2025 Regulations for foreign labor have been amended. The changes include that experts no longer need three years of experience to obtain a work permit (WP)—only one year is required in certain priority sectors. WP exemptions are also expanded, notably for short-term work under 90 days per year. Digitalization is promoted through online submissions and concurrent issuance of criminal record certificates and WPs. Further, WP issuance is decentralized to provincial-level People's Committees and foreign employees are allowed to work across multiple provinces with prior notification.
Employer implications/action needed Employers must submit online applications for work permits or exemptions, notify authorities when foreign employees work across multiple provinces, and ensure compliance with updated exemption categories and documentation requirements.
Employer risk Employers risk fines if they breach the procedural requirements, including failing to properly notify authorities when foreign employees work across multiple provinces, misapply exemption criteria, or do not adhere to updated documentation and procedural requirements.
Amended regulations on health insurance participation
Impact date: 15 August 2025 (all substantive provisions) On 1 July 2025, the Government issued Decree No. 188/2025/ND-CP to guide the implementation of a number of articles of the Health Insurance Law (“Decree 188”), including introducing new participant categories, clarifying contribution rates and exemptions, and setting penalties and interest rates for late or evasive payments.
Employer implications/action needed Employers should ensure timely payment of health insurance premiums at the prescribed rate, namely 4.5% of the salary used as the basis for compulsory social insurance contributions, in which the employer contributes 2/3 and the employee contributes 1/3. Applicable individuals are:
- Employees working under indefinite term employment contracts (“ECs”) or definite-term ECs of 1 month or more
- Enterprise managers, controllers, state capital representatives, enterprise capital representatives as prescribed by law
- Foreign employees working in Vietnam under definite-term ECs of 12 months or more, except for those who are intra-corporate transferees or reaching retirement age
Employer risk Employers who delay or evade health insurance contributions must pay an interest penalty calculated as 0.03% per day on the overdue amount. Additionally, the employer may be subject to fines and remedial measures.
Labor administrative requirements and unemployment insurance changes
Impact date: 1 January 2026 A new law for the first time requires both employers and employees to register and update labor registration information when registering or adjusting information on employees’ social insurance (“SI”) participation. It also continues to stipulate the four unemployment insurance (“UI”) regimes similar to those under the current law, but more clearly defined, and expands the benefits for both employees and employers.
Employer implications/action needed Employers must collect employees’ mandatory information to perform the labor registration and to prepare and submit applications for expanded UI participant categories, including:
- Persons working under indefinite-term employment contracts (“ECs”) or definite term ECs with a term of one month or more
- Part-time employees working under the above-mentioned ECs with monthly salaries equal to or above the lowest salary level used as the basis for payment of compulsory SI contributions as stipulated by SI Law
- Enterprise managers, controllers, representatives of capital contribution portions of enterprises as prescribed by law
Employer risk Non-compliance or inaccurate reporting of labor information may lead to penalties, inspections, or reputational damage. Employers who fail to contribute to UI must compensate workers directly for missed benefits.
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