Vietnam mandates a comprehensive set of employee benefits aimed at safeguarding the welfare, health, and financial security of its workforce. Governed by Vietnam’s labor laws, these benefits are mandatory, making compliance essential for companies operating in the country. Employers utilizing Employer of Record (EOR) or Professional Employer Organization (PEO) services will find these benefits crucial in ensuring adherence to Vietnam’s labor standards.
1. Social Security Contributions (Bảo Hiểm Xã Hội)
Description:
In Vietnam, social security encompasses health insurance, pension contributions, unemployment insurance, and other welfare benefits. Both employers and employees contribute, providing coverage for retirement, healthcare, sickness, and maternity leave.
| Contribution Type | Employer Contribution | Employee Contribution | Coverage |
|---|---|---|---|
| Health Insurance | 3% | 1.5% | Healthcare services |
| Pension Insurance | 14% | 8% | Retirement benefits |
| Unemployment Insurance | 1% | 1% | Unemployment benefits |
| Maternity Insurance | 0.5% | 0.5% | Maternity leave benefits |
Outcome:
Social security contributions ensure extensive coverage for employees, providing access to healthcare, retirement income, and unemployment support, thus fostering a secure workforce.
2. Paid Annual Leave
Description:
Vietnamese law guarantees employees paid annual leave, typically starting at 12 days per year for a 5-day workweek. Employees accrue additional leave days based on their years of service.
Outcome:
Paid leave allows employees to rest and attend to personal matters while maintaining their income, promoting a healthy work-life balance and reducing burnout.
3. Maternity and Paternity Leave
Description:
Vietnam provides generous maternity and paternity leave policies to support family life.
- Maternity Leave: Female employees are entitled to 6 months (180 days) of paid maternity leave, typically with full salary covered by social insurance.
- Paternity Leave: Fathers are entitled to 5 days of paid leave following the birth of a child.
Outcome:
These leave provisions ensure parents can care for their newborns without financial strain, creating a family-friendly workplace and supporting gender equality.
4. Sick Leave
Description:
Employees are entitled to sick leave, which is supported by the social insurance fund. The number of days of sick leave paid varies depending on the duration of the illness and the employee’s social insurance status.
| Sick Leave Duration | Payment Policy |
|---|---|
| Up to 30 days | Paid by social insurance |
| 31+ days | Paid by social insurance (with additional conditions) |
Outcome:
Sick leave policies ensure employees can recover from illness without losing income, maintaining overall health and productivity in the workforce.
5. Severance Pay
Description:
Employees in Vietnam are entitled to severance pay upon termination after working for at least 12 months. The severance pay amount is typically equivalent to half a month’s salary for each year of service.
Outcome:
Severance pay offers financial security for employees transitioning between jobs, reducing the stress associated with job loss.
6. Public Holidays
Description:
Vietnam observes several public holidays, with employees entitled to paid time off. If an employee works on a public holiday, they are entitled to a premium wage.
Key holidays include:
- New Year’s Day (January 1)
- Lunar New Year (Tết Nguyên Đán)
- National Day (September 2)
- Mid-Autumn Festival (usually in September)
Outcome:
Public holidays promote cultural observance and support employee well-being, allowing time for relaxation and family gatherings.
7. 13th Month Salary (Lương Tháng 13)
Description:
Vietnamese labor law mandates the payment of a 13th-month salary, typically paid at the end of the year. The amount is equivalent to one month’s salary and is often given as a bonus for the employee’s contribution over the year.
Outcome:
The 13th-month salary provides employees with extra financial support, especially around the holidays, improving financial security and motivation.
8. Extra Legal Benefits
Description:
Many Vietnamese companies offer additional benefits, such as meal allowances, transportation support, and performance bonuses. While these are not legally required, they are commonly used to attract and retain talent.
Outcome:
Extra benefits enhance job satisfaction and can improve employee loyalty and productivity, creating a competitive advantage for employers.
Managing Benefits with EOR/PEO Services
Using EOR/PEO services, like GlobainePEO, simplifies the administration of Vietnam’s mandatory employee benefits. These providers manage payroll, social security contributions, leave entitlements, and other HR functions, ensuring that businesses remain compliant with Vietnam’s labor regulations.
Final Thoughts
The mandatory employee benefits in Vietnam reflect a strong commitment to employee welfare and financial security. Companies that understand and meet these obligations can build a supportive and compliant work environment, boosting employee loyalty and satisfaction. Partnering with EOR/PEO services ensures seamless compliance, allowing businesses to focus on their core operations with confidence, knowing their employees are receiving the benefits they are entitled to.
GlobainePEO – Your Trusted Partner in Vietnam
At GlobainePEO, we simplify Vietnam’s employee benefits management, ensuring full compliance with local labor laws. We handle essential benefits such as social security contributions, paid annual leave, severance pay, maternity/paternity leave, and the 13th-month salary, allowing you to focus on business growth while we safeguard your employees’ welfare and legal rights. Let us manage your employee benefits in Vietnam with confidence.