Vietnam's New Labor Code – Key Changes

A new Labor Code will take effect on January 1, 2021¹. There are some key changes that will affect both employers and employees. Some employee protections have been extended and some changes are more aligned with the International Labor Organization and with international best practices. Employers will find that several requirements have been removed or become less restrictive. This article will discuss key changes.

Application scope. The New Labor Code has expanded the definition of "Employee". An Employee is now a person who: (i) works under an agreement with an employer, (ii) works under the supervision of the employer, and (iii) receives a salary. If a person has a contract which is not clearly a "labor contract" (eg, individual service contract), but the contents of the contract satisfy (ii) and (iii) above, then the contract is indeed a labor contract.