An Employer of Record in Vietnam lets a foreign company employ staff there without setting up a local subsidiary: the EOR signs the labour contract, runs payroll and carries the statutory obligations set out in Vietnam's Labour Code No. 45/2019/QH14, which took effect on 1 January 2021, while your company manages the person's actual work. Vietnam's labour rules are detailed and enforced through labour authorities in each province, so the frame that decides the buy is the Code itself: probation limits, notice periods, compulsory insurance and, where relevant, the separate rules on labour dispatch, meaning outsourcing.
Probation periods are capped by role
Article 25 of the Labour Code sets the maximum probation period by the complexity of the job: up to 180 days for an enterprise executive role, 60 days for positions requiring a junior college degree or higher, 30 days for jobs requiring an intermediate vocational certificate or skilled technical work, and 6 working days for all other jobs. Only one probation period is allowed per job. Probation pay must be at least 85% of the agreed salary for the role under Article 26, and during probation either party can end the arrangement without notice or compensation once the result is unsatisfactory under Article 27. An EOR provider builds these caps into the contract it signs as the legal employer.
Notice periods for ending a contract
Under Article 35, covering employee resignation, and Article 36, covering employer-initiated termination, the same notice bands apply to both sides: at least 45 days for an indefinite-term contract, at least 30 days for a fixed-term contract of 12 to 36 months, and at least 3 working days for a fixed-term contract under 12 months. Shorter notice is only permitted without penalty in specific circumstances the Code sets out, such as an employee who is not being paid on time. An employer who terminates unlawfully faces reinstatement plus back pay obligations under Article 41, which is one of the compliance risks an EOR absorbs as the contracting employer of record.
Compulsory social, health and unemployment insurance
Article 168 of the Labour Code requires employers and employees to participate in compulsory social insurance, compulsory health insurance and unemployment insurance under Vietnam's separate insurance laws, with contributions and registration filed against the legal employer of record. Where an employee is not covered by one of these schemes, the employer must instead pay the employee a cash amount equal to the employer's share of the missed contribution alongside the salary itself under Article 168.3. Because the EOR is the registered employer, it is the party that carries these statutory insurance filings and remittances rather than the client company.
Labour dispatch, meaning outsourcing, is separately regulated
Vietnam draws a legal line between an EOR, which is the sole employer of the worker, and labour dispatch under Articles 52 to 58, where a licensed dispatching agency assigns its own employees to work temporarily under a client's day-to-day direction. Labour dispatch is a licensed, deposit-backed business limited to specific situations, such as a short-term spike in demand or covering an employee on leave, capped at 12 months per assignment, and the dispatched worker must be paid no less than a directly hired employee doing the same work. An EOR hire, by contrast, is not time-capped and is used for an ordinary, often indefinite-term role rather than a temporary placement.
Questions people ask about employer of record vietnam
What is the maximum probation period allowed in Vietnam?
It depends on the role: up to 180 days for an enterprise executive, 60 days for jobs needing a junior college degree or higher, 30 days for intermediate vocational or skilled roles, and 6 working days for other jobs, under Article 25 of the Labour Code.
How much notice does an employer have to give in Vietnam?
At least 45 days for an indefinite-term contract, 30 days for a fixed-term contract of 12 to 36 months, and 3 working days for a fixed-term contract under 12 months, under Articles 35 and 36 of the Labour Code.
Is hiring through labour outsourcing legal in Vietnam?
Yes, but only through a licensed labour dispatch agency and only for specific situations such as temporary demand spikes or covering leave, capped at 12 months per assignment. It is a distinct legal category from an Employer of Record hire, which is the sole, indefinite employer of the worker.
Does an Employer of Record handle social insurance in Vietnam?
Yes. Article 168 of the Labour Code makes social, health and unemployment insurance compulsory, and because the EOR is the registered legal employer, it is the party that files and remits these contributions.