In Vietnam, labor violations are more than just HR missteps; they can lead to administrative fines, lawsuits, or even criminal exposure. As enforcement of labor laws becomes increasingly rigorous, both domestic and foreign employers must understand what constitutes a violation and how to remain compliant. Many labor disputes arise not from intentional wrongdoing but from gaps in understanding complex and evolving regulations.

This article outlines the most common labor violations under Vietnamese law, their consequences, and how employers can proactively protect their organizations from legal risks.

Definition of a Labor Violation Under Vietnamese Law

According to the Vietnamese Labor Code (Law No. 45/2019/QH14), a labor violation is any act or omission that infringes upon the rights and obligations of employers or employees as defined by law. These violations may range from failure to pay proper wages to unlawful termination, and depending on severity, they can result in administrative penalties, civil liability, or even criminal prosecution.

Violations are categorized into:

• Administrative breaches (e.g. late payment of wages)
• Civil liabilities (e.g. damages awarded to employees)
• Criminal offenses (e.g. abuse, coercion, or fraudulent employment practices)

Common Types of Labor Violations in Vietnam

Wage-Related Violations

One of the most frequent and easily scrutinized areas of non-compliance is employee compensation. Employers are required to pay at least the minimum wage as mandated by the regional labor authorities. Common violations include:

• Paying below the statutory regional minimum wage, which varies by geographic zone and industry type
• Failing to pay wages on time, which can disrupt employees’ personal finances and breach contractual terms
• Making unauthorized salary deductions without employee consent or proper legal justification
• Not paying correct overtime rates or allowances for work performed beyond standard hours or on holidays

These wage-related violations not only erode trust and morale but may lead to formal complaints and back-pay orders from the labor inspectorate.

Working Hours and Overtime

Vietnamese law strictly limits working hours to safeguard employee health and well-being. Violations in this area include:

• Employers exceeding daily or weekly overtime limits without proper written agreements
• Failing to pay the correct overtime premiums, which are typically calculated at 150% to 300% of regular wages, depending on when the overtime occurs
• Ignoring mandated rest breaks, weekly days off, or public holidays, which can lead to employee fatigue and burnout

Improper overtime practices are a leading cause of labor disputes and often attract the attention of regulatory authorities.

Unlawful Termination

Termination procedures in Vietnam are highly regulated. Employers must follow clear legal grounds and formal processes when ending employment. Violations often include:

• Dismissing employees without legal grounds, such as lacking evidence of misconduct or redundancy
• Not providing proper advance notice, which can vary based on contract type and duration of service
• Failing to pay severance, unemployment insurance, or other required compensation upon termination

These missteps may result in court-ordered reinstatement, full back pay, and legal costs borne by the employer.

Social Insurance and Legal Benefits

Compliance with social insurance obligations is mandatory in Vietnam. Violations are among the most commonly cited during audits:

• Not enrolling employees in social, health, and unemployment insurance, even for short-term or probationary staff
• Underreporting employee salaries to lower employer contributions, which may later affect employees’ insurance claims and benefits
• Denying or delaying employee access to statutory leave, such as annual leave, sick leave, maternity or paternity leave, and bereavement leave

Non-compliance in this area can trigger financial penalties, interest charges, and loss of employee trust.

Discrimination and Workplace Harassment

Vietnamese labor law enforces the principle of equality and dignity at work. Violations include:

• Unequal treatment in recruitment, salary, promotion, or dismissal based on personal characteristics such as gender, ethnicity, religion, or political views
• Failing to address or actively ignoring harassment, intimidation, or bullying in the workplace
• Retaliating against employees who lodge complaints or participate in investigations

These issues not only violate legal obligations but can severely damage company culture and lead to costly litigation or reputational fallout.

Working Hours and Overtime

Vietnamese law restricts the maximum number of working hours per day and per week, and sets mandatory rest breaks.

• Employers may not exceed the legal overtime limits without proper documentation and consent
• Failure to pay the correct overtime premium (usually 150% to 300% of base salary)
• Skipping required weekly days off or national holidays

Unlawful Termination

Employers must follow strict procedures when terminating employees. Violations include:

• Dismissing employees without legal grounds
• Terminating without proper advance notice
• Not providing mandatory severance pay or legal compensation

If a termination is deemed unlawful, the court may order reinstatement and back pay.

Social Insurance and Legal Benefits

Failure to comply with social insurance and other statutory benefits is a serious and common violation:

• Not registering employees for social, health, and unemployment insurance
• Underreporting wages to reduce insurance contributions
• Denying entitlements such as annual leave, sick leave, or maternity leave

These actions can trigger investigations and substantial fines from labor authorities.

Discrimination and Workplace Harassment

Vietnamese labor law prohibits any form of discrimination based on gender, age, race, religion, disability, or political opinion. Violations include:

• Unequal treatment in hiring, promotion, or termination
• Ignoring or tolerating harassment or bullying in the workplace
• Retaliation against employees who file complaints

Legal Consequences for Labor Violations

Violations of labor law may result in significant legal consequences for employers. Administrative penalties are one of the most common outcomes. Under Decree 12/2022/ND-CP, fines can range from VND 1 million to VND 100 million, depending on the nature and severity of the violation. Repeat or systemic non-compliance can attract higher sanctions.

In addition to financial penalties, employers may face civil liability. This includes obligations to compensate employees for unpaid wages, back pay, denied insurance benefits, or other financial losses resulting from the violation. Courts may also require the reinstatement of wrongfully terminated employees.

In extreme cases, labor violations can result in criminal liability. Executives and managers involved in practices such as forced labor, serious harassment, or fraudulent employment schemes may be prosecuted under Vietnam’s Penal Code.

Beyond formal penalties, labor violations can also lead to reputational damage. Media coverage, employee dissatisfaction, and reduced investor confidence can all impact business operations, particularly for companies that rely on international partnerships or operate in regulated industries.

How Employers Can Prevent Labor Violations

To mitigate risks, employers should take proactive steps to ensure full compliance:

• Implement compliant contracts and HR policies: All employment terms must align with the Labor Code.
• Conduct regular internal audits: Review working hours, payroll, insurance registration, and termination procedures.
• Train HR and management teams: Keep them updated on legal changes and best practices.
• Maintain transparent documentation: Contracts, payslips, insurance records, and disciplinary actions must be clear and well-documented.
• Engage legal counsel: Especially during dismissals, restructurings, or disputes, legal review can prevent future liability.

Conclusion

Labor violations in Vietnam carry significant legal, financial, and reputational consequences. Ensuring full compliance with the Labor Code is not just a regulatory requirement but also a critical component of maintaining a productive and legally sound workplace.

With deep expertise in Vietnamese employment law and a proven track record in advising and defending employers, Le & Tran is a trusted advisor for businesses navigating labor compliance and dispute resolution. For professional legal support in managing employment risks and building compliant HR practices, contact us at info@letranlaw.com.