Vietnam's Employment Law 2025: What Employers and Employees Need to Know

On 16 June 2025, the National Assembly of Vietnam officially passed the Employment Law 2025, replacing the Employment Law 2013. The new law will take effect on 1 January 2026. Among its most significant revisions are changes to unemployment insurance (UI) regulations, aimed at expanding coverage, increasing benefits, and clarifying the responsibilities of both employers and employees. This article summarizes the most notable updates to Vietnam’s unemployment insurance system and other key changes under the new Employment Law 2025.

1. Major Changes to the Unemployment Insurance System

·       Broader Scope of Participants: The Employment Law 2025 broadens the scope of mandatory UI participation to include (1) employees with labor contracts of at least one month and (2) part-time employees under similar contracts whose monthly salary exceeds the minimum wage.

·       Additional Exclusions: The Employment Law 2025 now excludes the following groups from UI participation: (1) employees who meet the conditions for receiving retirement pensions (not just those already receiving them, as under the 2013 Law), (2) employees receiving other social insurance benefits or monthly government allowances, and (3) employees on probationary contracts. The new law also broadens the situations where UI contributions are not required. Now, employees who do not receive a salary for 14 working days or more in a month will not be subject to UI contributions. (Previously, under Decree 28/2015, this only applied to those on maternity or sick leave for that duration).

·       Contribution Rates and Salary Basis: The UI contribution rate is set at a maximum of 1% of the employee’s monthly salary, giving the government flexibility to adjust the rate below this ceiling if needed. The salary basis for UI contributions now includes the monthly salary plus any allowances or other regular additional payments. This is a change from the Employment Law 2013, which based UI contributions only on the salary used for social insurance.

·       Employer Liability: If an employer fails to pay UI contributions, they are now required to directly pay the employee an amount equivalent to the UI benefits the employee would have received. This resolves a significant limitation in the previous law, where employees often had to wait for their employer to settle unpaid contributions before receiving benefits. This new rule ensures faster access to financial support and better protects employees’ rights.

·       Suspension and Back-Payment of Contributions: For the first time, the Employment Law 2025 formally recognizes the temporary suspension of UI contributions when an employee is detained or suspended from work. If the employee is later paid their full salary for the suspension period, the employer and employee must back-pay the UI contributions for that time.

·       No UI Allowance for Retirees: Employees who meet the conditions for a retirement pension will not be eligible for UI benefits, even if they have not yet applied for their pension. This change appears designed to prevent individuals from delaying their pension claims to concurrently receive UI allowances.

2. Increased Monitoring and Reporting Obligations

The Employment Law 2025 introduces a framework for the Government to collect comprehensive employment information, creating a national database on employment data and the labor market.

·       Individual Reporting: All working individuals will be required to register their employment details with the authorities, including identity information, educational background, employment status, and employment needs. Individuals are responsible for keeping this information accurate and up-to-date.

·       National Database: Based on this information, the Government will establish a national database on employees (cơ sở dữ liệu về người lao động) that will be integrated with other government databases. A separate database on the labor market will also be created.

·       Data Privacy: Any illegal sharing, exchange, or use of information in these databases is prohibited. A key point to watch will be how the government clarifies this prohibition, as it's currently unclear if it applies only to the use of the government databases themselves or to any private database containing similar information.

This post is written by Pham Thi Thu Trang and edited by Nguyen Quang Vu.