Expanding to Vietnam? Avoid Costly Hiring Pitfalls with Feilong Legal’s EOR + Recruitment Services
Southeast Asia’s market is booming! Many businesses are eager to expand, but navigating unfamiliar labor laws can be a challenge.
Want to enter the Vietnam market without the hassle of setting up a company or studying local labor regulations? Looking to hire local talent but unsure about recruitment channels and compliance risks? Don’t worry—Feilong Legal’s EOR (Employer of Record) + Recruitment services have successfully helped countless businesses in the Philippines, and now we’re bringing our expertise to Vietnam to make your expansion smoother and more efficient!
Six Common Employment Risks in Vietnam That Could Cost You
Managing employees in Vietnam comes with regulatory challenges. Here are six high-risk scenarios that could lead to hefty fines, labor disputes, or even lawsuits:
1. Failure to Sign a Written Labor Contract → Fines + Double Wage Compensation
Regulation: Vietnamese labor law requires written contracts for employees hired beyond a certain period.
Risks:
- Businesses may face significant fines.
- Employees can report violations and claim double wage compensation.
Case Study: A foreign-owned factory hired temporary workers without formal contracts. After a complaint, they were forced to backdate contracts and pay months of double wages.
2. Incomplete Social Insurance Contributions (SHUI) → Fines + Late Payment Penalties + Back Payments
Regulation: Employers must contribute to social insurance, health insurance, and unemployment insurance as per legal requirements.
Risks:
- Companies may be fined millions of Vietnamese dong.
- Late payments accumulate daily penalties and require full back payment.
Case Study: An IT company contributed social insurance at the minimum threshold. After an audit, they faced penalties and were ordered to pay back several years’ worth of contributions.
3. Exceeding Trial Period Limits or Underpaying Trial Wages → Compensation + Reputation Damage
Regulation:
- Trial periods must not exceed legal limits (varies by job type).
- Trial wages must meet the required percentage of full wages.
Risks: - Companies may be fined, and employees can claim unpaid wage differences.
4. Unlawful Termination → Compensation + Possible Reinstatement Orders
Regulation:
- Termination must comply with labor law requirements and must be communicated in writing.
Risks: - Unlawful termination can lead to months of wage compensation.
- Employees may request reinstatement, creating further management difficulties.
Case Study: A retail company terminated an employee due to poor performance but failed to provide sufficient evidence. The court ruled in favor of the employee, awarding several months’ wages in compensation.
5. Non-Compliance with Overtime Pay Regulations → Fines + Compensation
Regulation:
- Overtime hours are capped per day and per year.
- Overtime must be compensated at legally defined rates.
Risks: - Companies may face penalties and employee claims for unpaid wages.
6. Failure to Protect Female Employees → Discrimination Claims + Heavy Fines
Regulation:
- Pregnant and breastfeeding employees are entitled to special workplace protections, including restrictions on night shifts and heavy labor.
Risks: - Employers may face lawsuits and substantial fines for non-compliance.
The Best Solution? EOR + Recruitment!
Many businesses expanding to Vietnam struggle with these legal complexities. Feilong Legal prioritizes prevention over crisis management—ensuring full compliance from day one.
Recruitment Support: Quickly Build a Strong Local Team
- Extensive industry connections for precise candidate matching.
- Covers multiple roles—marketing, sales, technical, and managerial positions.
- Streamlined hiring process for fast onboarding.
EOR (Employer of Record) Services: Hire Without Setting Up a Company
- Legally Compliant Contracts – Formal employment agreements in line with Vietnam’s labor laws.
- Payroll & Social Insurance Management – Salaries and contributions handled legally and efficiently.
- Risk-Free Termination Support – Expert legal assistance to prevent unlawful dismissal disputes.
Who Can Benefit from Feilong Legal’s EOR + Recruitment Services?
✅ Market Entry Stage – Test the waters by hiring through EOR before committing to a legal entity.
✅ Early Team Formation – Build a workforce without dealing with complex business registration.
✅ Short-Term & Project-Based Hiring – Flexible employment solutions to optimize labor costs.
✅ Fast Market Expansion – Ensure payroll compliance and social insurance contributions to avoid legal pitfalls.
Don't Let Hiring Challenges Slow Your Expansion!
Feilong Legal’s Philippines & Vietnam EOR + Recruitment Services make it easy for businesses to expand in Southeast Asia without employment risks.