Overview of Vietnam’s 2025 Employment Law Reform

Vietnam has embarked on a transformative journey within its labor market with the introduction of the 2025 Employment Law, set to take effect from January 1, 2026. This law represents a significant overhaul of the country’s labor regulations, seeking to align domestic employment practices with international standards and to address modern work realities fueled by the gig economy and digitalization.

Key Changes and Innovations

Unemployment Insurance Reform

The most noteworthy component of the new law is the comprehensive reform of the unemployment insurance (UI) system. The updated framework broadens access to UI, particularly for non-traditional employment arrangements. Here’s what’s new:

• Short-Term Contract Workers: Individuals working under labor contracts lasting between one month and less than three months are now eligible for unemployment benefits, recognizing the prevalence of short-duration contracts in today’s labor market.

• Part-Time Employees: Workers in part-time roles whose monthly income meets the statutory minimum wage can now avail of UI. This inclusion marks a significant shift in ensuring that part-time status does not preclude access to necessary social protections.

• Salaried Management Personnel: The reform extends UI coverage to certain paid governance roles within organizations, including board members and directors, reflecting a more modern understanding of employment roles beyond traditional labor contracts.

Establishment of Digital Labor Market Information Systems

In response to the ongoing digital transformation, the new law mandates the legal recognition of a digitalized labor market information system. A National Labor Registration Database will be established to enhance administrative efficiency. This institutional reform aims not only to streamline workforce data reporting but also to bolster state capacity in job forecasting and skills matching.

Employee Data Privacy and Protection

Another significant inclusion in the Employment Law is the codification of employee data privacy rights. Employers are now legally obligated to secure explicit consent for collecting, processing, or sharing personal data. The law outlines stringent measures for data storage, access control, and audit processes, aligning Vietnam’s regulations with global standards such as the EU’s General Data Protection Regulation (GDPR).

Emphasis on Reskilling and Lifelong Learning

The new legal framework strongly promotes continuous development, prompting employers to invest in training and educational initiatives for their workforce. This shift, identified as a strategic national priority, aims to ensure that employees remain adaptable in a rapidly evolving economic landscape.

Key provisions include:

• The development of National Skills Qualification Frameworks to standardize and align skill levels with international benchmarks.
• Support for individuals from disadvantaged backgrounds and the promotion of mutual recognition of skills across borders.

Stakeholder Impact

Employers

All employers, including local and foreign-invested enterprises, will need to revise their HR policies and employment contracts to comply with the new regulations. Small and medium enterprises, particularly those utilizing flexible staffing, will face additional adjustments to align with updated compliance frameworks.

Employees

The impact on employees is profound. The 2025 Employment Law enhances protections across various employment types, including full-time, part-time, and freelance workers. Employees will benefit from a broader safety net and increased access to training programs designed to improve employability.

HR and Legal Professionals

Human resource and legal teams are tasked with revising internal policies, contracts, and compliance systems to meet the new requirements. Training programs must be established to ensure managers are equipped to handle the updated dispute resolution processes.

Government and Regulatory Bodies

Regulatory bodies will play a critical role in enforcing compliance with the new law. This encompasses monitoring data privacy audits and providing guidance on workforce training initiatives, which indicates that businesses should prepare for increased scrutiny in their operations.

Preparation Strategies

For Employers

• Revise HR Policies: Organizations should update employee handbooks and privacy notices to reflect the new legal requirements.
• Develop Training Programs: Implementing internal upskilling initiatives becomes vital as businesses look to support employee adaptability and align with new unemployment benefit conditions.

For Employees

• Understand New Rights: Employees are encouraged to familiarize themselves with their expanded protections, particularly regarding data privacy and unemployment support.
• Engage in Training: Participating in employer-sponsored training programs is essential for enhancing career prospects in a changing employment landscape.

Opportunities for Businesses

Beyond the necessity of compliance, the 2025 Employment Law unveils strategic opportunities for businesses:

• Workforce Transformation: Reskilling initiatives can lead to more agile, competitive teams capable of thriving in a dynamic market.
• Digital HR Acceleration: The shift towards digital labor contracts offers a timely opportunity for businesses to digitize HR processes, potentially reducing administrative overhead.
• Flexibility Enhancement: Organizations investing in employee development and data protection can enhance their standing as desirable employers.
• Professional Services Expansion: Legal and HR consultancies may broaden their service offerings in contract digitization and data privacy advisory, catering to organizations navigating the new landscape.

By focusing on human capital development, responsible data governance, and proactive talent management, stakeholders can navigate the reforms presented by Vietnam’s 2025 Employment Law. This comprehensive legal framework marks a pivotal step toward fostering a resilient, adaptable workforce that is prepared for future challenges.