LAW ON EMPLOYMENT 2025 (No. 74/2025/QH15) Effective from 01 January 2026

I. Key Reform Pillars

1. Digitalization of Labor Administration
   
   

The Law mandates the development of a National Labor Database, interconnected with other State databases (including national population and personal identification systems).

Employer obligations include:

• Providing employee information;

• Timely updating workforce fluctuations;

• Ensuring the completeness and accuracy of submitted data.
  
  

This forms the basis for inter-agency cross-verification and compliance monitoring.

Scope of Participation in Unemployment Insurance (UI)

The Law defines UI participation based on:

• Employees working under labor contracts; and

• Employers.
  
  

Detailed provisions on contract terms, contribution rates, and payment methods will be stipulated by the Government through implementing decrees.

UI Contribution Rates

The Law does not prescribe fixed contribution rates.

Principle:

• UI contribution rates shall be determined in accordance with Government regulations.

II. Employer Legal Liabilities

1. Direct Compensation to Employees

   
   The Law stipulates that:

   
   Where an employer breaches obligations related to UI, resulting in an employee being ineligible for benefits, the employer must directly compensate the employee for the corresponding entitlements.

   
   This constitutes a statutory liability arising directly under the Law.

   
   

III. Violations and Sanctions (Applicable under relevant legislation from 2026)

⚠️ Note: The Law on Employment 2025 does not specify penalty levels. Sanctions are governed by the Law on Social Insurance, administrative penalty decrees on labor and insurance, and other relevant regulations.

Late Payment / Evasion of UI Contributions

• Late payment interest: 0.03% per day calculated on the outstanding amount and duration of delay.

Administrative Penalties (Common applicable framework)

• Failure to register employees / failure to update digital labor data:

→ Fine ranging from VND 5 million to VND 10 million.

• Late payment of UI contributions:

→ Fines calculated as a percentage of the payable amount, in addition to full recovery of principal and late payment interest.

• Evasion or fraudulent declarations:

→ Fine ranging from VND 50 million to VND 75 million.

Additional Enforcement Measures

In cases of prolonged insurance arrears or deliberate evasion:

• Application of enforcement measures under relevant laws;

• Potential exit suspension for the legal representative, depending on case specifics.

Conclusion

From 01 January 2026, labor management in Vietnam will operate on a national data platform. Under-declaration of workforce, misreporting of wages, or evasion of UI contributions will become increasingly difficult due to automated cross-check mechanisms.

Employers will not only face administrative penalties and late payment interest, but also direct compensation liabilities toward employees for lost UI entitlements.

The Law on Employment 2025 imposes an urgent requirement for businesses to review, standardize, and ensure compliance in HR records and insurance obligations throughout 2026.

⚠️ IMPORTANT NOTE

Although effective from 01 January 2026, the National Labor Registration Database system is expected to be fully operational nationwide from 01 July 2026.

Enterprises are advised to utilize the first half of 2026 to:

• Review and cleanse HR data;

• Ensure data accuracy and compliance readiness before full system deployment.