[Vietnam Legal Update] "FAQs about Internal Labor Regulations in Vietnam"

No.

Questions

Answers

1.    

What are Internal Labor Regulations, and why are they important?

ILRs are internal rules issued by the employer to regulate:

• Occupational standards: Working hours, rest periods and workplace safety;
• Conduct and Discipline: Prohibited behavior and corresponding disciplinary actions; and
• Operational Rights & Obligations: Responsibilities of employees and the management authority of the employer.

In practice, ILRs function as the legal foundation for enforcing workplace discipline. Without valid ILRs, the employer’s ability to impose disciplinary measures (including termination) is significantly limited.

Key Point

In dispute resolution (including labor arbitration or court proceedings), ILRs are often one of the first documents reviewed to assess the legality of employer's actions.

2.    

Are ILRs mandatory for all employers?

This depends on the number of the employees.

Mandatory Requirement: Employers with 10 or more employees must issue written ILRs and register them with the relevant labor authorities.

For small businesses (under 10 employees): A formal written ILR is not mandatory. However, the employer still needs to establish internal rules (through employment contracts or simplified policies) to maintain workplace discipline. Without these documented internal rules, enforcing penalties is virtually impossible.

Legal Consequences of Non-Registration

If an employer who is required to have an ILR has an ILR but fails to register it, the ILR is legally invalid, even if employees have signed it or it has been posted within the workplace for a long time.

3.    

What key contents must ILRs include?

An ILR must strictly include nine mandatory sections:

1. Working Hours & Rest Periods: Shifts, breaks, public holidays and annual leave, etc.
2. Workplace Order: Codes of conduct, attendance and professional behavior, etc.
3. Occupational Safety & Hygiene: Safety protocols and hygiene standards, etc.
4. Prevention of Sexual Harassment: Definitions and formal grievance procedures, etc.
5. Protection of Assets & Confidential information: Management of trade secrets, IP and company property, etc.
6. Temporary Reassignment: Procedures for moving employees temporarily to different roles.
7. Grounds for Disciplinary Action and Disciplinary Sanctions: A specific list of prohibited acts.  Limited to 4 types: Reprimand, deferment of pay rise, demotion or dismissal
8. Material Liability: Compensation procedures for damaged or lost assets, etc.
9. Person(s) with Authority to Impose Disciplinary Sanctions: Designation of the person(s) authorized to impose disciplinary sanctions.

Advisory note: Missing any of these nine sections and having the competent authority refuse to accept registration of the ILR, or failing to register the ILR renders the ILRs legally ineffective, exposing the company to high litigation risks during labor disputes.

4.    

What is the standard procedure for ILR registration?

The registration process involves multiple legally significant steps:

Step 1 – Drafting

ILRs should be drafted in compliance with Vietnamese law and tailored to the employer’s actual business operations.

Step 2 – Consultation

The employers must consult with the employees' representative organization (if any).

Legal significance: Failure to conduct this step may result in ILRs being challenged by the competent authority on procedural grounds.

Step 3 – Issuance

ILRs must be formally issued by the employer prior to submission.

Step 4 – Submission

A registration dossier must be submitted to the competent authority within 10 days.

Step 5 – Review by the Authority

The authority will review the dossier within seven working days and may:

• accept and record the ILRs; or
• request amendments or supplementation.

5.    

What are the steps for submitting ILRs through the public service portal?

Step 1: Access the Public Services website (https://dichvucong.gov.vn/) and select “Register”/“Log in”.

Step 2: Select “Registration of the company's labor regulations” (Code: 2.001955) as the type of administrative procedure.

Step 3: Select the implementing agency, then select “Submit application”.

Step 4: Double-check the submitting agency. Then select the “Submit online” button.

Step 5: Log in.

Step 6: Select the implementing agency. Then select “Agree” and “Continue”.

Step 7: Fill in the information and attach the ILRs. Then select “Continue” to submit the application.

6.    

Can a foreign parent company directly apply its global employment policies to its subsidiary in Vietnam?

Not completely.

A corporate group's global policies may serve as a useful reference framework; however, any ILRs implemented in Vietnam must comply with the requirements of Vietnamese labor laws.

In practice, certain provisions commonly found in global policies may not be fully compatible with, or readily enforceable under, Vietnamese law unless they are appropriately localized and adapted to the Vietnamese legal framework.

7.    

How should ILRs be approached from a risk management perspective?

Rather than treating ILRs as a standard template document, employers should:

(i) Customize ILRs

Reflect actual business operations, industry risks and workforce structure.

(ii) Ensure enforceability

ILRs must satisfy the following requirements:

• Clarity of content;
• Assessment criteria; and
• Consistent application.

(iii) Align with internal policies

ILRs should be consistent with employment contracts, HR policies and company practices.

(iv) Document implementation

Employers should:

• Communicate the content of ILRs to employees;
• Obtain written acknowledgment of receipt from every employee; and
• Maintain records for inspection or disputes.

8.    

Can a foreign parent company with multiple subsidiaries in Vietnam use the same ILRs for all of those subsidiaries?

To a certain extent, the same internal framework may be used as a reference. However, each legal entity in Vietnam should ideally maintain its own set of ILRs tailored to its specific circumstances, including:

• Organizational structure;
• Business location(s);
• Business lines and operations; and
• The legal particulars of the relevant entity.

In practice, labor authorities generally expect the ILRs registration dossier to accurately reflect the specific legal entity to which the regulations apply. Therefore, while the core provisions may be substantially similar across entities within the same corporate group, the ILRs should be customized to ensure consistency with the characteristics and registration details of each company.

9.    

Can the employer impose monetary penalties on employees for violations of the ILR?

No. Vietnamese labor laws do not allow employers to impose monetary fines or salary reductions in place of disciplinary measures prescribed under the ILRs and applicable laws.

The lawful disciplinary measures include:

• Reprimand;
• Deferral of salary increase for up to 6 months;
• Demotion; and
• Dismissal.

10.          

Is the prevention of sexual harassment at the workplace required to be addressed in ILRs?

Yes. Under Vietnamese labor laws, provisions on the prevention and handling of sexual harassment at the workplace are mandatory contents of the ILRs.

In practice, employers should clearly define:

• Prohibited behavior;
• Complaint and handling procedures;
• Disciplinary measures; and
• Confidentiality obligations during investigation processes.

Clear regulations help employers reduce legal and reputational risks while maintaining a safe working environment.

11.          

Is it necessary to translate ILRs into a foreign language for expatriate employees?

Not necessarily. Vietnamese law does not expressly require ILRs to be issued in a foreign language. However, for employers with foreign employees, it is advisable to prepare a bilingual version to ensure proper understanding and compliance.

Advisory note

In dispute scenarios, the Vietnamese version will generally prevail; however, inconsistency between language versions may create interpretational risks.

12.          

What are the most common reasons for an ILRs registration dossier being required to be amended or supplemented?

Some of the most common issues include:

• Provisions in the ILRs that are inconsistent with Vietnamese labor laws;
• Failure to include mandatory provisions on workplace sexual harassment;
• Provisions imposing monetary fines or wage deductions as disciplinary measures;
• Absence of records evidencing consultation with the employees’ representative organization (if any); or
• Inconsistencies in signatures or supporting documents within the registration dossier.

These are common issues encountered by foreign-invested enterprises, particularly those establishing or operating in Vietnam for the first time. Careful legal review of both the ILRs and supporting documents before submission can help minimize the risk of requests for amendment or supplementation from the labor authorities.

13.          

When do ILRs come into effect?

The ILRs take effect 15 days after the competent state agency receives the complete registration dossier for the labor regulations. If the employer has fewer than 10 employees and issues written ILRs, the effective date is determined by the employer in the ILRs.

14.          

Can ILRs be applied retroactively?

No. ILRs cannot be applied retroactively to conduct occurring before the ILRs’ effective date.

Legal implication

In practice, disciplinary actions should only be imposed for violations occurring after the effective date of the ILRs and after the employees have been duly informed of the relevant rules and obligations set out in the ILRs. Any disciplinary action based on retroactive application may be deemed invalid and unenforceable.

15.          

Which provisions in the ILRs are most likely to be subject to disputes?

In practice, disputes commonly arise in relation to:

• Grounds for dismissal;
• Disciplinary procedures;
• Violations or misconduct that are not clearly defined;
• Working hours and working time arrangements; and
• Confidentiality obligations.

Therefore, these provisions should be carefully drafted with clear and practical wording to minimize potential disputes and ensure effective application in practice.

16.          

Should the ILRs be aligned with employment contracts and the corporate group’s internal handbook?

Yes. In practice, many foreign-invested enterprises apply multiple internal documents simultaneously, including:

• Employment contracts;
• ILRs;
• Employee handbooks;
• Codes of conduct; and
• Global compliance policies.

These documents should be consistent and aligned with each other. If there are any inconsistencies or conflicting provisions among these documents, the company may face difficulties in implementation, enforcement and handling labor disputes.

However, it should be noted that all internal policies and documents must still ensure compliance with applicable Vietnamese labor laws and regulations. In particular, where internal rules or global policies differ from Vietnamese mandatory legal requirements, the company must prioritize compliance with Vietnamese laws when applying such provisions in Vietnam.

17.          

Can an employer dismiss an employee if it does not have ILRs?

Yes, but only if the employer has fewer than 10 employees and the relevant violation is specifically provided for in the employment agreement or provided for under the Vietnamese labor laws.

18.          

What is the fine for companies not registering ILRs?

Companies who fail to register their ILRs may be subject to a fine of between VND 10,000,000 and VND 20,000,000.

19.          

What is the fine for failure to notify all companies or failure to post the main contents of ILRs?

Companies who fail to notify all employees of ILRs or failure to post the main contents of the ILRs in accessible places at the workplace may be fined from VND 2,000,000 to VND 6,000,000.