Vietnam Overhauls Digital Economy Rules With New Labor and Data Decrees
Vietnam has overhauled its digital economy and workplace regulations across 2025 and 2026, introducing stricter data protection laws, online work permit systems, and new penalty decrees. Diep Hoang and Huong Nguyen, legal professionals at Dilinh Legal in Ho Chi Minh City, reported details of these reforms, highlighting that while electronic systems streamline administration, long-standing rules on internal labor regulations and terminations continue to carry high risks for employers.
Electronic Labour Contracts and Online Work Permits Take Effect
The regulatory framework shifts administrative processes to national digital platforms. Under the Labour Code, electronic labour contracts hold the same validity as written agreements when digitally signed, time-stamped, and processed through a licensed e-contract service provider that transmits the file to the national platform within 24 hours. Foreign workforce management also moved online via Decree No. 219/2025, which took effect on August 7, 2025, replacing Decree No. 152/2020. Employers now submit a single combined application through the National Public Service Portal to the provincial people’s committee between 10 and 60 days before an employee starts, with authorities issuing a decision within 10 working days. Furthermore, Decree No. 293/2025 established new regional minimum wages on January 1, 2026, ranging from VND5.31 million (USD210) monthly in region I down to VND 3.7 million in region IV.
Strict Procedures Govern Termination and Internal Labour Rules
Employers face strict statutory limitations on termination and discipline, as unilateral dismissals require specific legal grounds and adherence to precise procedures. Authorized termination grounds include repeated failure to perform duties under a formal appraisal process, prolonged illness, force majeure, or restructuring, alongside unauthorized absences of five cumulative days in a month. Disciplinary dismissal requires the statutory hearing procedure with union participation. Unlawful terminations carry heavy financial penalties: the employer must reinstate the employee, pay wages and insurance for the whole period out of work plus at least two months’ salary in compensation. If reinstatement is impossible or refused, additional compensation of at least two months’ salary applies, and severance remains due. Internal labour rules (ILRs) frequently dictate the outcome of these disputes, requiring formal drafting, consultation with the employee representative organisation (where one exists), and communication to employees.
Courts Test Non-Compete Clauses Against Constitutional Employment Rights
Non-compete agreements barring departing staff from joining competitors for one to two years face legal uncertainty as Vietnamese law lacks explicit statutory regulation for them outside of Article 21.2 of the Labour Code. While first-instance courts remain split on awarding damages for breaches, Draft Precedent No. 33/2026 signals a shift by relying on Appellate Judgment No. 03/2023 of 10 January 2023. In that case, the People’s Court of Thanh Hoa province rejected a technology company’s VND251.8 million claim against a technician who joined a refinery operator within his 12-month restricted period, ruling the clause void under constitutional freedoms to choose employment. Although the draft awaits final adoption by the Council of Judges and publication by the Chief Justice, employers are advised to rely on controlling what departing staff take.
Personal Data Protection Law Imposes Strict Compliance Penalties
The Law on Personal Data Protection 2025 (PDPL), effective from 1 January 2026 and guided by Decree No. 356/2025, elevated Vietnam’s data protection regime from decree to statute. Organisations must obtain clear, verifiable consent without default consent such as pre-ticked boxes.
Keep reading