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Vietnam’s 2024 New Social Insurance Law – Important Updates for Businesses

Key New Provisions of the 2024 Social Insurance Law
Main Contents

The Vietnamese government has officially passed the 2024 Social Insurance Law. It’s bringing with it one of the most comprehensive reforms to labor and social insurance regulations. The law will come into effect on July 1, 2025. The new Law mandates broader participation, the distribution of benefits, and enforces stricter penalties for non-compliance.

These changes will have direct implications for both local and foreign-invested companies operating in Vietnam. This article will review the new law and summarize the key updates below to help you prepare.

Social Insurance Now Covers More Employee Groups

The new law redefines which Vietnamese employees fall under mandatory social insurance coverage, significantly expanding its scope. Under the Claude 1 Article 2 of the new law:

People working under indefinite-term employment contracts, employment contracts with terms of at least 01 month, even if they are referred to by other names by the employers and employees, as long as they specify the job, salary, remuneration, and the management of one party;

Key New Provisions of the 2024 Social Insurance Law
Key Provisions of the 2024 Social Insurance Law

Under the current rules, employees on probation are not required to join compulsory social insurance. However, the new Social Insurance Law changes this.

Starting July 1, 2025, a probationary contract will be treated as a labor contract. This is because it includes key elements such as job description, salary, benefits, and employer supervision. As a result, probationary employees will participate in compulsory social insurance.

Additionally, managers, directors, vice directors, comptrollers, and similar executive positions will now participate the social insurance—even if they do not receive a salary.

From July 1, 2025, foreign employees with a contract of 12 months or more must participate in Vietnam’s social insurance system. This applies whether or not they have a work permit. Exemptions apply in specific cases such as:

a) Internal transfers within the enterprise in accordance with the regulations on foreign workers working in Vietnam;

b) At the time of entering into the labor contract, the worker has reached the retirement age;

c) International treaties of which the Socialist Republic of Vietnam is a member contain different provisions

Stricter Rules for Lump-Sum Social Insurance Withdrawals
Current Policy for Lump-Sum Withdrawal (Before July 1, 2025)

Under the current law, Vietnamese employees who leave the workforce and do not participate in social insurance for 12 months can apply for a lump-sum withdrawal if they have not reached the 20-year contribution threshold. However, this will no longer be the case for new contributors.

New Conditions for Lump-Sum Withdrawal from July 1, 2025

Starting July 1, 2025, individuals who stop participating in social insurance can receive a lump-sum social insurance benefit upon request, if they meet one of the following conditions:

a) Have reached the retirement age but have not completed 15 years of social insurance contributions.

In this case, if the employee does not opt for a lump-sum social insurance benefit, they may choose to receive a monthly allowance.

b) Permanently relocate abroad;

c) Suffer from one of the following illnesses: cancer, paralysis, decompensated cirrhosis, severe tuberculosis, or AIDS;

d) Have a working capacity reduction of 81% or more, or are classified as persons with particularly severe disabilities;

đ) Employees who had periods of social insurance contributions before the effective date of this Law, who, after 12 months, are no longer subject to compulsory social insurance and have not opted for voluntary social insurance, and have less than 20 years of contributions;

e) Persons specified at Points d, đ, and e, Clause 1, Article 2 of this Law who are discharged, demobilized, or resign and are no longer eligible for compulsory social insurance participation and have not opted for voluntary social insurance and do not meet the conditions for pension entitlement.

Those who start contributing to social insurance after July 1, 2025 will no longer be eligible to withdraw their social insurance benefits based on the conditions of (1) having stopped contributing for 12 months (ceased working for one year) and (2) having contributed for less than 20 years (without completing 20 years of social insurance contributions).

Lump-Sum Withdrawal for Foreign Employees

For foreign employees, the lump-sum withdrawal policy remains largely unchanged.

Workers whose work permits expire or whose contracts are terminated can apply for social insurance withdrawal within 10 days, as long as they are no longer working or renewing their permits.

Other Key Changes in Vietnam’s Social Insurance Law
Pension Eligibility Period Shortened

The government has reduced the minimum contribution period for pension eligibility from 20 years to 15 years. This move aims to increase access to retirement benefits, particularly for workers with shorter employment histories.

Retirement Age Adjustment

The official retirement age is gradually increasing. Under the 2019 Labor Code roadmap, male workers must retire at 62 and female workers at 60.

New Maternity Allowance

The state budget now provides a fixed maternity allowance of 2 million VND per child for voluntary social insurance participants, without requiring extra contributions.

Social Pensions Paid Earlier

Elderly individuals will now receive social pension allowances earlier. Authorities have lowered the eligible age for support from 80 to 75, and even to 70 for individuals from poor or near-poor households.

Sick Leave Policy Updated

The law has revised the sick leave policy under Vietnam’s social insurance program. Employees taking half-day sick leave now receive half the regular allowance, while they will recalculate the long-term sick leave based on work conditions and insurance history.

Supplementary Pension Allowance Introduced

Vietnam has introduced a new supplementary pension allowance for individuals who fall short of retirement conditions. These individuals will still receive a monthly allowance and health insurance coverage from the state.

Lastly, the new regional minimum wage, effective January 1, 2025, is as follows:

Region Minimum Monthly Salary
Region I 4,960,000 VND
Region II 4,410,000 VND
Region III 3,860,000 VND
Region IV 3,450,000 VND

VNBG Will Update the Latest News to You

As Vietnam continues to modernize its legal system to match a rapidly evolving economy, the government has introduced major legal reforms. These aim to improve the business environment, protect workers’ rights, and strengthen the country’s social security system.

One key step is the updated Social Insurance Law. This new law brings significant changes that all employers in Vietnam need to prepare for.

Although the law has already been passed, some practical details remain unclear. Several regulations are still ambiguous, and businesses are waiting for further guidance. After July 1, 2025, we expect the government to release detailed implementation guidelines through official circulars and decrees.

To stay compliant, businesses should closely monitor legal updates and be ready to adjust their HR policies and employment practices.

At VNBG, we help businesses stay up to date with Vietnam’s evolving labor and social insurance regulations. Our team continues to provide timely insights and legal updates through our blog.

In the meantime, we also offer the following services:

  • Reviewing employment contracts to ensure compliance
  • Consulting on social insurance obligations
  • Advising on HR practices and labor policy in Vietnam

If you’re considering revising your labor contracts, updating employee policies, or simply have questions about your company’s compliance under the new social insurance law, don’t hesitate to reach out. Our experienced consultants are ready to offer free expert advice to help you stay compliant.

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