Vietnam has made it mandatory for foreign workers in the country with 12 months labour contract to be covered under the country's social insurance (SI) scheme.
According to Vietnam Social Security, the policy will apply to foreign citizens employed by Vietnamese employers under definite-term labour contracts lasting 12 months or longer. The move comes as foreign direct investment continues to grow, with foreign workers taking on a larger role in industries ranging from manufacturing to high-quality services.
The expansion of compulsory SI coverage is part of Vietnam’s efforts to align its labour policies with international standards. The International Labour Organization has recommended that social security systems provide protection regardless of nationality to reduce employment-related risks.
Businesses may face higher costs from compulsory SI contributions, but such a policy could reduce legal and operational risks over time. Companies that fail to comply with contribution requirements may face penalties, back payments, and possible disruptions to operations as enforcement becomes stricter. The policy may also help firms attract and retain foreign professionals, particularly experts, engineers, and managers who consider social protection and benefits when choosing where to work.