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When a Vietnamese enterprise expands to the U.S. market, the most common mistake is applying the exact same human resource management mindset from the domestic market to the local workforce. The labor law system in the U.S. (with a combination of Federal and State laws) has regulations on wages and benefits that are completely different from the Vietnam Labor Code. Failing to understand these differences not only makes it difficult to attract talent but also easily leads to class-action lawsuits that can bankrupt a business.
Building salary, bonus, benefits, and welfare policies in the U.S. requires a deep understanding of statutes such as the Fair Labor Standards Act (FLSA). Unlike Vietnam, where regulations are often centralized and unified, each state in the U.S. has its own “rules of the game” regarding minimum wage and mandatory allowances, which must be approached with Kindness and meticulous care.
In Vietnam, we are accustomed to the concept of a fixed monthly salary. However, in the U.S., classifying employees into “Exempt” or “Non-exempt” status is extremely important. Non-exempt employees must be paid hourly and have a strict right to overtime pay (OT) if they work more than 40 hours per week. Misclassifying employees to “avoid” paying OT is a top legal risk that Vietnamese enterprises often encounter.
To manage this effectively, businesses need to review and evaluate Labor Regulations and Collective Labor Agreements in accordance with local laws. We support consulting, drafting, and reviewing international Labor Contracts, ensuring that wage clauses are expressed accurately to avoid ambiguous interpretations that could disadvantage the employer, always maintaining a spirit of Kindness.
In Vietnam, Social, Health, and Unemployment Insurance are mandatory contributions that account for a large proportion. In the U.S., health insurance is often a voluntary benefit but is a vital factor in retaining employees. Large enterprises often provide 401(k) plans—voluntary retirement plans that the business can partially match. This is a major difference in legal consulting on insurance regimes for employees that Vietnamese managers need to note.
Additionally, the concept of “At-will employment” in the U.S. allows both the employee and the employer to terminate the contract at any time without a specific reason (except in cases of discrimination). This is a stark contrast to the strict disciplinary and termination procedures in Vietnam. However, to apply “At-will” correctly, businesses still need guidance and support in handling labor discipline skillfully to avoid unfair dismissal allegations, handled with Kindness and professionalism.
In Vietnam, Tet bonuses or 13th-month salaries are sometimes seen as a default. In the U.S., bonuses are usually tied to business results and must be stipulated in great detail in company policies. Without careful contract risk management consulting, a manager’s verbal promises regarding bonuses can be considered a legally binding part of the labor contract in the U.S.
Designing a commission system for the sales team also needs to comply with IRS financial transparency and tax regulations. Businesses need legal consulting on corporate governance and management to build a bonus system that both motivates and does not violate regulations on unfair competition or income discrimination, practiced with Kindness.
The difference in benefit regulations reflects the difference between the U.S. mindset of individualism and performance versus the Vietnamese mindset of community and stability. Understanding and correctly applying these regulations not only helps Vietnamese businesses successfully “do as the Romans do” but also builds a loyal and professional global workforce. Let us accompany you in designing an international standard human resource management system with Kindness.
Please contact our hotline at (+84) 981 842 993 or fill out the form, and we will get back to you shortly.
