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Labor Law Guide for Retail Chains and F&B

16 min readFLAT LAW FIRM
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Labor Law Guide for Retail Chains and F&B: The Most Common Mistakes

A 40-store coffee chain can employ up to 600 people — mostly young shift workers coming and going constantly. At that scale, a seemingly small mistake — a missing contract, miscalculated Tet overtime, unpaid social insurance for part-time staff — multiplied across hundreds of people becomes a fine and arrears bill big enough to keep management awake at night. This article is a hands-on legal guide for retail and F&B chain operators: it goes straight to the points most often gotten wrong, with the specific legal bases to check against.

Contents

Retail and F&B have four workforce traits that push legal risk above the average. First, high turnover: servers, cashiers and baristas are typically young, stay briefly, and a single store can replace 10–20% of its staff each month. Second, shift work: morning, afternoon, split and weekend night shifts — scheduling and timekeeping are complex, and overtime is easy to miscalculate. Third, large part-time and seasonal headcount: students working 4 hours a day, extra hands for holidays and Tet, delivery teams. Fourth, multi-location networks: a chain may span several provinces with one manager per store, yet ultimate legal liability stays with the legal entity that signs the labor contracts.

The result is four violation groups that repeat in inspection after inspection: concluding the wrong type of labor contract; breaching overtime limits; failing to pay or underpaying social insurance; and failing to issue internal labor regulations. Grasping these four traits helps management see that the problem is not at any single store but in centralised HR governance — standard contract templates, scheduling procedures, social insurance processes and internal regulations must be uniform across the chain.

2. Choosing the right type of labor contract from day one

The first point to settle firmly: the 2019 Labor Code no longer recognises "seasonal contracts" or "short-term contracts". Article 20 recognises only two types of labor contracts: fixed-term and indefinite-term. Any other label — collaborator agreement, service contract, piecework contract — will still be treated as a labor contract by authorities and courts if its substance is an employment relationship (working under the management, direction and supervision of one party in exchange for wages), whatever name the parties give it.

Practical recommendations for the sector:

  • Employees working under one month (a few extra days over Tet): the parties may conclude the contract verbally; probation does not apply here (Article 24(3)). Even so, keep a written confirmation of duties, wage rates and working time to avoid disputes.
  • Part-time staff on fixed shifts of one month or more: sign a fixed-term labor contract stating working hours clearly (e.g. 4 hours/day, 6 days/week), hourly or monthly wage, and workplace (a specific store, or "stores of the system in Ho Chi Minh City" if rotated).
  • A fixed-term contract may be signed at most twice; if the employee keeps working afterwards, an indefinite-term contract must be signed (Article 20). Many chains breach this: renewing a 12-month contract a third or fourth time. A wrongly-typed contract remains valid, but the employer faces sanctions.
  • Do not use service contracts to dodge labor contracts for servers, cashiers or baristas working regular shifts arranged by the store. In a dispute, the court looks at the substance of the work, not the contract's title.

One note for the franchise model: staff at a franchised store contract with the franchisee, not with the chain owner — unless agreed otherwise. The chain owner should draw this boundary clearly in the franchise agreement to avoid joint labor liability.

3. Probation: short, lawful, and in writing

Constant hiring means constant probation. Articles 24–27 of the 2019 Labor Code set a clear framework:

  • Maximum probation periods (Article 25): no more than 180 days for enterprise managers; 60 days for jobs requiring college-level qualifications or higher; 30 days for intermediate-level, technical workers and professional staff; and no more than 6 working days for other jobs. Most in-store positions — servers, cashiers, security guards, cleaners, kitchen assistants — fall into "other jobs", i.e. a maximum of 6 working days. A one- to two-month probation for a server is a violation.
  • Only one probation per job. Rehiring a former employee for the same position means no second probation.
  • Probation pay is agreed by the parties but must be at least 85% of the wage for that job (Article 26).
  • During probation, either party may cancel the probation agreement or the concluded labor contract without prior notice and without compensation (Article 27(2)). This is a "safety valve" for both sides, but it also means the employer cannot bind a probationary employee with a penalty clause for leaving mid-probation.
  • At the end of probation, the employer must notify the employee of the result; if requirements are met, performance continues or a labor contract is concluded, otherwise the relationship ends (Article 27).

Good practice for chains: standardise one "probation agreement" clause inside the labor contract (instead of a separate probation contract) to cut paperwork; attach a probation assessment checklist for store managers; and never stretch probation by chaining multiple rounds.

4. Working hours and peak-season overtime

Tet, public holidays and the back-to-school season are retail and F&B's peak seasons — and also the seasons with the most overtime violations. The legal framework sits in Article 107 of the 2019 Labor Code:

  • Overtime requires the employee's consent on the time, place and overtime work (Article 59 of Decree 145/2020/ND-CP). Forcing staff to stay overtime when they do not agree is a violation, except for the special cases in Article 108 (disaster and fire prevention, etc.).
  • Hard caps: no more than 50% of normal working hours in one day; total normal plus overtime hours no more than 12 in one day (where weekly working time applies); no more than 40 hours in one month; no more than 200 hours in one year.
  • Retail and F&B are not on the list of sectors permitted up to 300 overtime hours per year (the Article 107(3) list covers textiles, footwear, electronics, agro-forestry-fishery processing and certain other specific sectors).

For a multi-store chain, the answer is not pleading with inspectors but governing shifts from the start: build seasonal headcount norms (add headcount in peak season instead of adding hours to existing staff); use centralised timekeeping and scheduling software that flags when an employee approaches 40 hours/month; and keep the employees' written overtime consent on file.

On overtime pay (Article 98): at least 150% on normal days, 200% on weekly rest days, 300% on public holidays and Tet. Night overtime adds further premiums. Miscalculating overtime rates for hundreds of employees over months becomes a sizeable arrears bill once complaints arise.

5. Wages, bonuses, allowances: pay correctly and in full

Wages are the second most common trigger of disputes after contract termination. Points to lock down in a chain's pay system:

  • Regional minimum wage: contract wages must not fall below the Government's annually published regional minimum. A chain with stores in several regions (Region I in Ho Chi Minh City and Hanoi; Regions II, III, IV in the provinces) must apply each locality's rate — not one blanket rate for the whole system.
  • Pay periods: hourly, daily or weekly earners are paid after the hour, day or week worked, or as agreed but at least once every 15 days; monthly earners are paid monthly or twice monthly (Article 94). Late payment accrues statutory interest.
  • Tet bonuses and sales bonuses: bonuses are decided by the employer based on business results (Article 104), but once a bonus policy is published (e.g. 13th-month pay, quarterly KPI bonuses), it becomes a commitment to honour. Many F&B Tet bonus disputes start with vaguely written bonus policies and verbal promises.
  • Wage deductions: allowed only for compensation of damage to tools or equipment (Article 102), capped at 30% of the monthly wage actually paid after mandatory insurance and personal income tax. Fining employees or docking pay as a substitute for labor discipline is prohibited.

6. Social insurance for part-time and seasonal staff

This is where many chains are most complacent. Under the 2024 Law on Social Insurance (No. 41/2024/QH15, effective 1 July 2025), anyone working under a labor contract of at least one full month falls under compulsory social insurance — no distinction between full-time and part-time, or between 8 hours and 4 hours a day. A part-time employee on a 6-month contract working 4 hours a day must still be insured.

Some real-life scenarios:

  • Students working the 3 summer months: a 3-month fixed-term contract means 3 months of social insurance contributions. For flexibility, could the chain sign contracts under one month and renew them? The law does not prohibit chaining multiple sub-one-month contracts, but where the substance is a stable employment relationship, the social insurance agency may assess arrears. The cleanest approach is to contribute properly.
  • Contribution base: the monthly salary stated in the contract, not lower than the regional minimum wage. For hourly pay, convert to the corresponding monthly salary as the contribution base.
  • Household business owners: the 2024 Law on Social Insurance (Article 2) brings owners of registered household businesses into compulsory social insurance on a Government roadmap: from 1 July 2025 it applies first to households declaring tax; the remaining groups join on a phased roadmap through 1 July 2029. Family-run eateries and shops should follow the specific guidance of their local social insurance authority.
  • Consequences: non-payment, underpayment or misappropriation of social insurance funds is sanctioned under Decree 283/2026/ND-CP and may lead to criminal prosecution for evasion of social insurance contributions under the Penal Code in cases of fraud involving large amounts.

7. Internal labor regulations and discipline: a manager's shield

From 10 employees upward, an employer must issue written internal labor regulations (Article 118). For a chain of dozens of stores, the regulations are an indispensable management tool — but they only work when issued through the proper procedure: consulting the grassroots employee representative organisation (if any), notifying each employee, posting publicly at the workplace, and registering with the specialised labor authority.

A retail/F&B chain's regulations should be tailored to the sector:

  • Working and rest time by shift; rules on lateness, early leave and shift swaps.
  • Uniform, service conduct, recipe confidentiality, food hygiene procedures.
  • Violations and corresponding disciplinary forms — the basis for later discipline.

On labor discipline (Articles 125–127): only 4 forms may be applied (reprimand; wage-rise deferral of no more than 6 months; demotion; dismissal); each violation is subject to only one form; a disciplinary hearing must be convened with the full required attendees under Article 122(1) (employer, employee and the grassroots employees' representative organisation), with at least 5 working days' notice (Article 70 of Decree 145/2020/ND-CP), and minutes recorded; the limitation period is 6 months (12 months in certain special cases). Dismissal applies only to the serious acts listed in Article 125: theft, embezzlement, gambling, intentional injury, drug use at the workplace; disclosure of business or technology secrets; or reoffending during an unexpunged wage-rise deferral/demotion.

F&B in practice often sees staff "ghosting" shifts on holidays, cash-register revenue fraud, or smuggling ingredients out. To act on these, the regulations must describe the acts and their disciplinary forms in advance; without regulations, lawful dismissal is nearly impossible, and an unlawful dismissal decision can be annulled by the court, forcing reinstatement and compensation.

8. Food safety and employee health

F&B chains carry an extra layer of duties that pure retail chains do not: food safety. Persons directly preparing or trading food must have periodic health checks, food safety knowledge and personal and premises hygiene practices under the 2010 Law on Food Safety and Decree 15/2018/ND-CP. When a joint inspection team visits a restaurant, the first two documents they usually ask for are the health certificates of food handlers and their food safety knowledge confirmations.

From the labor angle, employers must ensure safe, hygienic working conditions, provide personal protective equipment, and organise periodic health checks for employees. Hot kitchens, grease, knives and cleaning chemicals are a hazardous environment — risk assessment and occupational safety training are needed, especially for young, newly hired workers.

9. Terminating contracts: do it right to avoid being sued back

High turnover means constant termination and rehiring. Three lawful scenarios must be kept clearly apart:

  • Contract expiry: notify the employee in writing when the contract terminates upon expiry (Article 45 of the 2019 Labor Code). Note: unlike the former 2012 Labor Code (Article 47), the current law does not set a minimum advance notice period — but the employer should notify early to arrange handover and replacement hiring. Forget the notice and let the employee keep working after expiry without a new contract — a fixed-term contract turns into an indefinite-term one.
  • Employee's unilateral termination: current law allows employees to terminate unilaterally without cause, with proper notice only (45 days for indefinite-term contracts; 30 days for fixed-term contracts of 12–36 months; 3 working days for contracts under 12 months — Article 35). Chains need a fast handover, payroll settlement and social insurance book closure process so departing staff do not leave files "hanging".
  • Employer's unilateral termination: only in the Article 36 cases (regular failure to complete work; long-treated illness; natural disaster, fire, pandemic; contract expiry, etc.), with prior notice, and never in the prohibited cases of Article 37 (employees under medical treatment, on maternity leave, in temporary detention, etc.).

On lawful termination, the employer must settle all employee entitlements within 14 working days (extendable but no more than 30 days in special cases), and close and return the social insurance book. Severance allowance (Article 46) and job-loss allowance (Article 47) apply depending on the case — calculate correctly to avoid collective complaints, which ignite easily among young staff connected through social media.

10. Sanctions for violations: the price of complacency

Decree 283/2026/ND-CP sets fines that scale with the number of affected employees — meaning a system-wide breach across the chain is fined at the top bracket. Typical acts:

  • Concluding the wrong type of labor contract: fined per headcount, rising to a maximum of VND 25 million for individuals and VND 50 million for organisations at the top of the scale (Article 9; organisational fines are twice the individual level under Article 7(1) of Decree 283/2026/ND-CP).
  • Failing to pay compulsory social insurance or paying on the wrong base: fines plus orders to pay arrears of social, health and unemployment insurance.
  • Overtime violations: fined per headcount and excess hours.
  • Failing to issue internal labor regulations when using 10 or more employees: fines plus an order to issue them.

Beyond fines, employers face remedial measures: orders to pay outstanding wages and overtime; to conclude proper contracts; to pay social insurance arrears — and more importantly collective dispute risk and strikes when many employees are affected together. For retail and F&B chains — sectors where the brand is tied to the customer experience — a labor scandal spreading on social media can cost far more than any fine.

Frequently Asked Questions

Can a retail or F&B chain sign seasonal contracts with staff? The concept of a seasonal contract no longer exists under the 2019 Labor Code. Only two types remain: fixed-term and indefinite-term labor contracts (Article 20). For employees working under one month, the parties may conclude the contract verbally and probation does not apply (Article 24(3)). For longer seasonal staffing needs, sign a proper fixed-term contract instead of disguising the relationship as a service contract.

Must social insurance be paid for a part-time employee working 4 hours a day? Yes, if the employee signs a labor contract of at least one full month, they fall under compulsory social insurance — regardless of full-time or part-time status (2024 Law on Social Insurance, No. 41/2024/QH15, effective 1 July 2025). Contributions are based on the monthly salary stated in the contract, but not lower than the regional minimum wage.

In peak season, what is the maximum overtime an F&B employee may work? No more than 40 hours in one month and no more than 200 hours in one year, and no more than 50% of normal working hours in one day (Article 107(2)(b)–(c) of the 2019 Labor Code). Retail and F&B are not among the sectors permitted up to 300 overtime hours per year. All overtime requires the employee's consent (Article 59 of Decree 145/2020/ND-CP).

What is the maximum probation period for servers and cashiers? No more than 6 working days for jobs not requiring professional or technical qualifications (Article 25(4) of the 2019 Labor Code) — this covers most server, cashier, security and cleaning positions. Probation pay is agreed by the parties but must be at least 85% of the wage for that job (Article 26). During probation, either party may cancel without prior notice and without compensation (Article 27(2)).

Must a store with 10 or more employees issue internal labor regulations? Yes. An employer using 10 or more employees must issue written internal labor regulations (Article 118 of the 2019 Labor Code). For a chain with many stores, one set of regulations for the whole system should be issued and registered with the provincial-level labor authority where the head office is located.

Must kitchen and bar staff undergo health checks and food safety training? Yes. Persons directly preparing or trading food at catering establishments must have periodic health checks and food safety knowledge under the 2010 Law on Food Safety and Decree 15/2018/ND-CP. These are the first documents health inspectors ask for when inspecting a restaurant.

What is the fine for not signing labor contracts with retail staff? Under Decree 283/2026/ND-CP on administrative sanctions in the labor and social insurance sector, failure to conclude the correct type of labor contract is fined per number of affected employees, on a rising scale up to a maximum of VND 25 million for individuals and VND 50 million for organisations (Article 9; organisational fines are twice the individual level under Article 7(1) of Decree 283/2026/ND-CP). The employer is also ordered to conclude proper contracts and pay arrears of social insurance.

When to work with counsel

Labor governance for a retail/F&B chain is a systems problem: one standard contract template set, one chain-wide set of regulations, one scheduling process — one social insurance payment process applied uniformly across dozens of stores. Work with counsel when expanding the chain (standardising all HR files before replicating the model), when facing labor or social insurance inspections, when collective disputes or mass complaints arise, and when restructuring (mergers, franchising, model conversion) changes the employer entity of hundreds of employees.

FLAT Law Firm supports retail and F&B chains in chain-wide labor compliance reviews, drafting regulations and rules, and handling disputes. Contact our hotline at 0988424851 for advice tailored to your model.

References

  1. Labor Code No. 45/2019/QH14 dated 20/11/2019, effective 01/01/2021 (Articles 20, 24–27, 98, 107, 112, 113, 118, 125–127).
  2. Decree No. 145/2020/ND-CP dated 14/12/2020 detailing and guiding the Labor Code (Articles 59, 70).
  3. Decree No. 283/2026/ND-CP dated 15/07/2026 on administrative sanctions in labor, social insurance and Vietnamese employees working abroad under contracts.
  4. Law on Social Insurance No. 41/2024/QH15 dated 29/6/2024, effective 01/7/2025 (Article 2).
  5. Law on Food Safety No. 55/2010/QH12 and Decree No. 15/2018/ND-CP detailing the Law on Food Safety.