Compensation Provisions in the Labor Framework of the USA and Implications for Vietnam

Compensation for damages in labor relations plays an important role in ensuring the rule of law, social security and fairness in a market economy. This article will analyze the foundation and mechanism of compensation for damages in Vietnamese labor law, with a comparison to the United States – a typical model of the common law system. Based on the comparison of the two different models of labor laws, the differences in the philosophy of the two systems – one focusing on individual responsibility, materialization, and deterrence through punitive measures of compensation and labor insurance, and the other focusing on the distribution of social risks and workers’ protection through mandatory social insurance – will be clarified. Based on the comparison of the two different models of labor laws, the differences in philosophy, scope of compensation, and enforcement will be clarified. Based on the findings of the comparative study, recommendations will be proposed to improve Vietnamese labor law to establish a “fair and effective” labor compensation mechanism, consistent with the socialist orientation and the trend of international integration.