Vietnam: Is the employer entitled to give employees compensatory leave in lieu of having to pay overtime wages during public holidays to employees?
- When is the employee entitled to compensatory leave in accordance with current Vietnamese regulations?
- Are employers entitled to give employees compensatory leave in lieu of having to pay overtime pay during public holidays in Vietnam?
- Will an employer be penalized for not paying overtime pay on a public holiday in Vietnam?
When is the employee entitled to compensatory leave in accordance with current Vietnamese regulations?
Pursuant to Clause 3, Article 111 of the Labor Code in 2019 stipulates weekly leave:
Article 111. Weekly breaks
1. Each week an employee is entitled to a break of at least 24 consecutive hours. Where it is impossible for the employee to have a weekly day off due to the work cycle, the employer has the responsibility to ensure that on average the employee has at least 04 days off per month.
2. The employer has the right to determine and schedule the weekly breaks either on Sunday or for another fixed day in a week, which must be recorded in the internal labor regulations.
3. In case a public holiday falls on an employee’s weekly break coincide with a public holiday as prescribed in Clause 1 Article 112 of this Labor Code, he/she will have compensatory time-off on the next working days.
Thus, employees will be entitled to compensatory leave after overtime and compensatory leave if the holiday coincides with a public holiday or Tet holiday.
Vietnam: Is the employer entitled to give employees compensatory leave in lieu of having to pay overtime wages during public holidays to employees?
Are employers entitled to give employees compensatory leave in lieu of having to pay overtime pay during public holidays in Vietnam?
According to clause 1, Article 98 of the Labor Code in 2019 stipulates:
Article 98. Overtime pay, night work pay
1. An employee who works overtime will be paid an amount based on the piece rate or actual salary as follows:
a) On normal days: at least 150%;
b) On weekly days off: at least 200%;
c) During public holidays, paid leave, at least 300%, not including the daily salary during the public holidays or paid leave for employees receiving daily salaries.
Accordingly, when an employee works overtime on a public holiday, the employer must pay the overtime wage to the employee at least equal to 300% of the salary of the normal working day, not including the salary of the public holiday as prescribed by the Labor Code.
Therefore, it is against the law for employers to arrange compensatory leave instead of paying overtime wages during public holidays. Employers must still pay overtime wages of at least 300%.
Will an employer be penalized for not paying overtime pay on a public holiday in Vietnam?
Pursuant to Clause 2, Article 17 of Decree 12/2022/ND-CP stipulates:
Article 17. Violations against regulations on salaries
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2. The following fines shall be imposed upon an employer for commission of one of the following violations: Failing to pay salaries on schedule as prescribed by law; failing to pay or insufficiently paying salaries to employees as agreed in their employment contracts; failing to make or insufficiently making overtime pay; failing to make or insufficiently making nightshift pay; failing to pay or insufficiently paying work suspension allowances as prescribed by law; restricting or interfering employees’ spending of their salaries; forcing employees to spend their salaries on goods or services of the employer or any particular providers decided by the employer; deducting from employees’ salaries in breach of law; failing to pay or insufficiently paying salaries to employees how are reassigned to perform works which are not specified in their employment contracts or during a strike; failing to make or insufficiently making payments to employees who, due to employment termination or job loss, have not taken or not entirely taken up their annual leave in compensation for their untaken leave days; failing to make or insufficiently making advance payments to employees who temporarily leave their works in accordance with regulations of law; failing to pay full salaries to employees who are not disciplined for their work suspension period:
a) A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 01 - 10 employees;
b) A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed if the violation involves 11 - 50 employees;
c) A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 51 - 100 employees;
d) A fine ranging from VND 30.000.000 to VND 40.000.000 shall be imposed if the violation involves 101 - 300 employees;
dd) A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed if the violation involves 301 employees or more.
3. The following fines shall be imposed upon an employer for paying their employees salaries which are lower than the statutory minimum wages announced by the Government:
a) A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 01 - 10 employees;
b) A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed if the violation involves 11 - 50 employees;
c) A fine ranging from VND 50.000.000 to VND 75.000.000 shall be imposed if the violation involves 51 employees or more.
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a) The employer that commits the violation specified in Clause 2 or Clause 3 of this Article is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
b) The employer that commits the violation specified in Clause 4 of this Article is compelled to pay full amounts of money equal to total sums of compulsory social insurance, compulsory health insurance, and unemployment insurance premiums payable plus interests on such amounts, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
For the employer's failure to pay overtime wages on public holidays, depending on the seriousness of the violation, various penalties will be imposed but not exceeding VND 75 million, and the employer must pay the full salary plus the interest of the late payment amount, underpayment to employees calculated according to the highest interest rate on demand deposits announced by state commercial banks at the time of sanction.
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