What are the regulations on calculating overtime pay in Vietnam?

Hello, Lawnet would like to answer as follows:

1. What are the regulations on salary payment forms in Vietnam?

The forms of salary payment prescribed in Article 96 of the Labor Code 2019 is guided by Article 54 of Decree 145/2020/ND-CP as follows:

- The form of salary payment shall be specified in the employment contract on the basis of consensus between the employer and the employee. To be specific:

+ Time-based salary shall be paid to the employee monthly, weekly, daily or hourly as agreed in the employment contract. To be specific:

++ Monthly salary is the salary for a month’s work;

++ Weekly salary is the salary for a week’s work. In case monthly salary is specified in the employment contract, the weekly salary equals (+) the monthly salary multiplied by (x) 12 months and divided by (:) 52 weeks;

++ Daily salary is the salary for a days’ work. In case monthly salary is specified in the employment contract, the daily salary equals (+) the monthly salary divided by (:) the number of normal working days in a month as decided by the employer. In case weekly salary is specified in the employment contract, the daily salary equals (+) the weekly salary divided by (:) the number of working days in a week as specified in the employment contract;

++ Hourly salary is the salary for an hour’s work. In case monthly, weekly or daily salary is specified in the employment contract, the hourly salary equals (+) the daily salary divided by (:) the number of normal working hours in a day as prescribed by Article 105 of the Labor Code 2019.

+ Piece rate pay is paid to piece workers according to the quantity and quality of products, productivity norms and unit prices of the products.

+ Fixed salary is paid according to the quantity and quality of works and time needed for completion of these works.

- Payment of salaries in the forms specified in Clause 1 of Article 54 of Decree 145/2020/ND-CP shall be made transferred to the employees’ bank accounts. In the latter case, the employers shall pay the fees for opening accounts and transferring salaries.

Thus, according to the above regulations, the salary per working day is calculated as follows:

- In case the labor contract agrees on monthly salary (According to the law, the month has 26 working days)

For example: The labor contract agrees that employee A's monthly salary is 10 million VND/month.

So A's daily salary is determined + Monthly salary/Number of working days in the month + 10 million VND/26 days + 384,615 VND/day.

+ If the month has less than 26 working days, the daily wage will be calculated based on the actual number of working days.

- In case the labor contract agrees on a weekly salary:

For example: the labor contract agrees that the weekly salary of employee B is 2 million VND/week.

The number of working days in a week is 5 days.

So B's daily salary is determined + Weekly salary/Number of working days in the week + 2 million VND/5 days + 400,000 VND/day.

2. What are the regulations on calculating overtime pay in Vietnam?

Overtime pay prescribed in Clause 1 Article 98 of the Labor Code 2019 and guided by Article 55 of Decree 145/2020/ND-CP as follows:

- An employee receiving time-based salaries will receive overtime pay for working outside of the normal working hours prescribed in Article 105 of the Labor Code 2019 shall be calculated as follows:

Where:

+ Hourly salary in a normal working day (hereinafter referred to as “normal hourly salary”) is the actual salary of the work in the month or week in which the employee works overtime (excluding overtime pay, night work pay, salary of public holidays and paid leave prescribed by the Labor Code; bonuses prescribed in Article 104 of the Labor Code 2019; rewards for innovation; mid-shift meal allowance, allowances for travel, communication, housing, daycare, infant care; financial assistance upon death or marriage of a family member, the employee’s birthday, occupational diseases, other allowances and benefits that are not relevant to the performance of the works or position specified in the employment contract) divided by (:) the total number of working hours of the same month or week, which must not exceed the number of normal working days of a month and normal working hours of a day or a week as decided by the enterprise, excluding overtime hours;

+ At least 150% of the normal hourly salary in case of overtime work on normal days; at least 200% of the normal hourly salary in case of overtime work during weekly breaks; at least 300% of the normal hourly salary in case of overtime work during public holiday or paid leave, excluding the daily salary during public holidays or paid leave in case the employee receives daily salary.

- Employees receiving piece rate pay will be receive overtime pay for working outside of the normal working hours in order to increase the quantity or volume of products according to the productivity norms under agreement with the employer. Overtime pay will be calculated as follows:

In there:

Where:

+ At least 150% of the normal piece rate in case of overtime work on normal days;

+ At least 200% of the normal piece rate in case of overtime work during weekly breaks;

+ At least 300% of the normal piece rate in case of overtime work during public holidays or paid leave.

- Employees that work overtime during public holidays that are also weekly breaks will receive the overtime pay for working during public holidays. 

Note: Employees that work overtime on compensatory days off that are also weekly breaks will receive the overtime pay for working during weekly breaks.

Thus, the above regulation aims to avoid the situation of forcing employees to work overtime without being paid properly while protecting employees and creating favorable conditions for businesses, ensuring the rights of both.

Best regards!

Please Login to be able to download