Vietnam: Are enterprises required to give Tet bonuses to employees?

Tet bonus is the amount of money employees are rewarded based on the annual production and business results and the employee's job completion level. So, is Tet bonus compulsory according to Vietnam’s regulations?

thưởng tết, Bộ luật Lao động 2019

The Labor Code 2012 of Vietnam will expire on January 01, 2021 and be replaced by the Labor Code 2019. The time to take a break and receive bonuses for the Lunar New Year 2021 falls in February 2021. Thus, salary and bonus for Tet 2021 will be applied according to the new Labor Code of Vietnam. 

According to the Labor Code 2019 of Vietnam:

A bonus means an amount of money, a piece of property or item that is provided by an employer for his/her employees on the basis of the business performance or the employees’ performance.

A bonus regulation shall be decided and publicly announced at the workplace by the employer after consultation with the representative organization of employees (if any).

According to this provision, it is not compulsory for enterprises to give Tet bonuses to employees, instead, based on production and business results and the level of job completion, the enterprise will decide the bonus policy for employees. The Law stipulates that the bonus is “provided by an employer”, so it can be understood that the law allows enterprises to take the initiative in giving Tet bonuses to employees. Suppose, in the previous year, the business suffered a loss or when the employee did not complete his work, he may not receive the Tet bonus.

An important new point of the Labor Code 2019 compared to the Labor Code 2012 is the forms of Tet bonus. According to Clause 1 Article 103 of the Labor Code 2012, “bonus is a sum of money”, while according to Clause 1 Article 104 of the Labor Code 2019, “bonus means an amount of money, a piece of property or item”. Thus, from 2021, the form of Tet bonus for employees is not only in money but also in other forms such as property or in other forms decided by the enterprise.

It can be seen that the Labor Code 2019 of Vietnam is very flexible, allowing enterprises to decide on their employees’ working time to receive bonuses; time, form and level of Tet bonus etc. Moreover, it is not compulsory for enterprises to give Tet bonuses to employees.

** Are Tet bonus and 13th month salary the same thing?

In addition to Tet bonus, the 13th month salary is always a matter of great concern to employees. The question is whether Tet bonus and 13th month salary are the same. Both the Labor Code 2012 and Labor Code 2019 (effective from January 01, 2021) of Vietnam do not have any provision on 13 th month salary, this is only the actual amount generated. Because the law does not stipulate the 13th month salary nor distinguish between the 13th month salary and Tet bonus, it is not even mandatory for businesses to pay the 13th month salary, whether or not to pay 13th month salary; whether Tet bonus and 13th month salary are the same or not will be regulated by company regulations.

Thuy Tram

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