Vietnam’s labor laws are designed to balance economic growth with worker protection, making it crucial for both employers and employees to understand regulations on working hours and overtime compensation. With Vietnam being a key destination for foreign investment, particularly in manufacturing, comprehending labor policies ensures compliance, efficiency, and fair compensation for workers.
Standard Working Hours in Vietnam
The Vietnamese Labor Code of 2019 sets a maximum of eight hours per day and 48 hours per week as standard working hours. While employers may structure work schedules on a daily or weekly basis, the following conditions apply:
- Daily Limit: Cannot exceed 10 hours in cases where a weekly arrangement is used.
- Weekly Limit: Cannot surpass 48 hours.
- Encouraged Reduction: Employers are urged to implement a 40-hour workweek for better work-life balance.
- Special Cases: Employees in hazardous jobs may have reduced work hours (six or seven hours per day), depending on exposure risks.
Night shifts, defined as work between 10 PM and 6 AM, qualify for additional compensation due to their demanding nature.
Understanding Overtime Regulations
Overtime is any work performed beyond standard working hours and requires employee consent. The law stipulates strict caps on overtime hours to prevent excessive workload:
- Daily: Overtime cannot exceed 50% of regular working hours per day.
- Monthly: Overtime is limited to 40 hours per month.
- Annually: The cap is 200 hours per year, with exceptions allowing up to 300 hours for specific industries like textiles, electronics, and seasonal manufacturing.
Employers exceeding these limits must notify provincial labor authorities.
Overtime Compensation Rates
Vietnam’s Labor Code of 2019 mandates that overtime pay must exceed regular wages based on the timing of the extra work. The rates are as follows:
- Weekdays: At least 150% of the normal hourly wage.
- Weekends: At least 200% of the normal hourly wage.
- Public Holidays: At least 300% of the normal hourly wage (excluding base salary).
For night shifts (10 PM – 6 AM), additional 30% compensation is applied. If overtime is performed at night, employees receive an extra 20% on top of both the overtime and night shift rate.
Example Calculation
If an employee earns VND 100,000 per hour, their overtime pay would be calculated as follows:
- Overtime on a weekday (3 extra hours):
- VND 100,000 × 1.5 × 3 hours = VND 450,000
- Overtime on a weekend (10 hours):
- VND 100,000 × 2 × 10 hours = VND 2,000,000
- Overtime on a public holiday (10 hours):
- VND 100,000 × 3 × 10 hours = VND 3,000,000
Total pay for the week, including regular wages (VND 4,000,000) and overtime (VND 5,450,000) = VND 9,450,000.
Restrictions on Overtime Work
To safeguard worker health, certain groups are prohibited or restricted from working overtime:
- Minors (under 18): Strictly limited working hours and restricted from hazardous industries.
- Pregnant Women (7+ months) & Mothers with Infants (under 12 months): Cannot be assigned overtime, night shifts, or long business trips.
- Employees in Hazardous Jobs: Employers must ensure compliance with safety regulations, limiting exposure to harmful substances.
Rest Periods and Paid Leave Entitlements
To ensure worker well-being, Vietnamese labor law mandates:
- Daily Breaks: At least 30 minutes during the day or 45 minutes for night shifts.
- Weekly Rest Days: Minimum one full day off per week. If continuous operations require exceptions, employees must receive at least four days off per month.
Annual Leave:
- 12 paid vacation days for regular employees.
- 14–16 days for those in hazardous jobs.
- Additional days for every five years of service.
Public holidays include six official celebrations, totaling 11 paid holidays annually (or more for foreign workers observing their national holidays).
Why These Regulations Matter
Vietnam’s structured labor policies ensure that while businesses remain competitive, workers receive fair treatment. With rising foreign investment, especially in manufacturing, understanding overtime laws helps companies manage labor costs effectively while maintaining compliance. Employers must maintain accurate records of work hours and overtime pay to prevent legal disputes and ensure worker satisfaction.