Overtime pay is a critical aspect of compensation and benefits management, yet it often raises questions and requires careful consideration. This guide will provide an overview of overtime regulations under Vietnamese labor law and offer practical considerations for HR professionals.

What is overtime (OT)?

In Vietnam, overtime refers to any work performed by an employee beyond their standard working hours, typically 8 hours per day or 48 hours per week. Certain industries may have specific regulations regarding overtime work.

Why overtime matters:

Scientific evidence supports the idea that productivity diminishes after prolonged work hours. Overtime regulations exist to safeguard employee health and ensure fair compensation for extra effort.

Overtime Pay: Eligibility and Calculation

All employees, regardless of their employment status or salary level, are entitled to overtime pay in Vietnam.

Overtime pay rates in Vietnam are calculated as a percentage increase on top of the employee's regular hourly wage. The specific rates vary depending on the day and time of the overtime work:

• Weekdays:
  • Overtime on weekdays is compensated at 150% of the regular hourly wage.
• Weekends:
  • Overtime on weekends is compensated at 200% of the regular hourly wage.
• Public holidays:
  • Overtime on public holidays is compensated at 300% of the regular hourly wage.

Limits on overtime hours:

Vietnam's labor law sets limits on the amount of overtime an employee can work. Generally, overtime cannot exceed 30 hours per month and 200 hours per year. However, in special cases approved by the government, the yearly limit can be increased to 300 hours.

HR Considerations for Overtime Pay in Vietnam

Ensuring legal compliance:

HR professionals in Vietnam must stay updated on overtime regulations and ensure company policies align with the law. Failure to comply can result in penalties and legal disputes.

Tracking overtime hours:

Accurate timekeeping is essential for calculating overtime pay correctly. Implement reliable systems for tracking employee working hours, including regular and overtime hours.

Clear communication of overtime policies:

Communicate overtime policies clearly to employees, including eligibility, compensation rates, and limitations. Ensure employees understand their rights and the procedures for claiming overtime pay.

Managing overtime requests:

Establish a clear process for employees to request overtime and obtain approval from their supervisors. Monitor overtime hours closely to ensure compliance with legal limits.

Addressing employee well-being:

While overtime can be necessary at times, excessive overtime can lead to burnout and decreased productivity. Encourage employees to take breaks, utilize leave benefits, and prioritize their well-being.

By understanding the complexities of overtime pay and implementing best practices, HR professionals can foster a compliant and equitable work environment while optimizing workforce management.