Distinguishing the 13th-month bonus from other payments.

This is understandable for employees, as at the end of the year they receive various payments and need to know whether it's a 13th-month bonus, increased income due to overtime work to meet order requirements from the employer, productivity bonuses, etc.

Questions about year-end payments

Ms. Ha Thi Trang (a resident of Dong Phu commune working at a company in the Nam Dong Phu Industrial Park) asks: Her company doesn't have a 13th-month bonus like many other companies. However, the company still applies a bonus system based on production and business results, and the level of job completion by employees each year, and this is paid at the end of the year. Does this mean the company is violating the law regarding Tet bonuses?

Workers at Saitex International Dong Nai Co., Ltd. (Amata Industrial Park, Long Binh Ward, Dong Nai Province) on the semi-finished product line. Photo: Doan Phu

Employee Duong Van Hai (residing in Tan Trieu ward, working at Thanh Phu Industrial Cluster) stated: Labor law allows employees to take paid leave during the New Year and Lunar New Year holidays. However, at the end of the year, the company still sends notices to employees to register to work on these days. Those who register to work on holidays will receive a bonus; those who do not register and stay home as per regulations will only receive their full salary for that day as per labor law regulations, without any additional bonus. Is the company's action legal?

In reality, besides their monthly salary, employees also receive many other benefits in the last months of the year, such as holiday pay, annual leave, and productivity bonuses for overtime work. Because the sum of these benefits is large, equivalent to or higher than a normal month's salary, employees consider it a 13th-month bonus and are therefore excited.

It's important to distinguish between the 13th-month bonus and other payments.

Lawyer Nguyen Thi Hong (Dong Nai Provincial Bar Association) stated: Current labor laws do not mandate employers to pay a 13th-month salary, or 13th-month bonus, to employees. Since labor laws do not require employers to pay a 13th-month salary bonus to employees, employers are not obligated to pay this amount to their employees.

However, Article 104 of the 2019 Labor Code stipulates that bonuses are sums of money, assets, or other forms of reward given by the employer to employees based on production and business results and the level of job completion by the employee. The bonus regulations are decided by the employer and publicly announced at the workplace after consulting with the employee representative organization at the workplace, if such an organization exists. Therefore, based on this regulation, employees are only entitled to Tet bonuses if both parties have agreed to it in the labor contract; as stated in the collective labor agreement, or in the company's financial regulations or bonus regulations.

Employees are entitled to full pay even without working on New Year's Day: 1 day (January 1st); Lunar New Year: 5 days. Foreign workers in Vietnam, in addition to the holidays stipulated in Clause 1, Article 112 of the 2019 Labor Code, are also entitled to an extra day off for their national traditional New Year and their national day. If employees work on these days, their wages must be at least 300%, not including holiday pay for employees paid on a daily basis.
Point c, Clause 1, Article 98 and Article 112 of the 2019 Labor Code

Lawyer Nguyen Thi Hong noted: The nature of bonuses under Article 104 is based on production and business results and the level of job completion of each employee. This bonus is not a 13th-month bonus for all employees in the enterprise. Although not obligated to give a 13th-month bonus to employees, employers still have the right to decide whether to give a 13th-month bonus to all employees. At the same time, employers are not allowed to consider payments such as: overtime pay; payment of 150-300% of salary for night work, holidays, and Tet (Lunar New Year); and payment for employees working on days they should have been off, such as weekends, holidays, Tet, and annual leave, as bonuses.

Based on the above analysis, according to lawyer Nguyen Thi Hong: The issues raised by employees Ha Thi Trang (residing in Dong Phu commune) and Duong Van Hai (residing in Tan Trieu ward) regarding year-end bonuses and other payments are in accordance with what the law permits, in order to properly exercise their rights and monitor the employer's fulfillment of obligations.

Because, according to Clause 1, Article 5 of the 2019 Labor Code, employees have the right to receive a salary commensurate with their qualifications and professional skills based on an agreement with the employer; to take leave according to regulations, annual leave with pay, and to enjoy collective benefits; to request and participate in dialogue, implement democratic regulations, and collective bargaining with the employer, and to be consulted at the workplace to protect their legitimate rights and interests; and to participate in management according to the employer's internal regulations...

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