Is Overtime Paid in Vietnam? Understanding to Protect Your Rights

Overtime is a frequent issue in labor relations, especially in manufacturing companies or those with extensive distribution networks. However, not every instance of working beyond regular hours automatically guarantees overtime pay. So, what constitutes legal overtime? How can employees protect their rights? And what should employers pay attention to in order to avoid legal risks?

What is overtime and is it protected by law?

According to the Labor Code, overtime is the time an employee works beyond the normal working hours defined by law, collective labor agreements, or internal company rules. Article 107 of the 2019 Labor Code clearly states: overtime must be agreed upon by the employee and must not exceed 40 hours per month or 200–300 hours per year depending on the industry. Moreover, overtime must be clearly agreed upon and requested by the employer, evidenced by written requests, directive emails, or approved overtime reports from management.

How is overtime pay calculated?

Under Article 98 of the Labor Code, overtime pay rates are:

• On regular workdays: at least 150% of normal hourly wage;

• On weekly rest days: at least 200%;

• On holidays and Tet: at least 300%, excluding normal holiday pay if the salary is time-based.

Thus, if an employer fails to pay correct overtime wages, employees have the full right to claim the difference and seek back payment from when it was owed.

Why working extra hours may not count as overtime

Many employees believe that simply being present at the workplace beyond normal hours means they’ve done overtime and deserve extra pay. However, Vietnamese law is more nuanced. Determining whether to pay overtime depends on factors like employer consent, confirmation procedures, and clear agreements on working time. Without meeting these conditions, even working extra hours might not be recognized or compensable.

1. No employer request
   This is the most common reason for unpaid overtime. If the extra work arises from the employee’s own effort to meet targets or increase income without any assignment or instruction from management, it’s unlikely to qualify as legal overtime.

2. No proper confirmation processes
   Many companies require formal overtime approval and reporting: employees must get approval from direct supervisors, use timesheets or assignment emails, and submit reports to HR by a deadline for payroll. Without these steps, even if overtime occurred, it usually will not be compensated.

3. Deadline for legal claims has expired
   Under Vietnamese labor law, the statute of limitations for filing overtime wage disputes is 1 year from when the violation is discovered. If an employee receives monthly salary statements but never raises a complaint, the court may later refuse to award back-pay due to expired limitation.

What should employers do to prevent labor disputes?

Labor disputes, especially over wages and overtime, can cause financial losses and harm company reputation and workplace morale. In an increasingly regulated environment where employees are more aware of their rights, companies must build transparent, lawful labor governance systems to reduce litigation, penalties, and unexpected harm.

1. Develop and disseminate clear overtime policies
   Internal policies should specify conditions, procedures, approval authority, and pay calculation methods. These should be communicated and regularly trained for all employees.

2. Establish a transparent overtime confirmation system
   Use attendance software, assignment emails, or signed work orders with management approval to show overtime is legal. This not only protects employee rights but helps the company avoid future disputes.

3. Monitor claim timelines and respond promptly to complaints
   When receiving wage-related complaints, companies should respond clearly, document the case, and keep records. This limits long-term disputes and provides defense in legal proceedings.

What can employees do to protect their legal rights?

In labor relationships, employees often have less information and control over procedures. Without understanding their rights, they can suffer losses without having solid proof. Taking proactive steps such as knowing labor laws, keeping work records, and following confirmation procedures helps employees protect their rights when disputes arise.

1. Understand your employment contract and company rules
   Before starting work, read your labor contract carefully, especially the terms on working hours, overtime policy, and salary. Ask for clarification or adjustments if needed prior to signing.

2. Request clear confirmation when working overtime
   If asked to work extra hours, request written or email confirmation from management, and submit weekly/monthly reports of completed work. Keeping these documents is the most effective way to prevent disputes.

3. Act promptly on complaints if your rights are violated
   If you realize you haven’t been paid overtime or there is a contract violation, file a written or email complaint promptly. This serves as evidence of when the dispute began — a key factor in limitation periods.

Overtime is common across many industries, but to receive proper recognition and compensation, both employees and employers must follow legal procedures. Neglecting confirmation processes or misinterpreting your rights can lead to prolonged disputes and unnecessary harm.

If your company needs consulting on labor management, drafting internal regulations, or resolving wage and overtime complaints, let DEDICA support you.

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