8 February, 2016
Regulations on working hours and time break of employees in the manufacturing /processing industry working on a seasonal/ordering basis
The Ministry of Labour-Invalids and Social Affairs issued Circular No. 54/2015/TT-BLDTBXH dated 16 December 2015 guiding on working hours and time break of manufacturing employees working on a seasonal basis and processing orders:
1. Applicable Objects:
Employees working under a definite term of labour contract from 12 months to 36 months and under indefinite term of labour contracts in the following area:
- Seasonally farming, forestry, fishery and salt manufacture, where products are required to be harvested in a short time or put into processing right after harvesting;
- Orders where the working periods are depending on the requirements by the owners of the goods. This section consists of textile, garment, leather, footwear and technological assembly industries.
2. Principles in using standard working hours:
Employers do not need to pay wages for employees in the case of suspension of the work: If the standard working hours are less than 8 hours or less than 6 hours for employees who work under ponderous, toxic or dangerous conditions, and working schedules have been planned in accordance to the guidance of this Circular.
Employers need to pay wages for employees in cases of work suspension: If the standard working hours have been scheduled, but employees are not assigned to work in practice.
- If standard working hours are more than 8 hours or more than 6 hours for employees who work under ponderous, toxic or dangerous conditions, and the working schedules have been planned in compliance with this Circular ‘s guidelines, the additional working hours arising are not considered as overtime.
- If daily working hours exceed the standard working hours that were already scheduled, the additional amount of time is allowed to be considered as overtime and shall be added to the total overtime amount during the year. Meanwhile, employers must pay overtime salary and other allowances for employees, following the Law on Labour.
3. What actions the Employers need to take?
- Prepare and adjust the schedules of annual working time and time break by using forms in Appendix 1 attached in this Circular. The labour union will be involved in these actions.
- Notify the schedules of working time and break time and any amendment to employees at least 30 days before applying the schedules. Having agreement with employees on overtime work, following regulations in the Law of Labour.
- Agreement with employees on method of payment being whether seasonal or monthly payment.
- Report to the local Department of Labor – Invalids and Social Affairs on the application of this Circular when reporting on the labor safety and hygiene on an annual basis.
4. Implementation
Effective from 10 February 2016.
Replacing the Circular No. 33/2011/TT-BLDTBXH dated 18 November 2011.
Notice of calculation basis on overtime payment for employees during Lunar New Year 2016
Grant Thornton Vietnam would like to note the calculation basis on overtime payment for employees during Lunar New Year 2016 to Enterprises as follows
Pursuant to Article 104, the Labour Law, employees receiving salary based on their working time are paid overtime salary for their working hours in addition to the standard ones set by the Employer. Calculation formula for overtime salary is as follows:
Overtime Salary = Actual salary per hour of weekday * Minimum rate of 150%, 200% or 300% * Additional working hours
- Minimum rate of 150% of actual salary per hour of weekday is applicable for overtime work on the weekday;
- Minimum rate of 200% of actual salary per hour of weekday is applicable for overtime work on the weekend;
- Minimum rate of 300% of actual salary per hour of weekday is applicable for overtime work on public holidays or salary-paid days off, exclusive of the original salary for those days of employees who are receiving daily salary.
- Minimum rate of 30% of the salary unit or daily salary is applicable for overtime work at night.
The daily-paid employees are employees who receive salary on a daily basis as agreed in their labour contracts, the daily salary is exclusive of extra salary for work on public holidays and salary- paid days off, pursuant to Law on Labour.
If employers have their employees worked overtime at night on the 2016 Lunar New Year holidays, calculation for overtime salary is as follows:
Assuming that the employees’ salary unit on normal working day is A, then:
For monthly-paid employees, the minimum amount of overtime salary is:
300%A + 30%A + 20% x (300%A) = 390%A
For daily-paid employees, they will receive a salary of 490%A, which consists of the aforementioned minimum amount of 390%A and the salary for public holidays and salary-paid days off.
