Tet bonus is an obligatory aspect in Vietnam, Tet bonus in Vietnam, Lunar New Year bonus, end of year reward in Vietnam,

Is Tet bonus an obligatory aspect in Vietnam?

On the occasion of Lunar New Year, which is also known as Tet Holiday, the issue of Tet bonuses and the 13th-month salary is often discussed in society. Currently, there is no specific regulation or rule that obliges businesses to give Tet bonuses to employees. Whether or not to give Tet bonuses depends on the discretion of the business.

When viewed from a legal standpoint, specifically according to the regulations of the Labor Code in Vietnam, there is no laws that obligate the employer to give end-of-year bonus or Tet bonus to employees.

Tet bonuses are not at all considered as a form of bonus stipulated within the legal framework of labor laws in Vietnam. Therefore, striking to demand Tet bonuses or an increase in Tet bonuses compared to the previous year is entirely incorrect and lacks legal basis.

Tet bonuses are intended as an incentive for employees after a year of dedication and hard work, encouraging them to continue working for the employer in the following year. The amount of this bonus largely depends on the business and production situation of the company in the past year.

If a company faced financial difficulties or losses due to external factors such as the Covid-19 pandemic or the slow recovery rates of the economy, it is evident that the company may not have the financial capacity to provide Tet bonuses to its employees.

Many businesses during the Tet holidays did not provide Tet bonuses. Even when Tet bonuses are given, most Vietnamese businesses, unaffected by the pandemic, typically award an amount equivalent to one month’s salary.

In comparison to other countries’ end-of-year reward, a one-month salary is considered high. However, due to the nature that this reward has been given yearly with little to no exception, it has become a mandatory aspect of Lunar New Year that employees expect to receive from their employer.

This leads to the consequence that if they don’t receive the bonus as expect, they may react harsh, even with violence or illegal strike which damages both the employees’ benefits and the employer’s revenue.

In contrary to other countries, this situation might not be fixed as the concept of Tet bonuses has well been established to every laborers, similar to the problem of lump-sum social insurance whereas the employees will overreact, even threaten the officials, if they are banned from withdrawal from the social insurance fund.

Therefore, even if the employers are experiencing a bad year with potential losses, it’s best that they can gather up a small amount of bonuses or rewards for their employees, in recognition of their hard work over the year. The bonus may not be as much as the yearly bonus from when the company conducts good business operation, but it will ease the burden and anticipation of the employees, assuring that they can align their rights and benefits with that of the employer in the coming year.

From the employees’ side, they should not push the panic button if the employer can’t come up with a bonus when their business has been falling apart since the start of the year. Instead, they should empathize with the employer and accept the rewards which might not be as high as in the previous years. Some Vietnamese companies now offer their products as part of the Tet bonuses.

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