Overtime Compliance for Companies in Vietnam

What Is Overtime and the Regulating Legal Framework

Under Article 107 of the Labor Code 2019, overtime is working time beyond normal working hours as prescribed by law, the collective labor agreement or internal labor rules. Normal working hours do not exceed 08 hours in 01 day and 48 hours in 01 week; companies may set working hours by day or by week, and for weekly-based arrangements normal working hours do not exceed 10 hours in 01 day, not exceeding 48 hours in 01 week. All working time beyond this frame counts as overtime and must comply with legal limits and conditions.

The legal framework comprises the Labor Code 2019 (Article 98 on overtime wages; Articles 105–108 on working hours, overtime and night work), Decree 145/2020/ND-CP detailing certain articles, and Decree 283/2026/ND-CP on administrative penalties in the labor and social insurance sector. Collective labor agreements or internal rules may only provide more favorably for employees — any internal clause relaxing overtime limits beyond legal allowances is invalid.

Maximum Overtime Hour Limits

Article 107 of the Labor Code 2019 sets four layers of limits. First, an employee’s overtime must not exceed 50% of normal working hours in 01 day; for weekly-based normal working hours, total normal plus overtime hours must not exceed 12 hours in 01 day. Second, overtime must not exceed 40 hours in 01 month. Third, total overtime must not exceed 200 hours in 01 year. Fourth, certain special cases may work overtime up to 300 hours in 01 year — mainly in manufacturing and processing for export of textiles, footwear, electronics, agro-forestry-fishery processing; electricity production and supply, telecommunications, oil refining; and jobs requiring high technical qualifications that the labor market cannot adequately supply.

In practice, the 40-hour/month limit is the “ceiling” companies violate most, because seasonal demand concentrates in a few peak months — production plans should be allocated so no month exceeds the ceiling, rather than only controlling total annual hours. For cases eligible for the 300-hour/year level, the company must notify in writing the labor authority under the provincial People’s Committee when organizing overtime beyond 200 hours in 01 year — failing to notify while exceeding 200 hours is an independent violation.

Mandatory Condition: Employee Consent

Article 107 provides that employers may use employees for overtime when fully meeting three conditions: obtaining the employee’s consent; keeping overtime within the above limits; and ensuring overtime wages are paid as prescribed. Of the three, “employee consent” is where companies are most complacent — many managers treat overtime orders as a natural management right, while the law treats it as an agreement.

Consent should be in a provable form: overtime registration signed (or electronically confirmed) by each employee for each round, rather than a “general commitment” signed once at the year’s start. For FDI companies, forms should be bilingual so foreign managers can follow, but the Vietnamese content is the basis when working with authorities.

Overtime Wages: 150%, 200%, 300%

Article 98 of the Labor Code 2019 sets minimum overtime wage rates: on ordinary days, at least 150% of the wage unit price of the current job on a normal working day; on weekly days off, at least 200%; on public holidays, Tet holidays and paid leave days, at least 300% — excluding holiday/Tet/paid-leave day wages for daily-paid employees. These are minimums; companies may pay higher under collective labor agreements or internal regulations. See company wage policies on building payroll regulations.

The point companies often miscalculate is the “wage unit price” basis: it must be the wage of the current job, including the job- or title-based salary level, wage allowances and other supplements. Omitting allowances and supplements from the unit price leads to widespread overtime wage underpayment and arrears upon inspection.

Night Overtime

Employees working at night are paid at least an additional 30% of the wage calculated at the unit price of the daytime job. For night overtime, besides the above 30%, the employee is additionally paid 20% of the wage calculated at the unit price of the daytime job of a normal working day, weekly day off, or public holiday/Tet — depending on the nature of that day. Night overtime costs on holidays/Tet are therefore very high — companies should carefully calculate economic efficiency before organizing night production on these occasions.

Night working hours are counted from 22:00 to 06:00 the next morning. Companies regularly organizing night shifts should clearly define the night shift frame in internal labor rules, and the timekeeping system must distinguish daytime working hours, nighttime working hours and nighttime overtime hours — three hour types with three different wage calculations.

Restricted Subjects: Female and Juvenile Workers

The law applies special protection regimes to certain worker groups. Employers must not use female workers for night work, overtime and distant business trips in cases: pregnant from the 7th month or from the 6th month if working in highland, remote, border or island areas; nursing children under 12 months — except with the employee’s consent. Even with consent, the company should carefully keep the written consent.

For juveniles, the law strictly limits overtime and night work; in principle persons from 15 to under 18 must not work overtime or at night, except certain occupations and jobs prescribed by the Minister of Labor – Invalids and Social Affairs. Violations of protection rules for special worker groups are usually penalized more heavily.

Dossiers, Timekeeping and Inspections on Overtime

When labor inspectors check overtime, they usually require three document groups: timekeeping books (or systems) showing each person’s actual daily working hours; documents showing employee consent to overtime; and payroll tables showing how overtime wages were calculated. These three groups must match: timekept hours must correspond to the consented overtime rounds, and payroll must correctly reflect those hours at the prescribed unit price.

Inspection practice shows two common violation patterns: “two-book” timekeeping and overtime wages calculated on a unit price lower than prescribed. Both are easily detected through cross-checking with production data or access control systems. Companies should unify a single timekeeping system integrated with payroll.

Designing an Overtime Policy for FDI Companies

A proper overtime policy should include: the approval process by level (who may propose, who approves, hour caps by month/quarter); employee registration and consent confirmation forms; how the overtime wage unit price is calculated for each title group; the principle that compensatory leave may not replace the overtime wage obligation; and a monitoring mechanism so no individual exceeds the 40-hour/month ceiling.

For FDI companies, the policy needs to be “translated” to fit Vietnamese law from the start rather than applying the head office template as-is — many groups have global standards that do not account for special limits like the 40-hour/month ceiling or the notification procedure when exceeding 200 overtime hours/year. After issuance, the policy should be communicated to all middle managers. Overview of the labor compliance framework at our labor law advisory page.

Frequently Asked Questions

Useful Links

• Labor Law Advisory – our dedicated labor law page for businesses.
• Company Wage Policies – building payroll regulations and overtime wage unit prices.
• Social Insurance and Payroll Compliance for FDI Companies – insurance contributions related to overtime wages.