Every nation is distinguished by its own culture. Thus, their national holidays are celebrated differently and uniquely. These also affect investors in making investment decisions, aside from the business and legal environment. Therefore, it is crucial for business owners to understand and familiarize themselves with traditional holidays and practices. In this article, Viettonkin will provide insights and tips for investors about Vietnamese national holidays and labor compliance.
Vietnam’s public holidays
Vietnam is known for its deep-rooted and diverse culture, in which national holidays are often associated with Vietnamese traditions and customs, or special events in history.
For example, Lunar New Year (“Tet Holiday”) is considered the most important and desirable public holiday of the year. Tet usually happens on the 1st day of the lunar new year and symbolizes warmth and family reunions. Besides, Hung King’s Anniversary on April 30th and May 1st annually reflect Vietnamese origin and philosophy “when drinking water, remember the source”. Thus, people have several days-off to commemorate and show gratitude towards Hung King and his forefathers.
In addition, another most significant holiday in Vietnam is on September 2 – Independence Day. Vietnamese people celebrate the day when the country was established and recall the heroic history of the nation.
In Vietnam, the holiday schedule for special holidays such as the Lunar New Year, and Hung King’s Anniversary, among others, will be regulated by the state. Traditionally, the Tet holiday is the longest holiday, lasting for 7 days, from January 20th to January 27th in 2023. For the remaining holidays, employees will have a maximum of 4 days off.
|Viet Nam Public Holidays 2023|
|January 1, 2023||Sun||New Year’s Day|
|January 2, 2023||Mon||New Year Holiday (compensatory time-off)|
|20 Jan to 26 Jan, 2023||Fri to next Thursday||Tet Holiday|
|April 29, 2023||Sat||Hung Kings Commemoration Day|
|April 30, 2023||Sun||Reunification Day|
|May 1, 2023||Mon||International Labor Day|
|May 2, 2023||Tue||Reunification Day Holiday (compensatory time-off)|
|September 2, 2023||Sat||National Day|
|September 4, 2023||Mon||National Day (compensatory time-off)|
Implications of public holidays for enterprises and companies in respect of the Calculation of Employee Salary and Holidays
The Labor Code 2019 stipulates how salary is calculated during public holidays, annual leave, and personal leave. In case employees are off work, the salary for employees on public holidays, annual leave, and personal leave is the salary according to the labor contract at the time they take leave. Some expenses, such as mid-shift lunches, allowances for gas, a car, a phone, and other items, are not included in the salary used as the foundation for public holidays.
In case the employees are on duty during public holidays, the employee’s salary is calculated as follows (Article 98 of the Labor Code 2019)
Employees who work overtime on public holidays, and paid holidays are paid at least 300% of their salary, not including the daily salary during the public holidays or paid leave for employees receiving daily salaries. Specifically, for employees who receive hour-based wages on public holidays, the overtime pay is equal to the actual hourly wage paid on a normal working day multiplied by 300% multiplied by the number of overtime hours, excluding the daily salary during public holidays or paid leave in case the employee receives daily salary..
Meanwhile, for employees who receive product-based wages on public holidays, the overtime pay is equal to the unit price of the product salary of the normal working day multiplied by at least 300% and multiplied by the number of products.
One mindful note for investors in Vietnam is that holidays will affect the tax planning of investors. They might be extended if the legal and compliance due dates coincide with public holidays. Thus, paying attention to national holidays is essential. Being attentive to public holidays may help investors schedule their tax compliance ahead of the due date, hence fulfilling tax obligations on time.
To avoid future legal violations, investors are advised to consult leading experts in the field. In this way, investors can reduce the risk of non-compliance, and legal concerns, thus focusing more on core business activities. With decades of experience in many Southeast Asia markets, along with a team of seasoned and professional experts insightful of the regional and domestic markets, Viettonkin is willing to accompany and support investors along Vietnamese legal procedures and compliance.