Businesses renew request to double Vietnam's overtime limit: commerce chamber

By Staff reporters   December 27, 2017 | 06:21 pm PT
Businesses renew request to double Vietnam's overtime limit: commerce chamber
Workers make jackets at a garment factory in Bac Giang Province, near Hanoi. Photo by Reuters/Kham
Foreign firms have long been asking to raise this limit, which is lower than that of Vietnam's neighbors.

Representatives of businesses in Vietnam have once again called for the country's overtime limit to be increased, according to a recent report by the Vietnam Chamber of Commerce and Industry (VCCI).

Vietnam’s current Labor Code stipulates that an employee can work a maximum of 200 extra hours per year. In some specific areas like textiles and garments, leather, aquaculture processing, telecommunications, water and power supplies, overtime is capped at 300 hours per year.

Several South Korean and Japanese firms have complained that the current limit in Vietnam is too low, and have suggested the government should double or triple the figure.

At a meeting organized by the VCCI and the labor ministry earlier this month, business representatives also stressed the need for this limit to be raised.

Dao Thi Huyen, a representative of the Japan Business Association in Vietnam said that if Vietnam continues to keep the current limit, many Japanese firms would not invest in Vietnam's labor intensive industries.

"Other companies might break the law to increase their overtime, but Japanese companies always strictly follow Vietnamese law for fear of affecting their businesses. As our workers are not allowed to work extra shifts, their incomes are lower than at other companies. This leads to Japanese companies being unable to attract more workers to grow," Huyen said.

She therefore proposed that the limit should be raised to 400-600 hours per year, or double the current limit, in the draft amendments to the new Labor Code.

The representative of the Vietnam Textile and Apparel Association also voiced support for an increase to the limit, suggesting a cap of 4 hours per day and 400 hours per year.

Speaking at the meeting, Bui Sy Loi, deputy chairman of the National Assembly's Committee on Social Issues, confirmed that the labor ministry is leaning toward increasing the overtime limit in its draft amendments. However he also said the new limit must be carefully considered and suitable for all industries.

While many seasonal businesses need the overtime to finish their products and workers want the overtime to boost their incomes, working overtime often leads to an increase in occupational accidents. Loi therefore stressed that the new limit must be balanced to meet the demands of businesses and workers without resulting in overwork and accidents.

"However overtime pay must increase progressively. We must use the limit to prevent people from using overtime to work more without increasing productivity," Loi added.

The labor ministry first proposed an amendment to the Labor Code that would increase the overtime limit to a maximum of 600 extra hours per year, or replace it with a daily cap of 12 hours, last year.

The Vietnam General Confederation of Labor, which represents unions across the country, however opposed both options, saying employers could take advantage of the new policy and ask their staff to work longer hours instead of adding new jobs.

Le Dinh Quang, deputy director of the Department of Labor Relations under the state-run labor organization, argued that in Vietnam, the average worker still clocks in 48 hours per week, or more than 2,400 hours per year. Therefore if the overtime limit is raised, the total number of working hours will become too high.

The overtime limit is 1,800 hours in Thailand, 1,250 in Malaysia, 860 in Singapore and 540 in Laos.

A survey conducted by national broadcaster VTV at Hanoi's Thang Long Industrial Zone last year revealed that 97 percent of the workers there wanted to work overtime as the money from extra hours accounted for a third of their monthly income.

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