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The Ministry of Labor, Invalids and Social Affairs has proposed an amendment to the Labor Code that would sharply increase the country's overtime limit.
Under the proposal, an employee may work a maximum of 600 extra hours per year, doubling the overtime limit currently imposed on some specific areas, the government portal said in a statement on Saturday.
Vietnam’s 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.
The move comes after Prime Minister Nguyen Xuan Phuc asked relevant ministries and agencies to consider adjusting the overtime limit following recommendations from foreign firms.
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.
These thresholds are holding back the development of IT companies as engineers need to work overtime if any technical problems arise, the Japan Business Association in Vietnam said at the annual Vietnam Business Forum last week.
Han Dong Hee, chairman of the South Korea Business Association, echoed the same opinion, adding that the rule has raised labor costs and delayed production schedules.
The maximum number of overtime hours allowed in Vietnam is currently less than other Southeast Asian countries.
While Vietnamese workers can’t work for more than 300 extra hours per year, it’s 1,800 hours in Thailand, 1,250 in Malaysia, 860 in Singapore and 540 in Laos.
This restriction is taking its toll on both enterprises and their workers.
A recent survey conducted by national television broadcaster VTV at the Thang Long Industrial Zone in Hanoi revealed that 97 percent of manual workers want to work overtime as the money from those extra hours accounts for a third of their monthly incomes.
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