Companies increasingly require employees to use up annual leave

Minh Thuong spent 10 days of her annual leave vacationing on Phu Quoc Island in southern Vietnam in July 2026. Photo courtesy of Thuong

Dr. Le Trung Hieu, who directs HR management development at the School of Business Administration at the Vietnam National University, Hanoi, says persuading workers to exhaust their leave before financial books close is a trend adopted from foreign enterprises in the country.

He listed four reasons for employers making using up leave mandatory. Financially, untaken vacation days sit on corporate ledgers as accrued liabilities or projected costs that require employees to take leave before accounts are closed for the financial year.

Legally, it also keeps companies compliant with occupational health and safety codes and shields corporate reputations from fallout tied to workplace burnout. Operationally, vacations give employees room to recover while stress-testing whether a company's internal systems can function seamlessly when individual workers are absent.

For companies compensating employees based on project output rather than billable hours, having staff take time off also reduces overheads, trimming costs on electricity, water, office catering, and basic supplies.

Internationally, several countries hold businesses to strict standards regarding vacation rights; Germany requires workers to use their full allowance within the calendar year, granting extensions into the following quarter only under pressing circumstances, while Japan allows unused days to roll over for up to two years.

"The Federal Labor Court in Germany requires employers to urge staff to take their statutory leave, with authorities handing down administrative fines of up to 30,000 euros (approx. VND810 million) or even pursuing criminal charges against companies that block legitimate time off," Stoffers told VnExpress.

Hieu noted that the practice is standard among multinational corporations answering to parent companies in Europe, North America, and Japan; large joint ventures and publicly listed firms facing regular audits; and financial institutions spanning banking and insurance.

Doan Huy, who heads sales at a Hanoi-based conglomerate (subject wished to stay anonymous), said his company routinely audits leave balances and alerts employees so they can plan ahead. The company only asks that staff limit consecutive absences to three days during urgent rollouts and insists on thorough handovers beforehand.

A bank branch manager in the northern port city of Hai Phong confirmed that his office actively encourages vacations as long as project deadlines remain secure. For management-level personnel, taking all allotted annual leave is mandatory, during which headquarters sends interim coverage to manage daily duties.

"Many managers barely touch half their time off because of crushing workloads, so this hard rule forces them to step away and recharge," the branch manager said.

Pham Tuan Phuc, managing director of the executive recruiting firm Robert Walters Vietnam, observed that major corporations have established clear pipelines for requesting time off and handing off projects. "Many firms view downtime as a routine part of daily operations, not as a sign of slacking off," Phuc explained.

Annual leave policies have become a trending topic across social media, sparking hundreds of posts and commentary. Alongside grievances about stubborn managers preventing them from taking days off, many workers are also reporting the exact opposite dilemma: being pressured or forced to fully use their leave.

Professor Andreas Stoffers, a Southeast Asian business specialist at FOM University of Applied Sciences in Germany, observed to VnExpress that having to push employees into taking leave stems from deference to authority, a culture where staff rarely take initiative without top-down permission, and a stubborn workplace tendency to equate loyalty with face time at the office.

In Vietnam, exposure to foreign work environments—notably Japanese and South Korean corporate cultures—has introduced rigid workplace habits. Meanwhile, an oversupply of college graduates has driven many into positions below their qualifications, steadily eroding basic employee protections and benefits.

Yet that culture is beginning to turn. While the practice serves companies well, Hieu cautioned that forcing employees into last-minute leave crunches at year-end can backfire. Lingering anxieties about unfinished deadlines often lead workers to log in reluctantly from home, ending in exhaustion. He urged businesses to adopt flexible frameworks, allowing staff to schedule extended time off well in advance, roll over days, or receive financial compensation when ongoing deliverables cannot be put on pause.