EMPLOYEES’ MONTHLY, ANNUAL OVERTIME HOURS IN THE CONTEXT OF COVID-19 PREVENTION AND SOCIO-ECONOMIC DEVELOPMENT
On march 23, 2022, the national assembly standing committee approved Resolution 17/2022/UBTVQH15 employees’ monthly, annual overtime hours in the context of COVID-19 prevention and socio-economic development.
Previously, according to the provisions of the Labor Code, an employer has the right to request an employee to work overtime and shall ensure the total overtime working hours do not exceed 200 hours in 01 year, except for fields, works, jobs and cases prescribed by the Government.
In that spirit, the General Department of Taxation and local tax offices also issued a number of official letter guiding the cost of overtime work exceeding the level as prescribed: Official Letter 794/CTBNI-TTHT dated May 7, 2021, Official Letter 27001/CT-TTHT dated April 26, 2019, Official Letter 2323/TCT-CS dated June 15, 2015. To be specific, the standpoint of these official letter is that is if the companies pay overtime salary in excess of the allowable threshold, the corresponding costs will not be included in the deductible expenses.
However, with the goal of economic recovery and development after more than 2 years of being affected by the Covid-19 pandemic, The National Assembly Standing Committee approved Resolution 17/2022/UBTVQH15 on employees’ monthly, annual overtime hours in the context of covid-19 prevention and socio-economic development (Herein after referred as “Resolution 17”).
Specifically:
The employer may request the employee for overtime work for more than 200 hours but not exceeding 300 hours in 01 year upon obtaining the employees’ acceptance (Clause 1 Article 1);
The employers, who are allowed to assign the employees for overtime as high as 300 hours in 01 year and have employees’ acceptance, may assign the employee for overtime work for more than 40 hours but not exceeding 60 hours in 01 month (Article 2).
The above provisions do not apply to specific cases of employees mentioned in Clause 1, Article 1 of Resolution 17 and do not apply to cases in Clause 3, Article 107 of the Labor Code 2019. Resolution 17/2022/UBTVQH15 takes effect from April 1, 2022; however, Clause 1, Article 1 of this Decree takes effect from January 1, 2022.
Therefore, from January 1, 2022, the employers may arrange the employees for overtime work for more than 200 hours but not exceeding 300 hours in 01 year in case of obtaining the employee’s consent. Employees shall be required to send written notice to the director Labor management office as prescribed in Clause 4, Article 107 of the Labor Code 2019. Expenses incurred for overtime work for more than 200 hours without employee’s consent or without written notice to the specialized labor agency; or overtime working hours exceeding 300 hours in 01 year shall be excluded from deductible expenses when determining taxable income.
Should you have any concerns during the process of implementing the regulations, please contact RSM Vietnam.
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