You get paid if you don't 'use' all your vacation days.

I'm entitled to 12 days of annual leave. My company has a rule that if I don't use all of it, I'll lose it. Is this correct?

My company stipulates that employees are entitled to 12 days of annual leave, which can be extended to the second quarter of the following year. If an employee does not use all of their leave days, the remaining days are forfeited.

Excuse me, is this regulation correct?

Reply:

According to Article 111 of the 2012 Labor Code, businesses must develop an annual leave plan for their employees.

If an employee does not use all of their leave and works as usual, the company must pay their salary. If they wish to accumulate leave for a longer period next year, they must continue to do so, up to a maximum of three years at a time.

Specifically: "1. Employees who have worked for an employer for 12 months are entitled to annual leave with full pay as stipulated in their employment contract as follows:

a) 12 working days for those working under normal conditions;

b) 14 working days for those performing strenuous, hazardous, or dangerous work, or those working in places with harsh living conditions, as listed in the catalog issued by the Ministry of Labour, Invalids and Social Affairs in coordination with the Ministry of Health, or for underage workers or workers with disabilities;

c) 16 working days for those performing exceptionally strenuous, hazardous, or dangerous work, or those working in places with exceptionally harsh living conditions, according to the list issued by the Ministry of Labour, Invalids and Social Affairs in coordination with the Ministry of Health.

2. Employers have the right to determine the annual leave schedule after consulting with employees and must notify employees in advance.

3. Employees may agree with their employers to take annual leave in multiple installments or accumulate leave for up to three years at a time.

4. When taking annual leave, if the employee travels by road, rail, or water and the total travel time (round trip) exceeds two days, the travel time from the third day onwards will be added to the annual leave days and will only be counted for one leave period per year.

If, after the accumulated leave has been carried over to the next year, the employee still does not take the leave and has remaining days, the company must pay for it.This is stipulated in the collective labor agreement between the two parties and Article 26 of Decree 05/2015/ND-CP guiding some contents of the Labor Code.

Accordingly, the salary used as the basis for paying employees for unused annual leave days or days not fully utilized is stipulated as follows:

a) For employees who have worked for 6 months or more, the average salary according to the employment contract for the 6 consecutive months preceding the employee's termination or job loss is used. For employees who have not taken their annual leave or have not used all their annual leave days for other reasons, the average salary according to the employment contract for the 6 consecutive months preceding the employer's payment for the unused annual leave days is used;

b) For employees with less than six months of service, the average salary is the salary stipulated in the employment contract for the entire period of employment.

The wages paid to employees for unused or partially used annual leave days are calculated by dividing the wage stipulated in Clause 3 of this Article by the number of normal working days as prescribed by the employer in the immediately preceding month before the employer calculates the payment, and then multiplying this by the number of unused or partially used annual leave days.

Le Van Thanh
Deputy Director of the Department of Labor Relations and Wages
Ministry of Labour, Invalids and Social Affairs

According to VNE