The ups and downs of Tet bonuses

(Baonghean) - Every Lunar New Year, what every worker looks forward to is receiving a bonus to help cover expenses and support their families. However, in the context of a still struggling economy and rising regional minimum wages, this year's bonus is predicted to be relatively stable.

Salaries increased, bonuses remain unchanged.

Following the directive from the Ministry of Labour, Invalids and Social Affairs (MOLISA) regarding a quick report on the situation of wages and Tet bonuses for workers, the Department of Labour, Invalids and Social Affairs conducted an investigation and survey at 169 enterprises located in the area, including: 24 state-owned limited liability companies; 25 enterprises with state-owned shares or capital contributions; 90 private enterprises; and 30 enterprises with foreign direct investment (FDI).

Presenting Tet gifts for the Year of the Rooster 2017 to workers of Nghe An Packaging and General Trading Joint Stock Company. Photo: Thanh Cuong

According to the survey, the average Tet bonus that businesses awarded to employees this year ranged from 3.9 to 4.2 million VND per person (compared to 4.3 to 4.6 million VND in 2016); the highest bonus was 63 million VND per person and the lowest was 200,000 VND per person.

Specifically, in the group of state-owned companies, the highest bonus was 40 million VND/person, the average was 4.1 million VND/person, and the lowest was 200,000 VND/person; in the group of enterprises with controlling state-owned shares or capital contributions, the highest bonus was 50 million VND/person, the average was 4.2 million VND/person, and the lowest was 2 million VND/person; in the group of private enterprises, the highest bonus was 15 million VND, the average was 3.9 million VND/person, and the lowest was 1 million VND/person; in the group of FDI enterprises, the average bonus was 4.1 million VND/person, the highest was 60 million VND/person, and the lowest was 250,000 VND/person.

The summary also shows that, although bonuses have decreased compared to Tet 2016, average salaries have increased. Specifically, the average salary of workers in the area this year ranges from 4.3 to 4.6 million VND per person per month.

Compared to 2015, businesses in the area increased salaries by 12-15%. The highest salary paid was 60 million VND/person/month, while the lowest was 2.4 million VND/person/month. A question of concern for many workers is why salaries increased but bonuses decreased?

Retaining employees

According to the Labor Law, wages are understood as the compensation paid to employees and are stipulated in the Labor Law, while bonuses are determined by the employer.

Thus, although the State always encourages employers to provide benefits for their employees, labor law does not mandate the payment of bonuses, so employers are not obligated to pay bonuses during holidays and Tet (Lunar New Year).

Employers have the right to proactively and voluntarily pay bonuses to employees based on the company's production and business results, as well as the employees' performance. Only in cases where an agreement has been reached between the employee and the company in the labor contract or collective bargaining agreement regarding bonus payment, and the company fails to fulfill its commitment, do employees have the right to demand that the company fulfill its commitment or to initiate legal proceedings to resolve the issue.

Production line at Haivina Kim Lien Co., Ltd. Photo: MH

Holding over 7,000,000 VND in his hand, the 13th-month salary he had just received, Mr. Thai Van Tan, a worker at Phi Diep Trading Co., Ltd., happily shared: “I’ve been working at the company for over 3 years, and every year I receive this amount in advance to take home to my family to prepare for Tet (Lunar New Year), because I won’t be able to take time off in a few days. It’s not a lot, but how much is enough? I also have to think about the company. Thanks to this money, my family has been able to buy more things and have a more decent Tet celebration these past few years.”

Although she didn't receive a large bonus like Mr. Tan, Ms. Chu Thi Thuy, a worker at Haivina Kim Lien Co., Ltd., despite having only worked there for over 7 months, was informed that she would receive a 13th-month salary bonus (over 2,700,000 VND) and Tet gifts of a blanket and warm clothes. Although the amount wasn't much, Ms. Thuy was still happy because she understood that the garment industry wasn't doing well currently, so any bonus was a welcome relief.

Clearly, since the law doesn't mandate it, businesses cannot be compelled to give Tet bonuses to their employees. However, during every holiday, especially the Lunar New Year, businesses often provide a bonus, usually equivalent to a 13th-month salary, to motivate and encourage their employees.

Mr. Nguyen Van Phi, Director of Phi Diep Trading Company Limited, a company specializing in metals and metal ores, stated: "To attract workers and encourage their dedication to the company, and to retain skilled labor, in addition to paying fair salaries, we will allocate a portion of our funds as a Tet bonus for employees, usually equivalent to their 13th month salary."

With nearly 20 days left until the Lunar New Year holiday in 2017, the issue of Tet bonuses continues to receive significant attention. If businesses do not take steps to retain employees through reasonable salaries and bonuses, especially Tet bonuses, it will be very difficult to retain skilled workers, affecting employee trust in the company.

Canh Nam