Factories handing out hefty Tet bonuses despite drop in orders

Ever since she received an announcement that her Tet (Lunar New Year) bonus this year would be 30% higher than last year, Huynh Truc My Kha, 42, an employee ofPouyuen Vietnam Co., in HCMC has been more joyous coming to work.

When Kha first heard news that factories were laying off workers right before Tet, she was extremely worried. Pouyuen had earlier announced that 18,000 workers would have to take alternative Saturdays off from December 2022 to February 2023 due to a drop in the number of orders.

In Tet last year, those with the biggest holiday bonuses received an extra 1.54 months’ of salary, and for the Tet before that 1.87 months. After two years under Covid-19, the amount of Tet bonuses this year has returned to the same level it was before the pandemic hit, or up to 2.2 months.

After working at the company for over two decades, Kha would receive the highest Tet bonus for someone at her level, set at around VND26 million ($1,106).

“After the company announced the Tet bonuses, our worries all went away,” she said. “We all checked our phones and everyone was happy.”

Kha is one among over 130,000 workers at eight factories under the Pouchen International Corp., who will receive their Tet bonuses despite the manufacturer still in a tough spot.

A representative of Pouchen said the raise in Tet bonuses is to help relieve burdens for workers, despite the number of orders dropping towards the end of the year. The representative said there would be more challenges ahead in 2023, but added that he hoped employees would continue to work in the company’s factories.

Le Nhat Truong, union head of Pousung Vietnam Co. at Bau Xeo Industrial Park in Dong Nai Province that borders HCMC, said the fact that the amount of bonuses in 2023 is the same as it was in the pre-pandemic period represented a great effort by businesses keen to keep workers happy.

Similarly, over 20,000 workers at the Freetrend Industrial Vietnam Co. in HCMC’s Linh Trung I Export Processing Zone received 20% more Tet bonuses this year compared to last year, the same level as in the pre-pandemic period.

Lieu Quang Vinh, union head of the company, said that factory’s orders first showed signs of dropping starting in the third quarter of the year. Since October, workers have had to take Saturdays off and overtime was canceled. Vinh said this situation is likely to persist next year as the number of orders is expected to continue dropping.

Vinh said the Tet bonus increase was to both share the burdens of workers and to encourage them to return to work after the Tet holiday, which is Vietnam’s biggest and will last from January 20-26.

According to the Research Center for Employment Relations (ERC), major factories which are suppliers to global corporations often abide by local regulations as well as the brand’s policies. As such, commitments and agreements regarding labor and salaries must be fulfilled, except in certain cases, such as natural disasters or renegotiations.

An ERC representative said the Covid-19 pandemic was now under control, allowing business to resume operations, and that the lack of orders should not be an excuse for companies to not follow their agreements regarding worker bonuses. Tet bonuses are also a way to retain skilled workers as production returns to normal levels, he added.

Le Dinh Quang, deputy head of the employment relations department under the Vietnam General Confederation of Labor, said Tet bonuses are not compulsory under current regulations. The fact that companies still hand out large Tet bonuses compared to last year, and despite the lack of orders, means companies are willing to share the burdens of their workers.