Tet bonus fails to deliver festive cheer in major cities

With less than two weeks to go for Tet, the nation’s most important festival, the number of enterprises reporting bonus payments is extremely small compared to the number of business registrations, reports from provinces and cities show.

For the previous Lunar New Year, more than 30,000 businesses nationwide reported Tet bonuses, with workers receiving an average at VND6.36 million, down 5 percent compared to the previous year, as the country struggled with the first year of Covid.

This year, the ministry has not officially revealed the official Tet bonus figures, although the deadline for localities to report was December 29, 2021.

HCMC, the country’s largest economic hub and for long the epicenter of fourth, ongoing Covid-19 wave, has more than 200,000 businesses operating, only 1,000 or so, about 0.5 percent, have reported payment of Tet bonuses to 175,000 workers.

According to a study by the HCMC Department of Labor, Invalids and Social Affairs, the average Tet bonus paid to workers this year is VND8.8 million ($386.76), the same as last year. The highest bonus was VND1.3 billion, given by a foreign-invested enterprise.

More than 500 enterprises, accounting for half of the total number of units reporting Tet bonuses, have been struggling to pay them because of reduced orders and stagnant production.

The study found that the highest bonuses will be paid in the power, electronics, finance, insurance and banking sectors. Most small-scale firms will pay out lower bonuses than last year.

The southern province of Dong Nai, home to 1.2 million workers, was also heavily affected by the fourth coronavirus wave. Around 1,000 enterprises, accounting for half of total operating businesses, have reported Tet bonuses that are the same or lower than last year.

The highest bonus paid out in the province was VND800 million – to the CEO of a foreign-invested firm, and the lowest was VND1.75 million.

Last week, around 16,000 workers at a factory of Taiwanese-invested footwear maker Pou Chen Vietnam in Dong Nai Province went on strike to protest the company’s Tet bonus cuts.

The company announced that employees who have worked for it a full year or more will be given bonuses of 1-1.54 months’ salary – around VND5 million ($217) to nearly VND20 million. The highest bonus in 2021 was 1.87 months’ salary, and in previous years, 2.2 months.

After negotiations between the leaders of the company and the labor union, the Tet bonus was kept the same as last year and workers returned to work Wednesday.

Though northern localities have been less affected than their southern counterparts by the fourth coronavirus wave, Hanoi has recorded a slight decrease in Tet bonus payments compared to the previous year.

Hanoi has nearly 318,000 businesses registered to operate with more than 4.17 million employees but only 6,200 enterprises, or nearly 2 percent, have reported Tet bonus payments.

The average bonus paid by Hanoi firms ranges from VND3.2 to 4.2 million; with the highest one of VND400 million paid by a private enterprise.

Industrial hub Bac Giang, a major coronavirus hotspot last year, has completely restored production. Nearly 280 businesses out of a total of more than 400 operating in the province have reported Tet bonus payments – the highest of nearly VND228 million given by a FDI enterprise and the lowest at just VND100,000.

In Bac Ninh, home to tech giants such as Samsung, employees have received average Tet bonuses of VND5.45 million with the highest of VND212 million paid by a foreign invested firm.

In Da Nang, usually considered the third most important city in Vietnam, the highest bonus was over VND1.4 billion, given by a tech firm, 11 times higher than last year.

In Vietnam, bonuses are based on agreements between employers and employees. The government encourages firms to reward employees based on performance.

The law says bonus payments depend on performance and are not mandatory, but it is considered the biggest and most anticipated reward for workers and a major factor in employees deciding to remain at a company or quit.

Le Van Thanh, Deputy Minister of Labor, War Invalids and Social Affairs, has said that the Tet bonus for the Year of Tiger is likely to be equal or even lower than the previous year. After two years of the pandemic, the backup sources of many businesses are almost exhausted, he said.

Many business units have recorded losses or insignificant profits, but still have to manage to pay full wages for employees, so paying Tet bonus has become even more stressful, he added.

In addition to Tet bonuses, businesses need to be flexible with their policies to retain employees and make them return to work after the holiday. They generally motivate workers to return with plane or train tickets as well as “lucky money.”

Thanh said his ministry is considering several programs to revive the labor market. These will cover many areas including provision of minimum living expenses, travel and healthcare expenses, direct cash support and even provision of temporary accommodation to attract migrant workers back to major cities.