Under the 2019 Labor Code of Vietnam, there is no specific legal definition of a “Lunar New Year (Tết) bonus.” Instead, the law provides a general regulation on bonuses.
Specifically, Article 104 of the 2019 Labor Code states:“A bonus is an amount of money, property, or other forms that an employer awards to an employee based on the employer’s business performance and the employee’s work performance.”
Accordingly, in principle, bonuses (including the Lunar New Year bonus) are not mandatory payments under the law, but are determined based on:
- The company’s production and business results
- The employee’s level of job performance
- The bonus policy issued by the employer
When is an employer required to pay a Lunar New Year bonus?
Although the law does not require employers to provide a Lunar New Year bonus, in certain cases, the bonus may become an obligation if it is:
- Clearly stipulated in the labor contract
- Regulated in a collective labor agreement
- Specified in the company’s bonus policy, internal regulations, or other internal documents
- Considered a long-established practice applied consistently over many years, giving employees a reasonable expectation
In such cases, the failure to pay or the unilateral change of the bonus policy without proper consultation or agreement may lead to labor disputes.
Does an employer have the right to adjust or cut the Lunar New Year bonus?
In practice, many businesses face financial difficulties and are forced to adjust their Lunar New Year bonus policies.
From a legal perspective:
- Employers have the right to decide the bonus amount or not to pay a bonus if the Lunar New Year bonus has not been contractually committed in writing
- However, any change should be communicated transparently, with clear explanations of the reasons
- If the Lunar New Year bonus is clearly stipulated in a labor contract or collective labor agreement, the employer cannot unilaterally eliminate or reduce it
How a company communicates its bonus policy during difficult times plays a crucial role in maintaining employee morale and trust.
The Lunar New Year bonus is more than a legal issue
Even though it is not legally mandatory, the Lunar New Year bonus carries significant importance from a human resources perspective. It directly affects:
- Employee engagement and retention
- Post-Tết turnover rates
- The company’s image and reputation in the labor market
Many businesses choose flexible approaches such as incentive bonuses, performance-based bonuses, or non-monetary benefits to ensure legal compliance while maintaining team morale.
Conclusion
From a legal standpoint, the Lunar New Year bonus is not a mandatory obligation for employers. However, from a human resource management perspective, it is a decision with long-term implications for organizational stability and growth.
A proper understanding of legal regulations, combined with a transparent bonus policy and clear communication, helps businesses minimize the risk of labor disputes while maintaining employee trust—especially during the sensitive year-end period.
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