To support enterprises to deal with the labor shortage during the Covid-19 pandemic, on 23 March 2022, the Standing Committee of the National Assembly of Vietnam passed Resolution 17 to loosen the overtime limit of employees as compared to the Labor Code 2019 (Resolution 17/2022).

Annual overtime hours

Under Article 107.2(c) of the Labor Code 2019 and Article 61 of Decree 145/2020, the overtime hours of employees is capped at 200 hours per year, except for certain specific cases where the employees can work overtime up to 300 hours/year. Exceptional cases are limited to some production industries, or certain circumstances (e.g. to resolve tasks requiring high expertise or technical skills where the labour market cannot satisfy, or in emergency situations), or other cases allowed by the Government.

Short answer: Yes, subject to some mitigants of risks as discussed below.

Vietnamese law has no clear-cut distinction between an employment relationship and a commercial relationship (e.g. service agreement). It is because the definitions of employment relationship and employment contract in the Labour Code 2019 are unclear and broad. For instance,

(1) The Labour Code 2019 defines “employment relationship” as social relations arising during the hiring and employment of workers and during wage payment as between employees, the employer, organizations representing the parties and the competent State agency. Under the Commercial Law 2005, “provision of services” is defined as a commercial activity whereby one party (hereinafter referred to as the service provider) is obliged to provide services to another party and receives payment; and whereby the party using the services (hereinafter referred to as the client) is obliged to pay the service provider and to use the services in accordance with an agreement. These definitions are broad and not specific enough to distinguish such relationships. In both cases, there will be an engagement and payment between the hiring party and the hired party.