Companies in Vietnam are increasingly requiring staff to use up their annual leave before the end of the year. The trend matters because it reshapes how employees plan rest and how businesses manage their workforce.

HR instructed Minh Thuong to schedule and use all 10 remaining days of leave before December, and the notice made clear that unused days could not be cashed out. She therefore had to take the full ten days off.

Dr. Le Trung Hieu says the practice is adopted from foreign enterprises. He lists four reasons: first, untaken vacation days become financial liabilities on corporate ledgers; second, mandatory leave helps companies stay compliant with occupational health and safety codes; third, it gives the organization time to recover operationally when staff are absent; fourth, for firms that pay by project output, it reduces overhead costs such as electricity and office supplies.

Germany’s Federal Labor Court requires employers to urge staff to take statutory leave, imposing fines up to €30,000 for non‑compliance. Dr. Le Trung Hieu noted that multinational corporations, joint ventures and publicly listed firms regularly audit leave balances and enforce mandatory use of leave, often limiting consecutive absences.

According to Dr. Le Trung Hieu, forcing employees to take leave at year‑end can backfire, leading to anxiety, remote work during vacation, and exhaustion. He warned that such pressure may reduce the intended rest and harm productivity.

The push for mandatory leave is driven by financial, legal, operational and cost‑saving motives, but companies must balance these goals with employee wellbeing. Understanding these reasons helps workers anticipate policies and protect their work‑life balance.