In the current difficult epidemic situation, one of the solutions applied by most businesses is to cut down workers' wages to reduce the economic burden on their businesses. So how to reduce the employee's salary without violating regulations of the law of Vietnam.
Article table of contents
Option 1: Agreement to revise salary term in labor contract
The labor contract is signed based on a voluntary agreement between the enterprise and the employee. Pursuant to Article 33 of the Labor Code 2019 of Vietnam, the parties are permitted to revise the employment contract if there is a need during the performance of an employment contract. In case where an agreement is reached between the parties, the revisions shall be made by signing an annex to the employment contract or signing a new employment contract.
Thus, in case that enterprise wants to cut down an employer’ wages, the enterprise must have a dialogue and agreement with that employee on the adjustment of the salary term in the signed labor contract, the time and period of salary reduction and other binding terms between the parties (if any). In addition, an enterprise which wants to deal salary with employee must notify the employee at least 03 working days in advance.
If the employee agrees to share difficulties with the enterprise, the parties can agree to sign an annex to the employment contract to adjust the salary that the employee is currently enjoying. In case the employee disagrees with the salary reduction, the enterprise still have to pay the salary as agreed in the signed labor contract, but not arbitrarily reduce the employee's salary.
Option 2: Reassignment of an employee against the employment contract
Reassignment of an employee against the employment contract is 1 option to reduce employers’ salary in accordance with the law of Vietnam that enterprise can consider to apply.
Pursuant to Article 29 of the Labor Code 2019 of Vietnam, in the event of sudden difficulties such as natural disasters, fire, major epidemics, implementation of preventive and remedial measures for occupational accidents or diseases, electricity and water supply failures, or for reasons of business and production demands, the employer may temporarily assign an employee to perform a work which is not prescribed in the employment contract for an accumulated period of up to 60 working days within 01 year, unless otherwise agreed in writing by the employee. The reassigned employee will receive the salary of the new work. If the new salary is lower than the previous salary, the previous salary shall be maintained for 30 working days. The new salary shall be at least 85% of the previous salary and not smaller than the minimum wages.
The employer shall specify in the internal labor regulations the cases in which the employer may temporarily reassign employees against the employment contracts.
In case of temporary reassignment of an employee specified in Clause 1 of this Article, the employer shall inform the employee at least 03 working days in advance, specify the reassignment period and only assign works that are suitable for the employee’s health and gender.
The above are two options to reduce difficulties in the epidemic situation, enterprise can cut employee salary costs in the following ways while ensuring compliance with legal regulations. It should be noted that enterprises are responsible for paying wages directly, fully and on time to employees, in case of arbitrarily reducing employees' wages, it will be considered a violation of the law and will be administratively sanctioned according to Clause 2 Article 16 of the Decree No. 28/2020/ND-CP.
Bao Ngoc
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