Vietnam: Are employers required to advance salaries for employees? Is the salary advance charged interest?
Are Vietnamese employers required to advance salaries for employees?
According to the provisions of Article 97, Article 101, Article 113 of the Labor Code 2019, in the following cases, the employer is required to advance the salary to the employee:
- Pursuant to the provisions of Clause 3, Article 97 of the Labor Code 2019, an employee who receives a piece rate or a fixed amount shall be paid as agreed by both parties. In case a task cannot be completed within one month, the employee shall receive a monthly advance payment based on the amount of work done in the month.
- Pursuant to the provisions of Clause 2, Article 101 of the Labor Code 2019, The employer must make the advance payment to the employee for the number of days the employee temporarily leaves his/her work in order to perform duties of citizens for a period of 01 week or longer, but the advance shall not exceed 01 month’s salary. The employee must reimburse the advance.
.- According to the provisions of Article 113 of the Labor Code 2019 (guided by Article 65, Article 66, Article 67 of Decree 145/2020/ND-CP), when an employee takes his/her annual leave before salary payment is due, he/she may receive an advance.
- Pursuant to the provisions of Clause 2, Article 128 of the Labor Code 2019, during the suspension, the employee shall receive an advance of 50% of his/her salary entitled prior to the suspension.
Thus, according to the above provisions, the current labor law does not stipulate that enterprises must advance salary to employees in all cases, but are only required to make salary advances in certain cases as determined.
At the same time, it can be understood that in case the employee wants to advance the salary and falls into one of the four cases mentioned above, the company cannot refuse the advance.
In case the employee agrees to advance (not in 04 cases where the advance is required), the company can decide whether to accept the advance or not. At that time, the refusal of advance will not be against the law.
Vietnam: Are employers required to advance wages for employees? Is the salary advance charged interest? (Image from the Internet)
Vietnam: Is the salary advance charged interest?
Pursuant to Article 101 of the Labor Code 2019, the provisions on salary advances are as follows:
Salary advances
1. An employee may receive an interest-free salary advance in accordance with conditions agreed on by the two parties.
2. The employer must make the advance payment to the employee for the number of days the employee temporarily leaves his/her work in order to perform duties of citizens for a period of 01 week or longer, but the advance shall not exceed 01 month’s salary. The employee must reimburse the advance.
An employee who is conscripted in accordance with the Law on Conscription may not receive salary advance.
3. When taking annual leave, an employee shall receive an advance payment of at least salary for the entitled days of leave.
Thus, the employee and the employer can agree on the conditions for advance salary.
At the same time, when agreeing to advance the salary as agreed, the employer is not entitled to charge interest.
Are enterprises in Vietnam entitled to withhold the salary of employees?
Pursuant to Article 94 of the Labor Code 2019 on the principle of salary payment to employees is prescribed as follows:
Salary payment rules
1. Employers shall directly, fully and punctually pay salaries to their employees. In the cases where an employee is not able to directly receive his/her salary, the employer may pay it through a person legally authorized by the employee.
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Accordingly, enterprises are responsible for paying full salaries to employees. The fact that enterprises withhold 15% of employees' salaries is not consistent with the above principle.
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