Is it possible to pay employees in foreign currency? When will an employer have the right to deduct from an employee’s salary in Vietnam?
Vietnam: Is it possible to pay employees in foreign currency?
Salary payment is regulated in Article 95 of the Labor Code 2019 specifically as follows:
Salary payment
1. The employer shall pay the employee on the basis of the agreed salary, productivity and work quality.
2. The salary written in the employment contract and the salary paid in reality shall be VND, unless the employee is a foreigner working in Vietnam.
3. Every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay, nightshift pay and deductions (if any).
Thus, according to the above regulations, the salary written in the employment contract and the salary paid in reality shall be VND.
However, if the employee is a foreigner working in Vietnam, salary can be paid in foreign currency.
Vietnam: Is it possible to pay employees in foreign currency?
When will an employer have the right to deduct from an employee’s salary in Vietnam?
According to the provisions of Article 102 of the Labor Code 2019, regulations on specific salary deductions are as follows:
Salary deductions
1. An employer shall have the right to deduct from an employee’s salary only for the compensation for the damage to the employer’s equipment and assets in accordance with Article 129 of this Labor Code.
2. The employee has the right to be aware of the reasons for the deduction.
3. Any monthly deduction shall not exceed 30% of the net monthly salary of the employee, after the payment of compulsory social insurance, health insurance, unemployment insurance premiums and personal income tax.
Thus, based on the above regulations, an employer shall have the right to deduct from an employee’s salary for:
- Compensation for the damage to the employer’s equipment and assets according to regulations.
- Any monthly deduction shall not exceed 30% of the net monthly salary of the employee, after the payment of compulsory social insurance, health insurance, unemployment insurance premiums and personal income tax.
Note: The employee has the right to be aware of the reasons for the deduction.
Vietnam: What is the penalties for deducting from employees’ salaries in breach of law?
According to the provisions of Article 17 of Decree 12/2022/ND-CP regulating the handling of violations against regulations on salaries as follows:
Violations against regulations on salaries
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2. The following fines shall be imposed upon an employer for commission of one of the following violations: Failing to pay salaries on schedule as prescribed by law; failing to pay or insufficiently paying salaries to employees as agreed in their employment contracts; failing to make or insufficiently making overtime pay; failing to make or insufficiently making nightshift pay; failing to pay or insufficiently paying work suspension allowances as prescribed by law; restricting or interfering employees’ spending of their salaries; forcing employees to spend their salaries on goods or services of the employer or any particular providers decided by the employer; deducting from employees’ salaries in breach of law; failing to pay or insufficiently paying salaries to employees how are reassigned to perform works which are not specified in their employment contracts or during a strike; failing to make or insufficiently making payments to employees who, due to employment termination or job loss, have not taken or not entirely taken up their annual leave in compensation for their untaken leave days; failing to make or insufficiently making advance payments to employees who temporarily leave their works in accordance with regulations of law; failing to pay full salaries to employees who are not disciplined for their work suspension period:
a) A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 01 - 10 employees;
b) A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed if the violation involves 11 - 50 employees;
c) A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 51 - 100 employees;
d) A fine ranging from VND 30.000.000 to VND 40.000.000 shall be imposed if the violation involves 101 - 300 employees;
dd) A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed if the violation involves 301 employees or more.
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5. Remedial measures
a) The employer that commits the violation specified in Clause 2 or Clause 3 of this Article is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
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Thus, for deducting from employees’ salaries in breach of law, depending on the severity of the violation, there will be specific fines as follows:
- A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 01 - 10 employees;
- A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed if the violation involves 11 - 50 employees;
- A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 51 - 100 employees;
- A fine ranging from VND 30.000.000 to VND 40.000.000 shall be imposed if the violation involves 101 - 300 employees;
- A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed if the violation involves 301 employees or more.
In addition, the employer that commits such violation is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees
Note: The violating organization that incurs a fine which is twice as much as that imposed upon a violating individual as prescribed (according to Clause 1, Article 6 of Decree 12/2022/ND-CP).
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