Vietnam: How many days will employees work be rewarded with 13th month salary? Does Tet bonus have to minus social insurance premiums?
How many days will employees work be rewarded with 13th-month salary in Vietnam?
Currently, there are no regulations on the concept of 13th-month salary
However, it can be understood that the 13th-month salary is understood as the Tet bonus that the company gives to employees for the purpose of supporting and encouraging employees to work. Employers are usually entitled to a 13th month salary at the end of the year before the Lunar New Year holiday.
Pursuant to Article 104 of the Labor Code 2019 of Vietnam, it is as follows:
Article 104. Bonuses
1. A bonus means an amount of money, a piece of property or item that is provided by an employer for his/her employees on the basis of the business performance or the employees’ performance.
2. A bonus regulation shall be decided and publicly announced at the workplace by the employer after consultation with the representative organization of employees (if any).
According to the above regulations, since the 13th month salary is considered a bonus, there is no regulation on the number of working days of the employee to be rewarded with the 13th month salary. How many days the job will be rewarded with the employee's 13th month salary based on the agreement of the employee and the employer.
However, usually employers will rely on the following conditions to reward employees with 13th month salary:
– Have a written labor contract with definite or indefinite term;
– Have a continuous working period of 01 month or more up to the time of calculating the 13th month salary.
– Still continue to work for the business until the time of calculating the 13th month salary.
Vietnam: How many days will employees work be rewarded with 13th month salary? Does Tet bonus have to minus social insurance premiums?
Is the employer obliged to pay Tet bonus, 13th-month salary when the employee quits before Tet holiday of Vietnam?
Pursuant to Article 48 of the Labor Code 2019 of Vietnam, it provides as follows:
Article 48. Responsibilities of the parties upon termination of an employment contract
1. Within 14 working days following the termination of an employment contract, both parties shall settle all payments in respect of the rights and interests of each party. In the following cases, such period may be extended, but shall not exceed 30 days:
a) Shutdown of business operation of the employer that is not a natural person;
b) Changes in the organizational structure, technology or changes due to economic reasons;
c) Full division, partial division, consolidation, merger of the enterprise; sale, lease, conversion of the enterprise; transfer of the right to ownership or right to enjoyment of assets of the enterprise or cooperative;
d) Natural disasters, fire, hostility or major epidemics.
2. Priority shall be given to payment of the employees’ salaries, social insurance, health insurance, unemployment insurance, severance allowance and other benefits under the collective bargaining agreement and employment contracts in case of shutdown, dissolution or bankruptcy of an enterprise or cooperative.
3. The employer has the responsibility to:
a) Complete the procedures for verification of duration of participation in social insurance and unemployment insurance, return them and original copies of the employee’s other documents (if any);
b) Provide copies of the documents relevant to the employee’s work if requested by the employee. The employer shall pay the cost of copying and sending the documents.
Thus, in case the employee and the employer have an agreement on the Tet bonus, the 13th month salary in the labor contract if the employee completes the work norm, the employer is required to pay the Tet bonus in full, 13th month salary by agreement.
The payment of Tet bonus and 13th month salary shall be made within 14 days from the date of termination of the labor contract, unless otherwise provided for by law.
Do Tet bonuses have to pay social insurance in Vietnam?
Pursuant to Official Dispatch 560/LDTBXH-BHXH in 2018, the instructions are as follows:
Monthly salary for compulsory social insurance contributions shall comply with the provisions of Article 89 of the Law on Social Insurance, Article 17 of the Government's Decree No. 115/2015/ND-CP dated November 11, 2015, Article 30 of Circular No. 59/2015/TT-BLDTBXH dated December 29, 2015 of the Ministry of Labor, War Invalids and Social Affairs.
According to the provisions of the above documents, from January 1, 2018 onwards, the monthly salary for social insurance contributions is the salary, salary allowance and other supplements. The monthly salary for compulsory social insurance contributions does not include other benefits and benefits, such as bonuses as prescribed in Article 103 of the Labor Code, initiative bonuses; mid-shift meals; gasoline, telephone, transportation, housing, child care, child support; support when the employee has a relative who dies, the employee has a relative who is married, the employee's birthday, allowances for employees in difficult circumstances when suffering from labor accidents, occupational diseases and other supports and allowances.
Tet bonus is not subject to social insurance contributions, but if according to the labor contract between the employee and the employer, this amount is recorded in the salary section, social insurance must still be paid
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