Fines up to 40,000,000 VND for employers who impose fines or cut wages of employees as a form of disciplinary action

Main Content

Are internal labor regulations compulsory for enterprises in Vietnam?

Based on Article 118 of the Labor Code 2019, the regulations are as follows:

“Article 118. internal labor regulations

1. An employer must issue internal labor regulations. If employing 10 or more employees, the internal labor regulations must be in writing.

2. The content of the internal labor regulations must not contradict the labor law and other relevant legal provisions. The internal labor regulations must include the following main contents:

a) Working hours and rest periods;

b) Order in the workplace;

c) Occupational safety and hygiene;

d) Prevention and handling procedures for sexual harassment in the workplace;

dd) Protection of assets, business secrets, technological secrets, and intellectual property of the employer;

e) Cases where employees may be temporarily assigned to tasks other than those agreed in the labor contract;

g) Labor discipline violations by employees and disciplinary measures;

h) Material responsibility;

i) Persons authorized to handle labor discipline.

3. Before issuing or modifying internal labor regulations, the employer must consult with the representative organization of employees at the workplace where one is present.

4. The internal labor regulations must be communicated to the employees, and the main contents must be posted at necessary locations within the workplace.

5. the Government of Vietnam specifies the details of this Article.”

Thus, only employers who employ 10 or more employees are required to issue internal labor regulations.

The internal labor regulations must include contents as stated above.

Fines up to 40,000,000 VND for penalizing or cutting wages instead of implementing labor discipline? (Image from the internet)

What Disciplinary Measures Are There for Employee Misconduct?

According to Article 124 of the Labor Code 2019, the disciplinary measures include:

- Reprimand.

- Extension of wage increase period not exceeding 06 months.

- Demotion.

- Dismissal.

Only these four disciplinary measures are legally prescribed. Other disciplinary measures not specified above are unlawful.

Is It a Legal Violation for Employers to Penalize or Cut Employees’ Wages?

According to Article 19 of Decree 12/2022/ND-CP, the regulations state:

“Article 19. Violations of workplace discipline and material responsibility

1. A fine of 1,000,000 VND to 3,000,000 VND for an employer failing to notify internal labor regulations to all employees or failing to publicly post the main contents of the internal labor regulations at necessary locations within the workplace.

2. A fine of 5,000,000 VND to 10,000,000 VND for an employer committing any of the following acts:

a) No written internal labor regulations when employing 10 or more employees;

b) Failing to register internal labor regulations as prescribed by law;

c) Failing to consult the representative organization of employees at the workplace before issuing or modifying internal labor regulations;

d) Using internal labor regulations that are not effective or expired;

đ) Handling labor discipline or compensating for damages inappropriately or beyond the statute of limitations prescribed by law;

e) Suspending work beyond the legal period;

g) Suspending an employee without consulting the representative organization of employees at the workplace if the suspended employee is a member of such an organization.

3. A fine of 20,000,000 VND to 40,000,000 VND for an employer committing any of the following acts:

a) Violating the health, honor, life, reputation, or dignity of an employee when handling labor discipline without reaching the level of criminal prosecution;

b) Using financial penalties or wage cuts instead of implementing labor discipline;

c) Disciplining employees for actions not stipulated in the internal labor regulations or not agreed upon in the labor contract or not prescribed by labor law;

d) Applying multiple disciplinary measures for a single violation;

đ) Disciplining employees during the following periods: sick leave; recovery leave; legally approved leave; detention; awaiting investigation results by competent authority regarding the violation defined in Clauses 1 and 2 of Article 125 of the Labor Code.

4. Remedial measures

a) Requiring the employer to reinstate the employee and pay full salary according to the labor contract for days the employee was off work if the employer dismissed the employee in violation of Point đ Clause 2, Point c Clause 3 of this Article;

b) Requiring the employer to pay full salary for suspension days if violating Points e, g Clause 2 of this Article;

c) Requiring the employer to publicly apologize and cover all treatment costs if the infringement warrants medical treatment as per Point a Clause 3 of this Article;

d) Requiring the employer to return collected money or pay full wages for violations stipulated in Point b Clause 3 of this Article.”

Using financial penalties or wage cuts instead of implementing labor discipline can incur administrative fines up to 40 million VND. Since these actions incur administrative fines, such actions by an employer are deemed legal violations.

Additionally, administrative fines for violations of workplace discipline and material responsibility will be applied as prescribed. Employers are also required to take remedial actions as prescribed above.

Note: Administrative sanctions apply to individuals only. For organizational violations, the administrative fine will be doubled.