What are the regulations on the amount paid for untaken annual leave days in Vietnam?
What are the regulations on the amount paid for untaken annual leave days in Vietnam?
Under Clause 3, Article 113 of the Labor Code 2019:
Annual leave
...
3. An employee who, due to employment termination or job loss, has not taken or not entirely taken up his/her annual leave shall be paid in compensation for the untaken leave days.
Payment for unused annual leave days of an employee in Vietnam will follow the salary agreed upon by the employee and employer.
What are the regulations on the amount paid for untaken annual leave days in Vietnam?
Will an employee unilaterally terminating the employment contract in Vietnam receive the amount for unused annual leave days?
Under Article 113 of the Labor Code 2019:
Annual leave
1. Any employee who has been working for an employer for 12 months is entitled to fully-paid annual leave, which is stipulated in his/her employment contract as follows:
a) 12 working days for employees who work in normal working conditions;
b) 14 working days for employees that are minors, the disabled, employees who do laborious, toxic or dangerous works;
c) 16 working days for employees who do highly laborious, toxic or dangerous works.
2. An employee who has been working for an employer for less than 12 months will have a number of paid leave days proportional to the number of working months.
3. An employee who, due to employment termination or job loss, has not taken or not entirely taken up his/her annual leave shall be paid in compensation for the untaken leave days.
4. The employer has the responsibility to regulate the timetable for annual leaves after consultation with the employees and must give prior notice to the employees. An employee may reach an agreement with the employer on taking annual leave in instalments or combining annual leave over a maximum period of up to 03 years.
5. When an employee takes his/her annual leave before salary payment is due, he/she may receive an advance in accordance with Clause 3 Article 101 of this Labor Code.
6. When taking annual leave, should the employee travel by road, rail, water and the travel days, the traveling time in excess to 02 days will be added to the annual leave days, and this policy shall only be granted once for an annual leave in a year.
7. The Government shall elaborate this Article.
If an employee resigns and has unused annual leave days, the employer must pay the amount for those unused leave days.
Under Clause 1, Article 46 of the Labor Code 2019:
Severance allowance
1. In case an employment contract is terminated as prescribed in Clauses 1, 2, 3, 4, 6, 7, 9 and 10, Article 34 of this Code, the employer is responsible for paying severance allowance to the employee who has worked on a regular basis for a period of at least 12 months. Each year of work will be worth half a month’s salary, except for the cases in which the employee is entitled to receive retirement pension as prescribed by social insurance laws, and the cases specified in Point e Clause 1 Article 36 of this Labor Code.
The termination of an employment contract under Clause 9, Article 34 of the Labor Code 2019 is considered a resignation.
Clause 9, Article 34 of the Labor Code 2019 stipulates as follows:
Cases for Termination of employment contracts
...
9. The employee unilaterally terminates the employment contract according to Article 35 of this Code.
According to Article 39 of the Labor Code 2019:
Illegal unilateral termination of employment contracts
The unilateral termination of an employment contract will be illegal if it does not comply with regulations of Article 35, 36 and 37 of this Labor Code.
Under the above stipulations, if the employee unilaterally terminates the employment contract in conformity with the regulations, they will be paid for the unused annual leave days.
If the employee unilaterally terminates the employment contract against the regulations, this will not be considered a resignation. In this case, the employee will not be paid for the remaining unused annual leave days.
Will penalties be imposed on employers failing to pay for unused annual leave days in Vietnam?
Under Clause 2, Article 17 of Decree 12/2022/ND-CP:
Violations against regulations on salaries
...
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.
The employer will be subject to administrative penalties according to the above regulations if it fails to pay for the unused annual leave days when an employee resigns.
The administrative penalty will be determined based on the number of affected employees.
Note: that the administrative fine above applies to individual violators. In the case of organizational violations, the fine will be double that of individual violations.
Moreover, the employer is required to pay the full amount and interest to employees for the unused annual leave days when they resign.
LawNet