Paying employees less than the regional minimum wage in Vietnam, businesses can be fined up to 150,000,000 VND?
How is the minimum wage that the employer must pay the employee?
Pursuant to Article 91 of the Labor Code 2019 stipulates as follows:
“Article 91. Minimum wage
1. Minimum wage is the lowest salary paid to employees who perform the simplest jobs under normal working conditions in order to ensure the minimum standard of living of employees and their families, in accordance with the provisions of the law. economic and social development.
2. The minimum wage is set by region, set by month and hour.
3. The minimum wage is adjusted based on the minimum living standards of workers and their families; the correlation between the minimum wage and the market wage; consumer price index, economic growth rate; labor supply and demand relationships; employment and unemployment; labor productivity; the company's ability to pay.
4. The Government shall detail this Article; decide and announce the minimum wage on the basis of recommendations of the National Wage Council.”
Accordingly, the minimum wage is the lowest salary paid to employees who do the simplest jobs in normal working conditions in order to ensure a minimum standard of living for employees and their families.
Paying employees less than the regional minimum wage in Vietnam, businesses can be fined up to 150,000,000 VND? (Image source: Internet)
What is the regional minimum wage applied to employees working under labor contracts?
Currently, the regional minimum wage in Vietnam for employees working under labor contracts are specified in Article 3 of Decree 90/2019/ND-CP as follows:
“Article 3. Regional minimum wage
1. The regional minimum wage regulations applicable to employees working in enterprises are as follows:
a) The level of 4,420,000 VND/month, applicable to enterprises operating in the area of region I.
b) The level of 3,920,000 VND/month, applicable to enterprises operating in the area of region II.
c) The level of 3,430,000 VND/month, applicable to enterprises operating in the area of Region III.
d) The level of 3,070,000 VND/month, applicable to enterprises operating in the area of Region IV.
2. Areas in which the regional minimum wage applies are defined by administrative units at district, town, town and provincial-level administrative units. The list of areas to which the minimum wage applies in regions I, II, III and IV is specified in the Appendix to this Decree.”
However, from July 1, 2022, the regional minimum wage for employees working under labor contracts will be changed according to Clause 1, Article 3 of Decree 38/2022/ND-CP, as follows:
- Region I: the minimum monthly salary will be 4,680,000 VND, the minimum hourly wage will be 22,500 VND.
- Region II: the minimum monthly salary will be 4,160,000 VND, the minimum hourly wage will be 20,000 VND.
- Region III: the minimum monthly salary will be 3,640,000 VND, the minimum hourly wage will be 17,500 VND.
- Region IV: the minimum monthly salary will be 3,250,000 VND, the minimum hourly wage will be 15,600 VND.
Thus, the application of the regional minimum wage in VIetnam will be implemented in accordance with the above provisions.
What is the penalty for paying less than the regional minimum wage in Vietnam?
Pursuant to Article 17 of Decree 12/2022/ND-CP stipulating as follows:
“Article 17. Violations against regulations on wages
1. A fine of between VND 5,000,000 and 10,000,000 shall be imposed on the employer who commits one of the following acts:
a) Failing to publicly announce at the workplace before implementation: salary scale, salary table; labor level; bonus regulations;
b) Failing to develop a salary scale, wage table or labor norms; does not apply the trial labor rate before officially promulgating;
c) Failing to consult the representative organization of employees at the grassroots level for the place where the representative organization of employees is located when formulating the salary scale and salary table; labor norms; bonus regulations;
d) Failure to notify the salary statement or notifying the employee salary list but not in accordance with regulations;
dd) Failing to pay equal wages or discriminate against employees doing work of equal value.
...
3. A fine shall be imposed on the employer for the act of paying the employee a salary lower than the minimum wage prescribed by the Government at the following levels:
a) A fine ranging from VND 20,000,000 to VND 30,000,000 for violations from 01 to 10 employees;
b) A fine ranging from VND 30,000,000 to VND 50,000,000 for violations of between 11 and 50 employees;
c) A fine ranging from VND 50,000,000 to VND 75,000,000 for violations of 51 or more employees.
...
5. Remedial measures
a) Forcing the employer to pay the full salary plus the interest on the late payment or underpayment to the employee calculated at the highest interest rate on demand deposits of state commercial banks announced at the time of sanctioning for violations specified in Clauses 2 and 3 of this Article;
b) Forcing the employer to pay in full an amount equivalent to the compulsory social insurance, health insurance, and unemployment insurance premium plus the interest on such amount calculated at the interest rate on deposits that are not the highest term announced by state-owned commercial banks at the time of sanctioning employees for violations specified in Clause 4 of this Article.”
Thus, the act of paying employees less than the regional minimum wage in Vietnam will be based on the number of violated employees to determine the level of administrative sanction for employees according to the above provisions.
In addition, the employer is also required to take remedial measures according to the above provisions.
Note: The level of administrative sanction according to the above provisions only applies to violators. In case the organization violates, the administrative sanction is double, ie the maximum fine for enterprises will be 150,000,000 VND.
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