Vietnam: Shall an employer have the right to deduct from an employee’s salary for disturbance at work?

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• Is salary deduction considered a form of labor disciplinary measure in Vietnam?
• Vietnam: Shall an employer have the right to deduct from an employee’s salary for disturbance at work?
• Vietnam: Shall an employer deducting from employees’ salaries in breach of law pay interests on deducted amount from an employee's salaries?

Is salary deduction considered a form of labor disciplinary measure in Vietnam?

Pursuant to Article 124 of the 2019 Labor Code on disciplinary measures:

Disciplinary measures

1. Reprimand.

2. Deferment of pay rise for up to 6 months.

3. Demotion.

4. Dismissal.

Thus, there are 04 disciplinary measures against employees: reprimand, deferment of pay rise for up to 6 months, demotion, and dismissal.

Thus, salary deduction is not considered a form of labor disciplinary measure.

Vietnam: Shall an employer have the right to deduct from an employee’s salary for disturbance at work? (Image from the Internet)

Vietnam: Shall an employer have the right to deduct from an employee’s salary for disturbance at work?

Pursuant to the provisions of Article 102 of the 2019 Labor Code on salary deductions:

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.

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 the 2019 Labor Code.

Thus, an employer may not deduct from an employee’s salary for disturbance at work.

However, an employer may deduct from an employee’s salary for disturbance at work if there is damage to the employer’s equipment and assets.

Note:

- The employee has the right to be aware of the reasons for the deduction.

- 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.

Vietnam: Shall an employer deducting from employees’ salaries in breach of law pay interests on deducted amount from an employee's salaries?

Pursuant to the provisions of Article 17 of Decree 12/2022/ND-CP on violations against regulations on salaries:

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.

...

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.

...

The following fines shall be imposed upon an employer for deducting from employees’ salaries in breach of law:

- 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.

Note: The fines for administrative violations prescribed above shall be imposed upon violating individuals. The fine imposed upon an organization is twice as much as that imposed upon an individual for committing the same administrative violation (Clause 1 Article 6 of Decree 12/2022/ND-CP)

In addition, The employer 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.