What are the penalties for late payment of salaries and Tet bonuses to employees of enterprises in Vietnam?
Vietnam: When will employers be allowed to pay salaries behind schedule?
Pursuant to Article 94 of the Labor Code 2019 stipulates as follows:
Salary payment rules
1. Employers shall directly, fully and punctually pay salaries to their employees. In the cases where an employee is not able to directly receive his/her salary, the employer may pay it through a person legally authorized by the employee.
2. Employers must not restrict or interfere their employees’ spending of their salaries; must not force their employees to spend their salaries on goods or services of the employers or any particular providers decided by the employers.
According to the above regulations, enterprises must pay wages in full and on time to employees.
However, Article 97 of the Labor Code 2019 provides as follows:
Salary payment time
1. An employer who receives an hourly, daily or weekly salary shall be paid after every working hour, day or week respectively, or shall receive a sum within not more than 15 days as agreed by both parties.
2. An employee who receives a monthly or bi-weekly salary shall be paid after every month or every two weeks respectively. The payment time shall be periodic and agreed upon by both parties.
3. An employee who receives a piece rate or a fixed amount shall be paid as agreed by both parties. In case a task cannot be completed within one month, the employee shall receive a monthly advance payment based on the amount of work done in the month.
4. In case of a force majeure event in which the employer is unable to pay the employee on schedule after all remedial measures have been implemented, the salary shall be paid within 30 days. In case a salary is paid at least 15 days behind schedule, the employer shall pay the employee a compensation that is worth at least the interest on the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s salary account is opened.
Thus, according to the above regulations, enterprises must pay wages in full and on time to employees.
However, in case of a force majeure event in which the employer is unable to pay the employee on schedule after all remedial measures have been implemented, the salary shall be paid within 30 days.
In case a salary is paid at least 15 days behind schedule, the employer shall pay the employee compensation that is worth at least the interest on the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s salary account is opened.
What are the penalties for late payments of salaries and Tet bonuses to employees of enterprises in Vietnam? (Image from the Internet)
What are the penalties for late payment of salaries and Tet bonuses to employees of enterprises in Vietnam?
Pursuant to Clause 2, Article 17 of Decree 12/2022/ND-CP stipulates as follows:
Violations against regulations on salaries
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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.
3. The following fines shall be imposed upon an employer for paying their employees salaries which are lower than the statutory minimum wages announced by the Government:
a) A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 01 - 10 employees;
b) A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed if the violation involves 11 - 50 employees;
c) A fine ranging from VND 50.000.000 to VND 75.000.000 shall be imposed if the violation involves 51 employees or more.
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Thus, according to the above regulations, depending on the number of employees who are late in paying wages, the employer can be fined up to 75,000,000 VND. This is the fine level for an individual employer, this fine is double for an organization employer (based on Clause 1, Article 6 of Decree 12/2022/ND-CP).
In addition, the employer must pay the full salary plus the interest on the late payment or underpayment to the employee.
The law does not provide for penalties for late payment of Tet bonuses to employees. Therefore, there are no sanctions to penalize violating enterprises.
What are the regulations on salary payment in Vietnam?
Pursuant to Article 95 of the Labor Code 2019, the salary paid to employees is as follows:
- The employer shall pay the employee on the basis of the agreed salary, productivity and work quality.
- The salary written in the employment contract and the salary paid in reality shall be VND, unless the employee is a foreigner working in Vietnam.
- Every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay, nightshift pay and deductions (if any).
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