Do employees have to deduct salaries to pay cost of transfer to their bank accounts in Vietnam?

Do employees have to deduct salaries to pay cost of transfer to their bank accounts in Vietnam?

In Article 96 of the 2019 Labor Code, the form of salary payment is as follows:

1. The employer and employee shall reach an agreement on whether the salary is time-based, product-based (piece rate) or a fixed amount.

2. Salary shall be paid in cash or transferred to the employee’s personal bank account.

In case of bank transfer, the employer shall pay the costs of account opening and transfer.

3. The Government shall elaborate this Article.

As such, according to the regulations in Vietnam, the employer must pay the costs of account opening and transfer. Therefore, it is illegal for the company to deduct your salary to pay the cost of transfer through a bank account.

How much is penalty for employers to deduct employees’ salaries for bank account transfer cost in Vietnam?

In Clause 2, Article 17 of Decree 12/2022/ND-CP, violations against regulations on salaries are as follows:

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.

Besides, at Point a, Clause 5, Article 17 of Decree 12/2022/ND-CP stipulates as follows:

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.

In addition, in Clause 1, Article 6 of Decree 12/2022/ND-CP stipulates as follows:

1. The fines for administrative violations prescribed in Chapter II, Chapter III and Chapter IV of this Decree shall be imposed upon violating individuals, except the fines in Clauses 1, 2, 3, 5 Article 7, Clauses 3, 4, 6 Article 13, Clause 2 Article 25, Clause 1 Article 26, Clauses 1, 5, 6, 7 Article 27, Clause 8 Article 39, Clause 5 Article 41, Clauses 1 through 12 Article 42, Clauses 1 through 8 Article 43, Clauses 1 through 6 Article 45, Clause 3 Article 46 of this Decree. The fine imposed upon an organization is twice as much as that imposed upon an individual for committing the same administrative violation.

According to this Article, depending on the number of employees at the company you are working for, in case the company deducts the salary from the salary transfer cost via a bank account in Vietnam, a fine of between VND 10,000,000 and 100,000,000 will be imposed. 

In addition, the company is required to pay the full salary plus the interest of the amount deducted for you calculated according to the highest demand deposit interest rate announced by state-owned commercial banks at the time of payment in Vietnam. 

What are regulations on employees’ salary payment rules in Vietnam?

In Article 94 of the Labor Code 2019 stipulates salary payment rules as follows:

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.

The above is the employees’ salary payment rules in Vietnam as prescribed by law.

Best Regards!