Does the company get penalized for not paying the 13th-month salary to employees according to the agreement?
Is the Company subject to penalties for not paying the 13th-month salary to employees as agreed?
Based on Article 90 of the 2019 Labor Code, wages are defined as follows:
Wages are the amount that the employer pays to the employee as agreed upon to perform the job, including the job-based or title-based salary, salary allowances, and other additional payments.
The job-based or title-based salary shall not be lower than the minimum wage.
The employer must ensure equal pay without gender discrimination for employees performing jobs of equal value.
Based on Article 104 of the Labor Code on bonuses as follows:
A bonus is an amount or assets or other forms given by the employer to the employee based on the production and business results and the level of job completion of the employee.
The bonus policy is determined and publicly announced at the workplace by the employer after consulting the representative organization of employees at the grassroots level for places with such a representative organization.
The law does not have any specific provisions requiring the employer to mandatorily pay the 13th-month salary to employees, so whether it is mandatory to pay the 13th-month salary or not should be considered based on the contract signed between the employee and the employer. In your case, if the employment contract states that the company commits to pay the 13th-month salary, the company must comply with the committed content and is obliged to pay this amount to you.
Principles of Wage Payment to Employees
Based on Article 94 of the 2019 Labor Code, the principles of wage payment to employees are:
The employer must pay wages directly, fully, and on time to the employee. In case the employee cannot directly receive the wages, the employer may pay the wages to the person legally authorized by the employee.
The employer is not allowed to restrict or interfere with the employee's right to decide on the expenditure of their wages; is not allowed to compel the employee to spend wages on purchasing goods or using services of the employer or other units designated by the employer.
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