What are salaries? What is the salary payment time in Vietnam?

What are salaries? What are time salaries in Vietnam?

- A salary is an amount the employer pays the employee under an agreement for a work performed by the latter. Salary equals (=) base salary plus (+) allowances and other additional amounts.

- The base salary must not fall below the statutory minimum wages.

- Employers shall pay salaries fairly without discrimination against genders of employees who perform equal works.

According to this regulation, salary is understood as the amount of money the employer is obliged to pay to the employee when they provide labor, according to the provisions of law or according to the legal agreement of the parties in the labor contract. Salaries will be paid according to labor productivity, quality, and work efficiency but must not be lower than the statutory minimum wages.

Labor Code does not have a definition of time salaries. However, this term can be understood as follows:

Time salaries is the salary paid to employees based on the agreed salary or salary according to rank, salary grade and actual working time of the employee. Time salaries include monthly salaries, weekly salaries, daily salaries and hourly salaries.

Salary payment rules in Vietnam

- 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.

- 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.

What are salaries? What is the salary payment time in Vietnam? (Image from the Internet)

Salary payment forms in Vietnam

The forms of salary payment prescribed in Article 96 of the Labor Code are elaborated as follows:

- The form of salary payment shall be specified in the employment contract on the basis of consensus between the employer and the employee. To be specific:

+ Time-based salary shall be paid to the employee monthly, weekly, daily or hourly as agreed in the employment contract. To be specific:

++ Monthly salary is the salary for a month’s work;

++ Weekly salary is the salary for a week’s work. In case monthly salary is specified in the employment contract, the weekly salary equals (=) the monthly salary multiplied by (x) 12 months and divided by (:) 52 weeks;

++ Daily salary is the salary for a days’ work. In case monthly salary is specified in the employment contract, the daily salary equals (=) the monthly salary divided by (:) the number of normal working days in a month as decided by the employer. In case weekly salary is specified in the employment contract, the daily salary equals (=) the weekly salary divided by (:) the number of working days in a week as specified in the employment contract;

++ Hourly salary is the salary for an hour’s work. In case monthly, weekly or daily salary is specified in the employment contract, the hourly salary equals (=) the daily salary divided by (:) the number of normal working hours in a day as prescribed by Article 105 of the Labor Code.

+ Piece rate pay is paid to piece workers according to the quantity and quality of products, productivity norms and unit prices of the products.

+ Fixed salary is paid according to the quantity and quality of works and time needed for completion of these works.

- Payment of salaries in the forms specified in Clause 1 of this Article shall be made transferred to the employees’ bank accounts. In the latter case, the employers shall pay the fees for opening accounts and transferring salaries.

Salary payment time in Vietnam

- 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.

- 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.

- 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.

- 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.

Legal grounds:

- Article 91, Article 94, Article 96, Article 97 of the 2019 Labor Code;

- Article 54 of Decree 145/2020/ND-CP.

Best regards!