What are the legal consequences for not paying or underpaying severance allowances to employees as prescribed by law?

According to the provisions of Clause 1, Article 11 of Decree 28/2020/ND-CP (Effective from April 15, 2020), if the employer does not pay or pays insufficient severance allowance or job loss allowance to employees in accordance with the law, the employer will be penalized as follows:

a) From 1,000,000 VND to 2,000,000 VND for violations involving 01 to 10 employees;

b) From 2,000,000 VND to 5,000,000 VND for violations involving 11 to 50 employees;

c) From 5,000,000 VND to 10,000,000 VND for violations involving 51 to 100 employees;

d) From 10,000,000 VND to 15,000,000 VND for violations involving 101 to 300 employees;

e) From 15,000,000 VND to 20,000,000 VND for violations involving 301 or more employees.

In addition, Clause 3 of this Article stipulates the measures to remedy consequences as follows:

a) Mandatory payment of the full severance allowance or job loss allowance to the employee along with the interest on the unpaid amount calculated according to the highest demand deposit interest rate of state-owned commercial banks announced at the time of penalty for the act of not paying or paying insufficient severance allowance or job loss allowance to the employee as mentioned in Clause 1 of this Article;

b) Mandatory completion of the confirmation procedures and return of other documents held to the employee for the act of not completing confirmation procedures, and returning other documents held from the employee after the termination of the labor contract as mentioned in Clause 1 of this Article.

For more information on the above issue, you can refer to Decree 28/2020/ND-CP.

Sincerely!