Vietnam: Employees shall be paid additional interest if the company is late in paying wages

Employers have the right to use the labor of the employee and must have the obligation to pay wages directly, fully and on time to the employee as agreed in the contract and in accordance with the law. These are the principles of wage payment defined in Article 96 of the Labor Code 2012 of Vietnam and Article 24 of Decree No. 05/2015/NĐ-CP of Vietnam’s Government.

Employers are only allowed to delay payment of wages in special cases due to natural disaster, conflagration or other force majeure events take place, and employers have sought all remedial measures but can not make payment on time as agreed in the employment contract, the payment shall be made within 01 month.

According to Clause 2 Article 24 of Decree No. 05/2015/NĐ-CP of Vietnam’s Government, employers must pay additional interest to employees in case salary payment is delayed for more than 15 days, specifically as follows:

Moreover, to improve the ability to enforce the law, in addition to paying interest on late wage payments of employees, Clause 10 Article 1 of Decree No. 88/2015/NĐ-CP of Vietnam’s Government stipulates that employers may also be subject to administrative penalties for not paying salaries on time with a maximum amount of up to VND 50,000,000, depending on the number of employees who are late in paying.

Specific fines:

- From VND 5,000,000 to VND 10,000,000 if the violation involves 01 – 10 workers;

- From VND 10,000,000 to VND 20,000,000 if the violation involves 11 – 50 workers;

- From VND 20,000,000 to VND 30,000,000 if the violation involves 51 – 100 workers;

- From VND 30,000,000 to VND 40,000,000 if the violation involves 101 – 300 workers;

- From VND 40,000,000 to VND 50,000,000 if the violation involves more than 300 workers.

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