Is an enterprise in Vietnam allowed to deduct an employee's salary?

Is an enterprise in Vietnam allowed to deduct an employee's salary?​ (Illustrative photo)

Regarding this issue, LANWET would like to offer the following explanation:

Is an enterprise in Vietnam allowed to deduct an employee's salary?​

According to Clause 2, Article 128 of the Labor Code 2012, it is prohibited to discipline employees by fining them or cutting their salary.

Furthermore, Article 101 of the Labor Code 2012 stipulates the deductions from employees' salary as follows:

- Employers are only allowed to deduct employees' salary to compensate for damage caused by the employee to tools, equipment, or other damages to the employer's property. If the employee causes non-serious damage due to negligence with a value not exceeding 10 months of the regional minimum salary, the maximum compensation is 3 months' salary, and it will be deducted monthly from their salary;

- Employees have the right to be informed of the reasons for salary deductions;

- Monthly salary deductions must not exceed 30% of the employee's monthly salary after mandatory social insurance, health insurance, unemployment insurance, and income tax deductions.

Thus, according to the above regulation, enterprises are not allowed to fine or deduct employees' salary as a form of disciplinary action in case of violation of labor rules or working regulations. There is only one scenario in which an enterprise is permitted to deduct an employee's salary, which is when the employee causes damage to tools, equipment, or other assets of the enterprise.

This regulation aims to protect the lawful rights and interests of employees and prevent enterprises from abusing monetary fines or salary deductions as disciplinary measures. Consequently, if an enterprise violates this regulation, it will be considered a legal violation and subject to administrative penalties.

Enterprises in Vietnam may be fined up to 15 million for unilateral salary deduction

According to Clause 3, Article 18 of Decree 28/2020/ND-CP, a fine of 10,000,000 VND to 15,000,000 VND will be imposed on employers for any of the following violations of labor discipline:

- Violating the body or dignity of the employee during the disciplinary process, where criminal charges are not applicable;

- Using monetary fines or salary cuts in lieu of disciplinary measures;

- Disciplining employees for actions not stipulated in the labor rules;

- Applying multiple disciplinary measures for a single violation of labor discipline.

Therefore, according to the above regulations, if an enterprise unilaterally deducts an employee's salary instead of applying disciplinary measures, it will be subject to administrative penalties ranging from 10 to 15 million VND. Therefore, cases such as fining or deducting an employee's salary for late arrivals, early departures, failure to meet work efficiency, unauthorized leave without the employer's consent, etc., are all considered violations according to legal regulations.

Ty Na

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