Salary is always a matter of special concern to employees because it is closely related to the interests of employees. When the Labor Code 2019 of Vietnam takes effect, from 2021, there will be several new regulations on salaries and bonuses for employees.
Article table of contents
1. Statutory minimum wages per month or per hour vary according to regions
According to Clause 1 Article 91 of the Labor Code 2019 of Vietnam:
Statutory minimum wages are minimum wages of workers who do the simplest jobs in normal working conditions that are sufficient to support themselves and their families, and appropriate for socio-economic development.
Statutory minimum wages per month or per hour vary according to regions.
Statutory minimum wages shall be adjusted according to:
- Minimum living standards of workers and their families;
- the relation between statutory minimum wages and usual salaries;
- Consumer price index, economy growth rate;
- Labor supply and demand;
- Employment and unemployment;
- Productivity;
- Financial capacity of enterprises.
It can be seen that the Labor Code 2019 of Vietnam has stipulated that statutory minimum wages per month or per hour vary according to regions. Concurrently, there are 07 factors to formulate and adjust the statutory minimum wages.
2. Provision on “sectoral minimum wage” is abolished
Currently, according to Clause 23 Article 91 of the Labor Code 2012 of Vietnam, the sectoral minimum wage must be determined through collective bargaining within the sector and recorded in the sectoral-level collective labor agreement but must not be lower than the regional minimum wage announced by the Government. However, the Labor Code 2019 of Vietnam has abolished this provision. Thus, from 2021, there will no longer be the definition of “sectoral minimum wage” according to the Labor Code.
3. Supplementing members of the National Salary Council
According to Clause 2 Article 92 of the Labor Code 2019 of Vietnam, the Prime Minister shall establish the National Salary Council, whose members are representatives of the Ministry of Labor, War Invalids and Social Affairs, Vietnam General Confederation of Labor, some central employer representative organizations and independent experts. According to this provision, from 2021, from 2021, independent experts will be supplemented to the National Salary Council.
4. Enterprises have the right to decide their own salary policy
According to Clause 1 Article 93 of the Labor Code 2012 of Vietnam, based on the principles of formulation of wage scales, wage tables and labor norms stipulated by the Government, an employer shall formulate the wage scale, wage table and labor norms for use as the basis to employ and use labor, to negotiate wage levels in labor contracts, and to pay wages to employees.
However, the Labor Code 2019 of Vietnam only stipulates that every employer shall establish their wage scale, payroll and labor productivity norms as the basis for recruitment and use of labor, negotiation and payment of salaries.
Thus, the Labor Code 2019 of Vietnam has abolished the provision “based on the principles of formulation of wage scales, wage tables and labor norms stipulated by the Government”, instead, enterprises have the right to decide their own salary policy. However, enterprises shall consult with the representative organization of employees (if any) during establishment of the pay scale, payroll and labor productivity norms. Concurrently, the pay scale, payroll and labor productivity norms shall be publicly posted at the workplace before they are implemented.
5. Employees are entitled to authorize another person to receive salary
In addition to the rule that employers shall directly, fully and punctually pay salaries to their employees, the Labor Code 2019 of Vietnam has supplemented that 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.
However, employees should note that authorization is only possible in case he/she is not able to receive the salary directly and whether or not to accept the employee's authorization will be decided by the enterprise.
6. In case of bank transfer, the employer shall pay the costs of account opening and transfer
According to the Labor Code 2012, in case the wage is paid into the bank account, the employer shall negotiate with the employee on any fees related to the opening and maintenance of the account. However, according to Clause 2 Article 96 of the Labor Code 2019 of Vietnam, in case of bank transfer, the employer shall pay the costs of account opening and transfer.
7. Amending provisions on suspension pay for employees
Specifically, in case the suspension is caused by an electricity or water supply issue that is not at the employer’s fault, or by a natural disaster, fire, major epidemic, hostility, relocation requested by a competent authority, or for economic reasons, both parties shall negotiate the salary as follows:
- If the suspension does not exceed 14 working days, the salary shall not fall below the statutory minimum wages;
- If the suspension is longer than 14 working days, the salary shall be negotiated by both parties and the salary for the first 14 days must not fall below the statutory minimum wages.
Thus, the Labor Code 2019 of Vietnam has supplemented the provision that if the suspension does not exceed 14 working days, the salary shall not fall below the statutory minimum wages. From the 15th day (if any), the salary shall be negotiated by both parties.
8. An employee may receive an interest-free salary advance
According to the Labor Code 2019 of Vietnam, an employee may receive an interest-free salary advance in accordance with conditions agreed on by the two parties.
The employer must make the advance payment to the employee for the number of days the employee temporarily leaves his/her work in order to perform duties of citizens for a period of 01 week or longer, but the advance shall not exceed 01 month’s salary. The employee must reimburse the advance.
An employee who is conscripted in accordance with the Law on Conscription may not receive salary advance.
When taking annual leave, an employee shall receive an advance payment of at least salary for the entitled days of leave.
9. Bonuses shall be given in money, property or spirit
The Labor Code 2019 of Vietnam has amended “bonus in money” to “bonus”. Accordingly, a bonus means an amount of money, a piece of property or item that is provided by an employer for his/her employees on the basis of the business performance or the employees’ performance. Thus, from 2021, employees can be given bonuses in many different forms, not only in cash as at present.
Thuy Tram
- Key word:
- Labor Code 2019
