Annual leave is a legal provision for employees to regenerate their labor capacity. If the employee does not use all the allocated leave days, the law requires the employer to pay for the unused leave days. Failure to pay will result in a monetary fine.
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Enterprises will be fined if they don't pay for unused leave days for employees (Illustrative image)
How many leave days are employees entitled to each year?
According to Article 111 of the Labor Code 2012, the annual leave days for employees are stipulated as follows:
For employees who have worked for a full 12 months for an employer, they are entitled to annual leave with full salary according to the labor contract as follows:
- 12 working days for those doing normal working conditions;- 14 working days for those doing heavy, toxic, dangerous work or working in harsh living conditions areas as listed by the Ministry of Labor, War Invalids and Social Affairs in cooperation with the Ministry of Health, or underage laborers or disabled laborers;- 16 working days for those doing particularly heavy, toxic, dangerous work or working in areas with particularly harsh living conditions as listed by the Ministry of Labor, War Invalids and Social Affairs in cooperation with the Ministry of Health.
At the same time, Article 112 of the Labor Code 2012 also stipulates that every 5 years working for an employer, the annual leave days of employees will be increased by 1 day.
Notably, Clause 1, Article 114 of the Labor Code 2012 stipulates that employees who quit their job, are dismissed or for other reasons haven't taken their annual leave or haven't taken the full number of annual leave days will be compensated in cash for the unused days.
Enterprises will be fined if they don't pay for unused leave days
According to Clause 2, Article 16 of Decree 28/2020/ND-CP of the Government of Vietnam, which regulates the penalties for administrative violations in the field of labor, social insurance, and sending Vietnamese employees to work abroad under contracts, effective from April 15, 2020, employers will be fined for failing to pay for unused annual leave days to employees as follows:
- From 5,000,000 VND to 10,000,000 VND for violations involving 1 to 10 employees;- From 10,000,000 VND to 20,000,000 VND for violations involving 11 to 50 employees;- From 20,000,000 VND to 30,000,000 VND for violations involving 51 to 100 employees;- From 30,000,000 VND to 40,000,000 VND for violations involving 101 to 300 employees;- From 40,000,000 VND to 50,000,000 VND for violations involving more than 301 employees.
Moreover, Clause 5, Article 16 of Decree 28/2020/ND-CP also mandates that employers must pay the full salary plus interest on the late payment or insufficient payment to employees, calculated according to the highest interest rate on demand deposits announced by state-owned commercial banks at the time of the penalty, to remedy the violation.
From the above analysis, it is evident that if employees do not take all their annual leave, the employer must pay them their full salary for the unused leave days. If the employer does not comply, they will not only have to apply the interest rate to the due salary but will also be fined according to the law.
Le Vy
