Salary is always a top concern for employees. So, from January 01, 2021, the Labor Code 2019 will officially be applied; what are regulations on salary in Vietnam?
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From January 01, 2021, how will employees in Vietnam be entitled to salaries and annual leave? (Illustrative image)
According to the provisions of Article 90 of the Labor Code 2019 (which comes into force in Vietnam from January 01, 2021), salary is the amount of money that the employer pays to the employee under the agreement to perform the work, including the salary according to the job or title, salary allowances, and other additional amounts. Simultaneously, the salary according to the job or title must not be lower than the minimum wage in Vietnam.
Therefore, employees need to know the 06 regulations on salary entitlement effective from January 01, 2021, as follows:
1. Principles of salary payment to employees in Vietnam
Based on Article 94 of the Labor Code 2019, employers must pay salaries to employees based on the following principles:
- Salaries must be paid directly, fully, and promptly to employees. If the employee cannot receive the salary directly, the employer can pay the salary to the person legally authorized by the employee;- The employer must not limit or interfere with the employee's right to independently decide on the use of their salary;- The employer must not force employees to use their salary to buy goods or use services from the employer or other units designated by the employer.
2. Forms of salary payment and salary periods for employees in Vietnam
According to the provisions of Article 96 of the Labor Code 2019, the forms of salary payment and salary periods for employees are as follows:
- Agreement based on time, product, or contract;- Salaries are paid in cash or through the employee's personal bank account. (Note: In case of salary payment through the employee’s personal bank account, the employer must bear the related fees for opening the account and transferring the salary).
Additionally, according to Article 97 of the Labor Code 2019, the salary period for employees is specified as follows:
- Employees who are paid by the hour, day, or week shall be paid after the hour, day, or week of work or be paid in lumpsums as agreed by both parties, but no later than every 15 days;- Monthly-paid employees shall be paid once a month or half-monthly. Employees paid by product or contract shall be paid as agreed by both parties (Note: if the work is to be completed over several months, a monthly salary advance shall be provided based on the completed work volume in the month);- In case of force majeure, the employer must not delay salary payment to employees by more than 30 days. Additionally, if the salary is delayed for 15 days or more, the employer must compensate employees with an amount at least equivalent to the interest of the delayed amount calculated at the bank's one-month term deposit interest rate.
3. Salary payment for overtime work in Vietnam
According to Article 98 of the Labor Code 2019, employers must pay employees based on the unit price or actual salary for regular work when utilizing overtime work as follows:
- Overtime on weekdays: at least 150%;- Overtime on weekly rest days: at least 200%;- Overtime on public holidays, New Year holidays, and paid leave days: at least 300%, not counting the salary for those holidays for employees paid by day.- Employees who work at night shall be paid an additional amount of at least 30% of the salary calculated according to the unit price or actual salary for regular workdays.
In addition to the above salary, employees working overtime at night shall also receive an extra 20% of the salary calculated based on the unit price or actual salary for daytime work on regular days, weekly rest days, or public holidays.
4. Salary for suspension from work
According to Article 99 of the Labor Code 2019, in case employees have to stop working, they are entitled to the following salaries:
- If it is the employer's fault, employees are paid their full salary according to the labor contract;- If it is the employee's fault, that person will not be paid.
Additionally, in case of stoppage due to power, water incidents not caused by the employer, or due to natural disasters, fires, dangerous epidemics, enemy sabotage, relocation, or economic reasons, the stoppage salary is as follows:
- If the stoppage is within 14 working days or less, the stoppage salary shall be negotiated but not lower than the minimum wage;- If the stoppage exceeds 14 working days, the stoppage salary is negotiable but must ensure that the first 14 days' salary is not lower than the minimum wage.
5. Salary advance and salary deduction
According to Article 101 of the Labor Code 2019, employees are entitled to a salary advance under mutually agreed-upon conditions and without interest. Simultaneously, employees taking annual leave shall receive an advance of at least their salary for the leave days. However, employees must note that those drafted for military service according to the Military Service Law are not entitled to a salary advance.
Moreover, according to Article 102 of the Labor Code 2019, employers are only allowed to deduct employees' salaries to offset damage caused by the employee to the employer's tools, equipment, or assets, but employees have the right to know the reasons for the salary deduction.
Note: Monthly salary deductions must not exceed 30% of the actual monthly salary of the employee after mandatory deductions for social insurance, health insurance, unemployment insurance, and personal income tax.
6. Cases where employees are absent but still receive full salary
According to the provisions of the Labor Code 2019, employees are entitled to full salary even when absent in the following cases:
- Employees are absent with full pay on public holidays;- Employees who have worked for a full 12 months are entitled to annual leave with full pay;- Employees are entitled to paid personal leave;- Female employees during menstruation are allowed 30 minutes of rest per day, and during the period of nursing a child under 12 months of age, they are allowed 60 minutes of rest per day during working hours and still receive full pay according to the labor contract;- Employees are entitled to full pay during work stoppage due to the employer's fault as per the labor contract;- Employers temporarily suspend employees when their violations have complicated details and if keeping the employee at work would hinder the clarification process, and the employee is not subject to labor disciplinary actions, they shall receive full pay.
For detailed information, see here: From 2021, in which cases employees are allowed to be absent from work but still receive full salary?
The above includes all regulations on salary entitlement for employees that will be effective from January 01, 2021. Therefore, employees in Vietnam need to be aware to ensure their legitimate rights.
Ty Na
