Regulations on salary payment forms in Vietnam

Regulations on salary payment forms in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Salary payment rules in Vietnam

The salary payment rules specified in Article 91 of the Labor Code 2019 are as follows:

- Employers shall directly, fully and punctually pay salaries to their employees.

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.

- Employers must not restrict or interfere their employees’ spending of their salaries; must not force their employees to spend their salaries on goods or services of the employers or any particular providers decided by the employers.

2. Regulations on salary payment forms in Vietnam

Specifically, in Article 54 of Decree 145/2020/ND-CP, the forms of salary payment prescribed in Article 96 of the Labor Code 2019 are elaborated as follows:

(1) The form of salary payment shall be specified in the employment contract on the basis of consensus between the employer and the employee. To be specific:

- Time-based salary shall be paid to the employee monthly, weekly, daily or hourly as agreed in the employment contract. To be specific:

+ Monthly salary is the salary for a month’s work;

+ Weekly salary is the salary for a week’s work. In case monthly salary is specified in the employment contract, the weekly salary equals (+) the monthly salary multiplied by (x) 12 months and divided by (:) 52 weeks;

+ Daily salary is the salary for a days’ work. In case monthly salary is specified in the employment contract, the daily salary equals (+) the monthly salary divided by (:) the number of normal working days in a month as decided by the employer. In case weekly salary is specified in the employment contract, the daily salary equals (+) the weekly salary divided by (:) the number of working days in a week as specified in the employment contract;

+ Hourly salary is the salary for an hour’s work. In case monthly, weekly or daily salary is specified in the employment contract, the hourly salary equals (+) the daily salary divided by (:) the number of normal working hours in a day as prescribed by Article 105 of the Labor Code 2019.

- Piece rate pay is paid to piece workers according to the quantity and quality of products, productivity norms and unit prices of the products.

- Fixed salary is paid according to the quantity and quality of works and time needed for completion of these works.

(2) Payment of salaries in the forms specified in (1) shall be made transferred to the employees’ bank accounts. In the latter case, the employers shall pay the fees for opening accounts and transferring salaries.

3. Salary payment time in Vietnam

According to Article 97 of the Labor Code 2019, the salary payment time is determined as follows:

- An employer who receives an hourly, daily or weekly salary shall be paid after every working hour, day or week respectively, or shall receive a sum within not more than 15 days as agreed by both parties.

- An employee who receives a monthly or bi-weekly salary shall be paid after every month or every two weeks respectively. The payment time shall be periodic and agreed upon by both parties.

- An employee who receives a piece rate or a fixed amount shall be paid as agreed by both parties. In case a task cannot be completed within one month, the employee shall receive a monthly advance payment based on the amount of work done in the month.

- In case of a force majeure event in which the employer is unable to pay the employee on schedule after all remedial measures have been implemented, the salary shall be paid within 30 days.

In case a salary is paid at least 15 days behind schedule, the employer shall pay the employee a compensation that is worth at least the interest on the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s salary account is opened.

Thanh Rin

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