Vietnam: 08 things you should know about salary under the Labor Code

Vietnam: 08 things you should know about salary under the Labor Code (Internet image)

1. What is salary?

Article 90 of the Labor Code 2019 stipulates salary as follows:

- A salary is an amount the employer pays the employee under an agreement for a work performed by the latter. Salary equals (+) base salary plus (+) allowances and other additional amounts.

- The base salary must not fall below the statutory minimum wages.

- Employers shall pay salaries fairly without discrimination against genders of employees who perform equal works.

2. What is statutory minimum wages?

In Article 91 of the Labor Code 2019 stipulates statutory minimum wages is as follows:

- 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, productivity and financial capacity of enterprises.

3. Salary payment rules in Vietnam

Article 94 of the Labor Code 2019 stipulates the salary payment rules 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.

4. Regulations on salary payment in Vietnam

Article 95 of the Labor Code 2019 provides for salary payment as follows:

- The employer shall pay the employee on the basis of the agreed salary, productivity and work quality.

- The salary written in the employment contract and the salary paid in reality shall be VND, unless the employee is a foreigner working in Vietnam.

- Every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay, nightshift pay and deductions (if any).

5. Salary payment forms in Vietnam

According to Article 96 of the Labor Code 2019, the salary payment forms is as follows:

- The employer and employee shall reach an agreement on whether the salary is time-based, product-based (piece rate) or a fixed amount.

- Salary shall be paid in cash or transferred to the employee’s personal bank account.

In case of bank transfer, the employer shall pay the costs of account opening and transfer.

6. Salary payment time in Vietnam

The salary payment time specified in Article 97 of the Labor Code 2019 is 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.

7. Overtime pay, night work pay in Vietnam

Pursuant to Article 98 of the Labor Code 2019, the salary for overtime and night work is as follows:

-  An employee who works overtime will be paid an amount based on the piece rate or actual salary as follows:

+ On normal days: at least 150%;

+ On weekly days off: at least 200%;

+ During public holidays, paid leave, at least 300%, not including the daily salary during the public holidays or paid leave for employees receiving daily salaries.

- An employee who works at night will be paid an additional amount of at least 30% of the normal salary.

- An employee who works overtime at night will be paid, in addition to the salary specified in Clause 1 and Clause 2 of Article 98 of the Labor Code 2019, an amount of at least 20% of the day work salary of a normal day, weekend or public holiday.

8. Suspension pay in Vietnam

Pursuant to Article 99 of the Labor Code 2019, in case of a suspension of work, the employee shall receive a suspension pay as follows:

- If the suspension is at the employer’s fault, the employee shall be paid the full salary under the employment contract;

- If the suspension is at the employee’s fault, the employee shall not receive the salary. If this leads to suspension of work of other employees in the same unit, they shall be paid an amount not smaller than the statutory minimum wages;

- 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.

Ngoc Nhi

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