Vietnam: Employees enjoy many benefits when receive salary in January 2021

The Labor Code 2019 of Vietnam officially takes effect from January 01, 2021, that is, this January will be the first month that employees enjoy many benefits when receiving wages in the spirit of this Code. Specifically as follows:

1. Employee may authorize a person to receive his/her salary

Pursuant to Clause 1 Article 94 of the Labor Code 2019 of Vietnam, “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”.

Previously, Article 96 of the Labor Code 2012 of Vietnam only stipulated that “an employee must be paid with a full wage in a direct and timely manner”.

Thus, authorizing others to receive wages is a new provision clearly mentioned in the Labor Code 2019 of Vietnam. However, this authorization must be lawful, agreed by the employer because the Law only stipulates that it is "possible" to pay wages to the authorized employee, but not mandatory. Therefore, from this January, the husband's salary can be transferred directly to the account of his wife (or mistress), because the law does not limit the authorized subjects.

2. Regulations on salary payment principles in favor of employees

The Labor Code 2019 of Vietnam additionally stipulates that employers are not allowed to:

- Restrict or interfere with their employees’ spending of their salaries; 

- Force their employees to spend their salaries on goods or services of the employers or any particular providers decided by the employers.

(Clause 2 Article 94 of the Labor Code 2019 of Vietnam)

3. Employer must provide the employee with a note specifying the salary

Pursuant to Clause 3 Article 95 of the Labor Code 2019 of Vietnam, “every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay, night shift pay and deductions (if any)”.

Compared to the Labor Code 2012 of Vietnam, this is a completely new regulation, enabling employees to monitor and check all wages, overtime pay, night shift pay and deductions in order to ensure best their own legitimate rights and interests.

4. In case a salary is paid at least 15 days behind schedule, the employer shall pay the employee a compensation

This is one of the benefits of employees when their salary is delayed, specifically as specified in Clause 4 Article 97 of the Labor Code 2019 of Vietnam as follows:

Article 97. Salary payment time

4. 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.

The fact that an employer must compensate an employee for a late payment of wages is not a new regulation. However, the Labor Code 2019 of Vietnam mentions that “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”.

Compared to previous regulations, according to Article 96 of the Labor Code 2012 of Vietnam and Point b Clause 2 Article 24 of the Decree No. 05/2015/NĐ-CP:

If the late payment is made for 15 days or more, an extra amount shall be at least equal to the arrears of salary multiplied by the ceiling of interest rate for 1-month deposits announced by the State bank of Vietnam at the time when the payment is made. If the State Bank of Vietnam does not specify the ceiling interest rate, 1-month deposit interest rate of commercial banks, where businesses and agencies open trading accounts at the time of payment, shall be applied.

5. Employees do not have to pay an account opening fee if wages paid through a bank

Pursuant to Clause 2 Article 96 of the Labor Code 2019 of Vietnam:

Article 96. Salary payment forms

2. 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.

3. The Government shall elaborate this Article.

Previously, according to Clause 2 Article 94 of the Labor Code 2012 of Vietnam, “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”.

Thus, from the above examples, it can be concluded that from January 1, 2021, the employer is responsible for paying the fees related to the account opening and salary transfer when paying salary through the employee's personal bank account.

The above are some benefits for employees when the Labor Code 2019 of Vietnam takes effect, but especially this good news will officially apply to the first salary month in 2021.

Thu Ba

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