Vietnam: From 2021, employees may have their suspension wages reduced due to the epidemic

According to Article 99 of the Labor Code 2019 of Vietnam, 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.

Currently, according to Article 98 of the Labor Code 2012 of Vietnam, in case an employee has to suspend working, he/she shall be paid as follows:

- If due to the fault of the employer, the employee is entitled to payment of the full wage;

- If due to his/her fault, he/she is not entitled to payment of wage; other employees in the same unit who also have to suspend the work are entitled to the wages as agreed upon by the two parties, provided that those wages are not lower than the regional minimum wage stipulated by the Government;

- If due to power or water incidents rather than the fault of the employer, employees or for other objective reasons such as natural calamity, fire, dangerous epidemic, enemy sabotage, relocation of the operation place upon request of a competent state agency, or for economic reasons, the wage for work suspension must be agreed by the two parties but must not be lower than the regional minimum wage stipulated by the Government.

Thus, according to the above regulations, it can be seen that the Labor Code 2019 of Vietnam no longer requires enterprises to pay suspension wage to employees from the 15th day onwards with a salary not lower than the regional minimum wage compared to current regulations. Instead, the Labor Code 2019 of Vietnam only stipulates that enterprises pay the salary for the first 14 days not falling below the statutory minimum wage.

Thus, from January 01, 2021, when an employee has to suspend working due to an epidemic, the suspension salary after the 15th day will be agreed upon by the enterprise and the employee, which means that the employee's suspension pay may be lower than the regional minimum wage.

On the other hand, recently, the National Wage Council has drafted recommendations to the Government on the regional minimum wage plan applied to employees in enterprises in 2021 in the direction of continuing to implement the monthly regional minimum wage until the end of 2021 (no adjustment in 2021). It is expected that the regional minimum wage in 2021 will remain unchanged compared to 2020 according to the provisions of Decree No. 90/2019/ND-CP of Vietnam’s Government.

Thus, if the Government agrees with the recommendation of the National Wage Council on the regional minimum wage plan to be applied to employees in enterprises in 2021 in the direction of continuing to implement the regional minimum wage in 2020 until the end of the 2021, region-based minimum wages are as follows:

- For enterprises located in region I: VND 4,420,000/month.

- For enterprises located in region II: VND 3,920,000/month.

- For enterprises located in region III: VND 3,430,000/month.

- For enterprises located in region IV: VND 3,070,000/month.

>>> View more: 04 new points on region-based minimum wages in 2021 that employees should know

Ty Na

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