What are the penalties imposed on enterprises for violating regulations on salaries in Vietnam?

What is salary?

Pursuant to the provisions of Article 90 of the Labor Code 2019, 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.

In the course of operation, the employer must comply with the salary regulations in the Labor Code 2019 and other relevant guiding regulations.

What are the penalties imposed on enterprises for violating regulations on salaries in Vietnam? (Internet image)

What are the penalties imposed on enterprises for violating regulations on salaries in Vietnam?

Pursuant to the provisions of Article 17 of Decree 12/2022/ND-CP, enterprises that violate regulations on salary in Vietnam will be sanctioned as follows:

(1) A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed upon an employer for commission of one of the following violations:

- Failing to publicly post the pay scale, payroll, labour productivity norms and bonus regulations at the workplace;

- Failing to establish pay scale, payroll, or labour productivity norms; failing to experiment labour productivity norms before they are officially introduced;

- Failing to consult with the internal representative organization of employees (if any) during the establishment of the pay scale, payroll, labour productivity norms and bonus regulations;

- Failing to provide salary notes to employees or providing salary notes to employees in breach of law;

- Failing to pay salaries fairly or discriminating against genders of employees who perform equal works.

(2) The following fines shall be imposed upon an employer for commission of one of the following violations: Failing to pay salaries on schedule as prescribed by law; failing to pay or insufficiently paying salaries to employees as agreed in their employment contracts; failing to make or insufficiently making overtime pay; failing to make or insufficiently making nightshift pay; failing to pay or insufficiently paying work suspension allowances as prescribed by law; restricting or interfering employees’ spending of their salaries; forcing employees to spend their salaries on goods or services of the employer or any particular providers decided by the employer; deducting from employees’ salaries in breach of law; failing to pay or insufficiently paying salaries to employees how are reassigned to perform works which are not specified in their employment contracts or during a strike; failing to make or insufficiently making payments to employees who, due to employment termination or job loss, have not taken or not entirely taken up their annual leave in compensation for their untaken leave days; failing to make or insufficiently making advance payments to employees who temporarily leave their works in accordance with regulations of law; failing to pay full salaries to employees who are not disciplined for their work suspension period:

- A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed if the violation involves 01 - 10 employees;

- A fine ranging from VND 10.000.000 to VND 20.000.000 shall be imposed if the violation involves 11 - 50 employees;

- A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 51 - 100 employees;

- A fine ranging from VND 30.000.000 to VND 40.000.000 shall be imposed if the violation involves 101 - 300 employees;

- A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed if the violation involves 301 employees or more.

In addition, the employer that commits the violation specified in (2) is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.

(3) The following fines shall be imposed upon an employer for paying their employees salaries which are lower than the statutory minimum wages announced by the Government:

- A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 01 - 10 employees;

- A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed if the violation involves 11 - 50 employees;

- A fine ranging from VND 50.000.000 to VND

In addition, the employer that commits the violation specified in (3) is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.

(4) The following fines shall be imposed upon an employer for failing to pay or insufficiently paying employees, who are not covered by compulsory social insurance, health insurance or unemployment insurance as prescribed by law, in addition to and at the same time with salary payment, amounts of money equal to total sums of compulsory social insurance, compulsory health insurance, and unemployment insurance premiums payable by the employer:

- A fine ranging from VND 3.000.000 to VND 5.000.000 shall be imposed if the violation involves 01 - 10 employees;

- A fine ranging from VND 5.000.000 to VND 8.000.000 shall be imposed if the violation involves 11 - 50 employees;

- A fine ranging from VND 8.000.000 to VND 12.000.000 shall be imposed if the violation involves 51 - 100 employees;

- A fine ranging from VND 12.000.000 to VND 15.000.000 shall be imposed if the violation involves 101 - 300 employees;

- A fine ranging from VND 15.000.000 to VND 20.000.000 shall be imposed if the violation involves 301 employees or more.

In addition, the employer that commits the violation specified in (4) is compelled to pay full amounts of money equal to total sums of compulsory social insurance, compulsory health insurance, and unemployment insurance premiums payable plus interests on such amounts, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.

Mai Thanh Loi

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