This is a right that employees need to be aware of when the employer delays payment of wages from the 15th day onward, as stipulated in the Labor Code 2019.
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Employees must know this benefit when companies delay salary payments from 2021 (Illustration)
To be specific, at Clause 4 Article 97 of the Labor Code 2019 stipulates:
If the salary is delayed by 15 days or more, the employer must compensate the employee with an amount at least equal to the interest of the delayed payment calculated according to the 1-month term deposit interest rate announced by the bank where the employer opens the salary payment account for the employee at the time of the salary payment.
This benefit is currently still being applied in accordance with Point b Clause 2 Article 24 of Decree 05/2015/ND-CP, specifically:
If the salary payment is delayed by 15 days or more, an additional amount at least equal to the delayed amount multiplied by the maximum 1-month term deposit interest rate announced by the State Bank of Vietnam at the time of the salary payment must be paid. When the State Bank of Vietnam does not prescribe the maximum interest rate, it shall be calculated according to the 1-month term deposit interest rate announced by the commercial bank where the enterprise or agency opens its transaction account at the time of the salary payment.
However, from January 1, 2021, when the Labor Code 2019 takes effect, the interest rate will no longer follow the maximum 1-month term deposit interest rate announced by the State Bank of Vietnam at the time of the salary payment but is strictly applied according to the 1-month term deposit interest rate announced by the bank where the employer opens the salary payment account for the employee at the time of the salary payment. This is a new point in the Labor Code 2019 compared to the Labor Code 2012.
Currently, many banks have 1-month term deposit interest rates higher than the interest rates prescribed by the State Bank of Vietnam. Therefore, from 2021, the late salary payment amount to be paid to employees may be higher than the previous regulations in the Labor Code 2012, however, whether the amount is higher or lower will depend on the bank where the employer opens the salary payment account for the employee.
Additionally, the Labor Code 2019 still maintains the salary payment period rules as in the Labor Code 2012, specifically:
- Employees paid by the hour, day, or week are paid after their working hours, days, or weeks or are paid in bulk as agreed by both parties but no more than 15 days must be paid once.
- Employees paid monthly are paid once a month or half a month. The payment time is agreed upon by both parties and must be set at a cyclical period.
- Employees paid based on products or contracts are paid according to the agreement of both parties; if the work takes many months, they are to be advanced monthly salary based on the workload done in the month.
When signing labor contracts, both the employer and the employee must accurately comply with the salary payment period regulations as stipulated above.
At the same time, employees should base their claims on the agreed salary payment period with the employer such that if the employer delays the payment by 15 days or more from the agreed payment period, the employee has to request the employer to pay an amount at least equal to the interest of the delayed payment calculated according to the 1-month term deposit interest rate announced by the bank where the employer opens the salary payment account for the employee at the time of the salary payment because this is the employee's right as clearly defined by law.
Le Hai
