Are businesses required to establish pay scales, payrolls and labor productivity norms in Vietnam?

Are businesses required to establish pay scales, payrolls and labor productivity norms in Vietnam? (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Are businesses required to establish pay scales, payrolls and labor productivity norms in Vietnam?

According to Article 93 of the Labor Code 2019, regulations on establishment of pay scales, payrolls and labor productivity norms are as follows:

- Every employer shall establish their worn pay scale, payroll and labor productivity norms as the basis for recruitment and use of labor, negotiation and payment of salaries.

- The labor rate shall be an average value that is achievable to most employees without having to extend their normal working hours, and must be experimented before officially introduced.

- The employer shall consult with the representative organization of employees (if any) during establishment of the pay scale, payroll and labor productivity norms.

The pay scale, payroll and labor productivity norms shall be publicly posted at the workplace before they are implemented.

Thus, businesses are required to establish pay scales, payrolls and labor productivity norms in Vietnam to recruit workers and negotiate job-based salaries with employees.

2. When developing the pay scales, payrolls , is it necessary to discuss opinions with the Trade Union?

Based on the provisions in Article 41 of Decree 145/2020/ND-CP, the case where the employer must consult and exchange opinions with the employee representative organization at the facility on salary scales, payroll, and labor norms is carried out as follows:

- The employer is responsible for sending the document with the content needing consultation and the exchange of opinions to the representative members participating in the dialogue on the employee side;

- The representative members participating in the dialogue on the workers' side are responsible for organizing the collection of opinions from the workers they represent and synthesizing them into documents for each representative organization of workers at the grassroots, a dialogue representative group of workers to send to employers; In cases where the content of the dialogue is related to the rights and interests of female workers, it is necessary to ensure that they get their opinions;

- Based on the opinions of the representative organizations of workers at the grassroots level, the dialogue representative group of workers and employers organizes a dialogue to discuss, exchange opinions, consult, and share information about the contents proposed by the employer;

- The number, participants, time, and location of the dialogue are determined by both parties according to grassroots democracy regulations at the workplace;

- Dialogue developments must be recorded in minutes and signed by representatives of the parties participating in the dialogue as prescribed in Clause 4, Article 39 of Decree 145/2020/ND-CP;

- No later than 03 working days from the end of the dialogue, the employer is responsible for publicly announcing the main contents of the dialogue at the workplace; The employee representative organization (if any) and the employee dialogue representative group (if any) disseminate the main contents of the dialogue to employee members.

Thus, when developing salary scales, salary tables, and labor norms, we must consult and exchange opinions with the representative organization of workers at the grassroots level (Trade Union).

3. Will businesses be fined if they do not develop a pay scales, payrolls in Vietnam?

Pursuant to Clause 1, Article 17, Decree 12/2022/ND-CP, 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.

Thus, employers who do not develop a salary scale or payroll will be subject to an administrative fine of between VND 5,000,000 million and VND 10,000,000 million.

Note: This fine applies to individuals, but in the case of organizations, the fine will be doubled.

Nguyen Ngoc Que Anh

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