Are employment contracts in Vietnam required to have regimes for pay rise?

Are employment contracts in Vietnam required to have regimes for pay rise? (Internet image) 

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

1. What are pay rises?

Pursuant to Article 103 of the Labor Code 2019, pay rises including increases in salary, pay grades, allowance, benefits and other types of incentives for an employee shall be agreed on in the employment contract or the collective bargaining agreement, or stipulated in the regulations of the employer.

2. Are employment contracts in Vietnam required to have regimes for pay rise?

According to Clause 1, Article 21 of the Labor Code 2019, an employment contract shall have the following major contents:

- The employer’s name, address; full name and position of the person who concludes the contract on the employer’s side;

- Full name, date of birth, gender, residence, identity card number or passport number of the person who concludes the contract on the employee’s side;

- The job and workplace;

- Duration of the employment contract;

- Job- or position-based salary, form of salary payment, due date for payment of salary, allowances and other additional payments;

- Regimes for promotion and pay rise;

- Working hours, rest periods;

- Personal protective equipment for the employee;

- Social insurance, health insurance and unemployment insurance;

- Basic training and advanced training, occupational skill development.

Thus, Regimes for pay rise is one of the mandatory contents in the employment contract.

3. What are the penalties imposed upon an employer entering into employment contracts that do not contain primary information in Vietnam?

According to Clause 1, Article 9, Decree 12/2022/ND-CP stipulates the following fines shall be imposed upon an employer entering into employment contracts that do not contain primary information as prescribed by law:

- A fine ranging from VND 2.000.000 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 10.000.000 shall be imposed if the violation involves 11 - 50 employees;

- A fine ranging from VND 10.000.000 to VND 15.000.000 shall be imposed if the violation involves 51 - 100 employees;

- A fine ranging from VND 15.000.000 to VND 20.000.000 shall be imposed if the violation involves 101 - 300 employees;

- A fine ranging from VND 20.000.000 to VND 25.000.000 shall be imposed if the violation involves 301 employees or more.

Based on Clause 1, Article 6 of Decree 12/2022/ND-CP, the above fine level shall be imposed upon violating individuals. The fine imposed upon an organization is twice as much as that imposed upon an individual for committing the same administrative violation.

4. Establishment of pay scales, payrolls and labor productivity norms in Vietnam

- 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.

(Article 93 of the Labor Code 2019)

Nguyen Ngoc Que Anh

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