Vietnam: Shall enterprises make late wages payment?

Pursuant to Article 94 of the Labor Code 2019 of Vietnam, employers shall directly, fully and punctually pay salaries to their employees. The salary payment time is prescribed as following:

• An employer who receives an hourly, daily or weekly salary shall be paid after every working hour, day or week respectively, or shall receive a sum within not more than 15 days as agreed by both parties.

• An employee who receives a monthly or bi-weekly salary shall be paid after every month or every two weeks respectively. The payment time shall be periodic and agreed upon by both parties.

• An employee who receives a piece rate or a fixed amount shall be paid as agreed by both parties. In case a task cannot be completed within one month, the employee shall receive a monthly advance payment based on the amount of work done in the month.

However, in case of a force majeure event in which the employer is unable to pay the employee on schedule after all remedial measures have been implemented, the salary shall be paid within 30 days.

Therefore, in accordance with Vietnamese law, enterprises shall not owe employees salaries, except for force majeure cases in which the salary shall be paid within 30 days.

Fines for enterprises making late wages payment

Pursuant to Clause 2 Article 16 of the Decree No. 28/2020/NĐ-CP, depending on the number of employees being paid late wages, employers shall face a fine prescribed as following:

• A fine ranging from VND 5,000,000 to VND 10,000,000 to be imposed if the violation involves 01 – 10 employees;

• A fine ranging from VND 10,000,000 to VND 20,000,000 to be imposed if the violation involves 11 – 50 employees;

• A fine ranging from VND 20,000,000 to VND 30,000,000 to be imposed if the violation involves 51 – 100 employees;

• A fine ranging from VND 30,000,000 to VND 40,000,000 to be imposed if the violation involves 101 – 300 employees;

• A fine ranging from VND 40,000,000 to VND 50,000,000 to be imposed if the violation involves 301 or more employees.

The above fines apply to individual employers. In case enterprises violate, they will be fined as twice of the above-mentioned fine.

Moreover, employers are compelled to pay the full repayment of wage and salary plus the amount of late payment interest calculated at the highest demand deposit interest rates publicly quoted by state-owned commercial banks on the date of imposition of such penalty for the violations.

Employees shall receive an interest in case employers making late wages payment 

Pursuant to Clause 4 Article 94 of the Labor Code 2019 of Vietnam, in case a salary is paid at least 15 days behind schedule, the employer shall pay the employee a compensation that is worth at least the interest on the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s salary account is opened.

Bao Ngoc

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