What are the penalties for paying their employees salaries which are lower than the statutory minimum wages in Vietnam?

What are the penalties for paying their employees salaries which are lower than the statutory minimum wages in Vietnam? (Internet image)

Regarding this issue, LawNet answers as follows:

1. What are the penalties for paying their employees salaries which are lower than the statutory minimum wages in Vietnam?

According to Clause 3, Article 17 of Decree 12/2022/ND-CP, 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 75.000.000 shall be imposed if the violation involves 51 employees or more.

Note: Clause 1, Article 6 of Decree 12/2022/ND-CP stipulates a fine level for the act of paying their employees salaries which are lower than the statutory minimum wages, applicable to individuals. The fine level for violating organizations is 2 times higher than that for individuals.

Thus, individuals employing workers who pay wages lower than the regional minimum may be fined up to a maximum of VND 75 million. In case the employer is an organization or an enterprise, the maximum fine can be up to 150 million VND.

2. Current statutory minimum wages per month and hour in Vietnam

Clause 1, Article 3 of Decree 38/2022/ND-CP stipulating that the regional minimum wage from July 1, 2022 is divided into statutory minimum wages per month and statutory minimum wages per hour as follows:

- Regarding statutory minimum wages per month:

+ Region I: 4,680,000 VND/month.

+ Region II: 4,160,000VND/month.

+ Region III: 3,640,000 VND/month.

+ Region IV: 3,250,000 VND/month.

- Regarding statutory minimum wages per hour:

+ Region I: 22,500 VND/hour;

+ Region II: 20,000 VND/hour;

+ Region III: 17,500 VND/hour;

+ Region IV: 15,600 VND/hour.

Note:

- The list of region-I, region-II, region-III and region-IV subregions is provided in the Appendix enclosed with Decree 38/2022/ND-CP.

3. Guidelines for the application of statutory minimum wages in Vietnam

- The statutory minimum wage per month is the minimum wage used as the basis for any agreement between employers and employees on monthly salary and payment thereof.

The job- or position-based salary of an employee who ensures the monthly normal working hours and has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per month.

- The statutory minimum wage per hour is the minimum wage used as the basis for any agreement between employers and employees on hourly salary and payment thereof.

The job- or position-based salary paid for every working hour to an employee who has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per hour.

- In case an employee receives a weekly or daily salary, a piece-rate pay or a fixed pay, the wages paid to the employee, when converted into monthly or hourly salary, shall not be lower than the statutory minimum wage per month or per hour.

The normal working hours-based converted monthly or hourly salary shall be subjected to the employer’s decision in accordance with regulations of law. To be specific:

+ The converted monthly salary shall equal the product of the weekly salary and 52 weeks divided by 12 months; or the daily salary multiplied by total normal working days in a month; or the piece-rate pay or fixed pay for the works performed during normal working hours in a month.

+ The converted hourly salary shall equal the weekly or daily salary divided by the normal working hours in a week or a day respectively; or the piece-rate pay or fixed pay divided by the working hours, considered as normal working hours, spent for producing a predetermined quantity of products or performing assigned works.

(Based on Article 4 of Decree 38/2022/ND-CP)

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE