In certain cases, enterprises are forced to suspend business for a period of time. The business suspension for a calendar year is not subject to Frofit tax (Corporate income tax) if no revenue is generated. However, there are still many questions related to whether to pay wages when suspending business? To answer this question, LSX legal firm provides this article: Do suspended enterprises pay employees’ wages
Legal ground
- Law on enterprise 2020
“Article 206. Business suspension and termination
The enterprise shall send a written notice to the business registration authority at least 03 working days before the date of suspension or resumption of operation.
2. The business registration authority and competent authorities are entitled to request an enterprise to suspend or terminate its business operation in the following cases:
a) The enterprise that does not fully satisfy the conditions for doing business in restricted business lines must suspend or terminate business operation in the corresponding business lines.
b) Relevant authorities request the suspension in accordance with regulations of law on tax administration, environment, and relevant laws;
c) Operation in one or some business lines has to be suspended or terminated under a court decision.
During the temporary suspension, the enterprise must fully pay unpaid taxes, social insurance, health insurance, unemployment insurance and perform contracts with customers and employees, except for the following cases: Enterprises, creditors, customers and employees have other agreements. “
Do suspended enterprises pay employees’ wages?
Under Clause 3 of Article 206 above, for employees during the business suspension, Enterprises must reach an agreement with them on the rights, jobs (such as paying wages while waiting for business re-opening), suspending contract performance because of the company’s business suspension, etc.
Therefore, during the temporary suspension of business, the employee must enjoy certain benefits on the basis of an agreement with the employer. Negotiate the salary waiting for work, waiting for the business’s return to operation time. Or agree to wait for the end of the next working term, certain allowances and incentives.
Therefore, in the case when you quit your job during the company’s suspension of business; then the company must proceed to pay the salary for you while waiting to work in accordance with the law.
If the company cuts your salary during the business suspension period, it is against the law. Accordingly, you can appeal to the business owner; or the company’s board of directors.
Lastly, if the company does not resolve the appeal, you can go to the third agency; that is the People’s Court to conduct lawsuits according to the civil procedure law of Vietnam
Do suspended enterprises pay social insurance?
As mentioned above, during the business suspension, the enterprise must complete the performance of the contract signed with the employee; unless there are other agreements between the enterprise and the employee.
Therefore, enterprises must continue to pay social insurance for employees if the enterprise has no other agreement with the employee. If the employee and the employer have an agreement not to pay social insurance during the business suspension period, the settlement will be different.
In another word, in case the company has no agreement with the employee but requires the employee to pay 100% of the insurance premium, including the amount that the employer must pay; is against the law.
LSX legal firm’s service on business suspension
Business suspension is a necessary solution for businesses when they cannot continue performing business for a specified period of time. Suspending business quickly will help enterprises avoid unnecessary costs. Meanwhile, the business suspension process is quite complicated with many procedures; if businesses do it themselves, they will face many risks. Using the business suspension service of LSX will secure you in each stage of the procedure. We provide:
- Advice on the most necessary documents and procedures for business suspension.
- Compilation of registration documents; we guarantee to provide customers with the most appropriate, latest forms.
- On behalf of customers, we will submit documents, receive and respond to appraisals, pay fees and charges.
- Follow the processing of the application.
- Supplement or correct the dossiers at the request of the Senior Case Processing (if there are any).
After all, LSX provides the service with the desire that customers can experience it the best way. Additionally, we guarantee the cost to be the most suitable and economical for customers.
Related articles
- Termination of branches and representative offices and business locations in Vietnam
- Temporary suspension of business services for foreign companies
- Procedures for business suspension for the second time in 2022
Related Questions
– A notification of enterprise suspension
– The decision and legitimate copy of the minutes of meeting of the Board of members (if the enterprise is a multi-member limited liability company), the company’s owner (if the enterprise is a single-member limited liability company), the Board of Directors (if the enterprise is a joint-stock company), or general partners (if the company is a partnership)
The enterprise must send a notification to the business registration office and tax office at least 15 days before suspension. The notification should content:
– Name, address of the premises, taxpayer identification number (TIN);
– Suspension period, beginning date and ending date of the suspension;
– Reasons for suspension.
The suspension period must not exceed one year. If the enterprise is still suspended after this period, another notification must be sent to Business Registration Office and tax office. The total duration of continuous suspension must not exceed two year.
After receiving the dossier from the enterprise, the business registration office shall process the dossier within 03 working days to produce the results:
– A written certification of the enterprise’s business registration of business suspension if the dossier is valid;
– Notice of amendment and supplementation of the dossier if the dossier is not valid.
There is no fee for this procedure.
Contact LSX
Finally, hope this article is useful for you to answer the question about “Do suspended enterprises pay employees’ wages in Vietnam”. If you need any further information, please contact LSX Law firm: +84846175333 or Email: [email protected]
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