“Hello Lawyer. I am a fresh graduate. I applied for a job in a company, but when the labor contract was signed, the company asked to withhold the employee’s salary for the first month. So, please let me know if the provision of temporary salary detention is legal? I really need the help and support of a lawyer, I hope the lawyer can provide me with information about the law on this issue. We look forward to hearing from you as soon as possible. Thank you sincerely.” Thank you for trusting and sending questions to our Lawyer X. Below is the article Is it legal to withhold employee salaries in Vietnam? We invite you to read along.
Legal grounds
Labor Code 2019
Decree 28/2020/ND-CP
Consulting content
Paying Principles
According to the current Vietnamese law, the employer must comply with the salary payment principle as follows:
Firstly, the employer must pay the salary directly, in full and on time to the employee. In case the employee cannot receive the salary directly, the employer can pay the salary to the person legally authorized by the employee.
Second, the employer must not restrict or interfere with the employee’s right to self-determination of salary expenditure; Employees must not be forced to spend their salaries on the purchase of goods or services from the employer or other units designated by the employer.
In addition, the employer pays the employee based on the agreed salary, labor productivity and quality of work performance; The salary stated in the labor contract and the salary paid to the employee is in Vietnam Dong. In case the employee is a foreigner in Vietnam, it may be in a foreign currency; Each time a salary is paid, the employer must notify the employee’s salary statement, clearly stating the salary, overtime salary, night-time salary, content and amount of withholding minus (if any).
Is it legal to withhold employee wages?
According to the provisions of Article 14 of the Labor Code 2019, the form of a labor contract must be entered into in writing and made in 02 copies. The company’s provision of temporary salary detention of employees is a violation of the provisions of Clause 2, Article 17 of the acts that the employer must not do when entering into and performing the labor contract: The employee must implement a security measure in cash or other property for the performance of the labor contract. As such, it is illegal for the company’s board of directors to include this clause in the employment contract.
In addition, according to the provisions of Article 94 of the Labor Code 2019 on the principle of salary payment:
Employers must pay wages directly, in full and on time to employees. In case the employee cannot receive the salary directly, the employer can pay the salary to the person legally authorized by the employee.
The employer must not restrict or interfere with the employee’s right to self-determination of salary expenditure; Employees must not be forced to spend their salaries on the purchase of goods or services from the employer or other units designated by the employer.
How are employers penalized for withholding employee wages?
According to the provisions of Clause 2, Article 16, violations of regulations on salary payment are as follows:
Fines shall be imposed on employers who commit one of the following acts: Paying wages not on time; fail to pay or pay insufficiently wages to employees as agreed in the labor contract; not paying or not paying enough wages to employees, etc.
From VND 5,000,000 to VND 10,000,000 for violations from 01 to 10 employees;
From 10,000,000 VND to 20,000,000 VND for violations from 11 to 50 employees;
From VND 20,000,000 to VND 30,000,000 for violations from 51 to 100 employees;
From VND 30,000,000 to VND 40,000,000 for violations from 101 to 300 employees;
From VND 40,000,000 to VND 50,000,000 for violations of 301 employees or more.
Thus, it can be seen that the law regulates the behavior of withholding wages or agreements with employees. For these cases, the fine is quite high, possibly up to 50 million. This is a relatively light penalty for these acts.
In fact, there are many cases where employers agree to keep the employee’s first month’s salary to ensure a certain obligation. In particular, this problem exists not less for the case of students, mass workers who work part-time at supermarkets, restaurants, etc. Therefore, when workers encounter this situation, they can apply for an application. complaints and denunciations to competent agencies for settlement in order to protect interests.
What is the pay period for employees?
The payment term can be daily or monthly depending on the agreement of the parties. However, if there are force majeure events, it is allowed to pay later; but not later than 1 month. Specifically, according to the provisions of Clause 4, Article 97 of the Labor Code 2019 on the salary payment period for employees in case of force majeure as follows:
“Where due to force majeure the employer; have tried all remedies but cannot pay wages on time, not more than 30 days late; if payment is delayed for 15 days or more; then the employer must compensate the employee an amount at least equal to the interest of the late payment amount; according to the interest rate for mobilizing deposits with a term of 1 month issued by the bank where the employer opens an account; pay wages to employees announced at the time of salary payment.”
- Employees who receive hourly, daily and weekly wages shall be paid after hours, days and weeks of work or are paid in a lump sum as agreed by the two parties, but within 15 days, they must be paid in lump sum.
- Employees receiving monthly salary are paid once a month or semi-monthly. The time of salary payment is agreed upon by both parties and must be fixed at a cyclical time.
- Employees who are paid by product or by contract shall be paid according to the agreement of the two parties; if the work must be done for many months, the monthly salary will be advanced according to the volume of work done in the month.
Time of full payment of amounts related to the interests of the parties upon termination of the labor contract
Within 14 working days from the date of termination of the labor contract, the two parties are responsible for fully paying the sums related to the interests of each party, except for the following cases where it can be extended but not: beyond 30 days:
– The employer who is not an individual terminates the operation;
– Employers change structure, technology or for economic reasons;
– Split, split, merge, merge; sale, lease, change the type of business; transfer of ownership, right to use assets of enterprises or cooperatives;
– Due to natural disaster, fire, enemy sabotage or dangerous disease.
Wages, social insurance, health insurance, unemployment insurance, severance pay and other benefits of employees under the collective labor agreement, labor contract are prioritized for payment in the school. In case of enterprises or cooperatives being terminated, dissolved, or bankrupt.
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Frequently asked questions
Pursuant to Article 102 of the Labor Code 2019, stipulating that the employer is entitled to salary deduction as follows:
The employer may only deduct the employee’s salary to compensate for damage caused by damage to tools, equipment and the employer’s property according to the provisions of Article 129 of this Code.
The employee has the right to know the reason for the deduction of his salary.
The monthly salary deduction must not exceed 30% of the employee’s monthly salary after deduction of compulsory social insurance, health insurance, unemployment insurance, and personal income tax.
Employees who work overtime are paid according to the salary unit price or the actual salary paid according to the work they are doing as follows:
a) On weekdays, at least 150%;
b) On weekly rest days, at least 200%;
c) On public holidays, New Year’s Day and days off with pay, at least equal to 300%, excluding the salary for holidays, New Year’s Day and paid holidays for employees receiving daily salary.
Employees who work at night shall be paid at least 30% of the salary calculated according to the salary unit price or the actual salary paid according to the work of the normal working day.
Employees who work overtime at night, in addition to paying salaries as prescribed in Clauses 1 and 2 of this Article, employees are also entitled to an additional 20% of their salary calculated according to the wage unit price or the salary according to the job. daytime work on a normal working day or on a weekly rest day or on a public holiday or New Year’s Day.
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