Paying less than the regional minimum in Vietnam, will the company be fined?
According to the recent Decree 38/2022/ND-CP of the Government, from July 1, 2022, the minimum wage will be officially increased for employees working under labor contracts. So, in case the salary is lower than the regional minimum, will the company be fined or not? Being paid less than the minimum wage, what to do to claim benefits? Let’s find out the content of the above provisions in the following article of Lawyer X.
Legal grounds
- Labor Code 2019
- Decree 38/2022/ND-CP
- Decree 12/2022/ND-CP
Principles of paying employees according to regulations?
Additional regulations that the employer may not:
Limiting or interfering with the employee’s right to self-determination of salary expenditure;Forcing employees to spend their salaries on the purchase of goods and use of services by the employer; or of another entity designated by the employer.
(According to Clause 2, Article 94 of the Labor Code 2019)
Employees are entitled to receive a salary statement each time they receive their salary, clearly stating their salary, overtime pay, nighttime salary, content and amount of deduction (if any). This is a new point in Clause 3, Article 95 of the Labor Code 2019, not yet in the 2012 Labor Law.
The employee is compensated with an amount at least equal to the interest of the late payment amount calculated at the interest rate on mobilizing deposits with a term of 1 month, which is issued by the bank where the employer opens the account to pay wages to the employee. The employee shall announce at the time of salary payment if the salary is delayed for 15 days or more as prescribed in Clause 4, Article 97 of the Labor Code 2019.
The employee does not have to pay an account opening fee if the salary is paid via a bank (currently according to the provisions of Clause 2, Article 94 of the Labor Code 2012, the two parties agree).
What year does the regional minimum come in?
Currently, according to Article 91 of the Labor Code 2019, the regional minimum wage is the lowest salary paid to employees doing the simplest jobs under normal working conditions in order to ensure the minimum standard of living of the workers. workers and their families, suitable to socio-economic development conditions.
The applied regional minimum wage will be decided by the Government and announced on the basis of recommendations of the National Wage Council.
The term regional minimum wage appeared at the earliest from the Labor Code 1994, which took effect on January 1, 1995. Also according to Article 56 of this Code, the regional minimum wage is decided by the Government and announced after consulting the Vietnam General Confederation of Labor and the representative of the employer.
However, it was not until 2007 that the Government issued the first Decree on regional minimum wages, Decree 167/2007/ND-CP. The regional minimum wages specified in this Decree shall be effective from January 1, 2008.
How are wages paid to employees made?
According to Clause 1, Article 94 of the Labor Code 2019, enterprises are responsible for paying wages directly, fully and on time to employees.
The salary paid to the employee is the amount that the parties have agreed to perform at the request of the employer. Pursuant to Clause 1, Article 90 of the Labor Code 2019, an employee’s salary includes:
- Salary according to job or title.
- Salary allowance and other additional allowances.
In particular, the salary according to the job or title must not be lower than the minimum wage.
On the other hand, salary allowances and other supplements will be agreed upon by the parties themselves, not required.
Therefore, the lowest salary paid to employees must be equal to the regional minimum wage prescribed by the Government.
From July 1, 2022, the regional minimum wages applicable to employees working in enterprises shall comply with Decree 38/2022/ND-CP as follows:
| Businesses in the region | Region minimum wage |
| Region I | 4.68 million VND/month |
| Region II | 4.16 million VND/month |
| Region III | 3.64 million VND/month |
| Region IV | 3.25 million VND/month |
Paying less than the regional minimum, will the company be fined?
Pursuant to Clause 3, Article 17 of Decree No. 12/2022/ND-CP, the fine level imposed on the employer for the act of paying the employee’s salary lower than the minimum wage is prescribed as follows:
– From 20 million VND to 30 million VND for violations from 01 to 10 employees;
– From 30 million VND to 50 million VND for violations from 11 to 50 employees;
– From VND 50 million to VND 75 million for violations of 51 or more employees.
Note: The fine level for paying wages lower than the above minimum wage applies to individuals. The fine level for violating organizations is 2 times higher than that for individuals (Clause 1, Article 6 of Decree 12/2022/ND-CP).
Thus, according to the above regulations, individuals who employ workers who pay wages lower than the regional minimum can be fined up to 75 million VND. In case the payer is an organization or an enterprise, the maximum fine can be up to 150 million VND.
Being paid less than the regional minimum, what to do to claim benefits?
In order to fully claim the wages they deserve, employees who are paid less than the regional minimum wage can do one of the following:
Method 1. Complaints
According to Decree 24/2018/ND-CP, with salary disputes, employees must first submit a complaint to the enterprise to request full payment of wages according to the regional minimum wage.
If the enterprise deliberately fails to settle or settles it unsatisfactorily, the employee has the right to make a second complaint to the Chief Inspector of the Department of Labor, War Invalids and Social Affairs where the enterprise is located.
In the process of settling complaints, when detecting violations by enterprises, the labor inspectors will conduct administrative sanctions and require enterprises to pay full wages and interests to employees.
Method 2. Report
The act of paying wages lower than the regional minimum wage is a violation of the law and infringes upon the legitimate rights and interests of employees. Therefore, according to Decree 24/2018/ND-CP, employees can report this violation directly to the Chief Inspector of the Department of Labor, War Invalids and Social Affairs where the enterprise is located.
When dealing with a case that determines the violation by the enterprise, the labor inspector will conduct administrative sanctions and require the enterprise to pay full wages and interest to the employees.
Related articles:
- Rights of employees when unilaterally terminating the labor contract
- Employee’s rights when the labor contract is terminated without a valid reason by Vietnamese law
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Frequently asked questions
The minimum wage is adjusted based on the minimum standard of living of workers and their families; the correlation between the minimum wage and the market wage; consumer price index, economic growth rate; labor supply and demand relationships; employment and unemployment; labor productivity; ability of the enterprise to pay (according to Article 91 of the Labor Code 2019).
Employees work under the labor contract regime in accordance with the provisions of the Labor Code.
Enterprises established, organized, managed and operated under the Enterprise Law.
Cooperatives, unions of cooperatives, cooperative groups, farms, households, individuals and other organizations of Vietnam that employ labor under labor contracts.
Foreign agencies, organizations, international organizations and foreigners in Vietnam that employ laborers under labor contracts (except in the case of international treaties to which the Socialist Republic of Vietnam is a contracting party). members have provisions different from those of Decree 90/2019/ND-CP).
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