Tiếng Việt
中文 (中国)
Based on the principles of fairness and sustainable development, the application and compliance with regulations regarding salaries are fundamental aspects that cannot be overlooked in Vietnam’s labor law system in 2024. In a society undergoing development and active integration into the global economy, protecting the rights and ensuring the living standards of employees through salary regulations is not only a legal obligation but also a humanitarian duty, contributing to building a fair and developed society.
The following article will clarify the provisions regarding the salary system according to Vietnamese labor law in 2024.
Definition of Salary
According to the provisions of the 2019 Labor Code, salary is the amount that employers pay to employees under agreements to perform work, including job-based or title-based wages, salary allowances, and other supplements.
Specifically, the agreed job-based or title-based wage must not be lower than the minimum wage. Employers must ensure equal pay without gender discrimination for employees performing work of equal value.
Minimum Wage
The minimum wage is the lowest wage paid to employees for the simplest work under normal working conditions to ensure the minimum living standards of employees and their families, in line with economic and social development conditions.
The minimum wage is established by region, determined by month or hour. According to Decree No. 38/2022/NĐ-CP, the minimum monthly wage has been applied since July 1, 2022, divided into 4 regions as follows: Region 1 is 4,680,000 VND/month; Region 2 is 4,160,000 VND/month; Region 3 is 3,640,000 VND/month; and Region 4 is 3,250,000 VND/month.
It is projected that the minimum wage in Vietnam to be applied from July 1, 2024, will be: Region 1 minimum wage is 4,960,000 VND/month; Region 2 minimum wage is 4,410,000 VND/month; Region 3 minimum wage is 3,860,000 VND/month; and Region 4 minimum wage is 3,450,000 VND/month.
This increase was finalized by the National Wage Council at the end of 2024, with an increase of approximately 6%. The expected implementation date is July 1, 2024, though the implementation timeframe may change if necessary.
(The National Wage Council is an advisory body to the Government on the minimum wage and wage policies for employees. The Prime Minister establishes the National Wage Council, including members representing the Ministry of Labor – Invalids and Social Affairs, the Vietnam General Confederation of Labor, some organizations representing employers at the central level, and independent experts.)
The minimum wage is adjusted based on the minimum living standards of employees and their families; the relationship between the minimum wage and wages in the market; the consumer price index, economic growth rate; labor supply and demand; employment and unemployment; labor productivity; and the ability of businesses to pay.
Establishing Salary Scales, Salary Tables, and Labor Norms
Employers must establish salary scales, salary tables, and labor norms as a basis for recruitment, labor utilization, agreeing on job-based or title-based wages stated in labor contracts, and paying wages to employees.
Employers must consult the opinions of labor representative organizations at the grassroots level when establishing salary scales, salary tables, and labor norms.
Labor norms must be the average level that ensures most employees can achieve without extending normal working hours and must be applied on a trial basis before formal issuance. However, currently, most Vietnamese enterprises recruiting labor do not strictly adhere to reasonable labor norms.
For example, when recruiting employees for manufacturing workshops, both employees and employers informally agree on allowances, basic overtime to ensure employees can achieve a living wage, while the salary on the contract revolves around the minimum wage, serving as a basis for social insurance contributions.
Principles of Salary Payment
Employers must pay salaries directly, fully, and on time to employees based on the agreed-upon wages, labor productivity, and quality of work performance. In cases where employees cannot receive salaries directly, employers may pay salaries to individuals authorized by the employees legally.
Salaries specified in labor contracts and salaries paid to employees are in Vietnamese Dong. In the case of foreign employees in Vietnam, salaries may be paid in foreign currency.
Each time salaries are paid, employers must provide a payroll statement to employees, clearly indicating the salary, overtime pay, night shift pay, deductions (if any), and other relevant information.
Employers are not allowed to restrict or interfere with employees’ autonomy in spending their salaries. They cannot compel employees to spend their salaries on purchasing goods or using services from the employer or designated entities.
In Vietnam, despite these regulations, there are still many cases where employees are forced to buy company inventory products at lower prices or receive bonuses converted into company-produced items, significantly affecting employees’ rights.
Salary Payment Periods
Employees paid hourly, daily, or weekly wages are paid after the hours, days, or weeks worked or may be paid collectively as agreed upon by both parties, but not exceeding 15 days must be paid collectively at one time. Employees paid monthly wages are paid once a month or half a month. The timing of salary payment is agreed upon by both parties and must be determined at a regular interval.
Employees paid based on output or piecework are paid according to the agreement of both parties; if the work spans multiple months, advances are paid monthly based on the amount of work completed in the month.
In cases where, due to force majeure, the employer has exhausted all means to pay salaries on time but cannot do so, salaries must not be delayed for more than 30 days. If salaries are delayed for 15 days or more, the employer must compensate the employee with an amount at least equal to the interest on the delayed amount calculated at the interest rate for one-month term deposits at the bank where the employer maintains the account used to pay salaries, announced at the time of salary payment.
Overtime Pay, Night Shift Pay
Employees working overtime are paid at least 150% of the regular wage on normal days; at least 200% on weekly rest days; and at least 300% on holidays, weekends, or rest days with wages, not including holiday, weekend, or rest day wages.
Employees working night shifts are paid at least 30% more than the regular wage calculated at the regular wage rate or the actual wage rate for regular workdays.
Employees working overtime at night are paid an additional 20% on top of the above-mentioned rates, calculated based on the regular wage rate or the actual wage for work during normal workdays, weekly rest days, or holidays.
Salary Upon Termination of Employment
In cases of termination, employees are paid as follows:
- If the termination is due to the employer’s fault, the employee is paid the full salary according to the labor contract.
- If the termination is due to the employee’s fault, the employee is not paid salary; other employees in the same unit who must also stop working are paid according to the agreed-upon rate, but not lower than the minimum wage.
- If termination is due to electricity or water failures not caused by the employer, or due to natural disasters, fires, dangerous epidemics, calamities, relocation of operating locations as required by competent state agencies, or for economic reasons, the parties agree on the salary for the period of cessation as follows:
a) If the cessation is for 14 working days or fewer, the agreed-upon cessation salary must not be lower than the minimum wage.
b) If the cessation exceeds 14 working days, the cessation salary is agreed upon by both parties but must ensure that the cessation salary for the first 14 days is not lower than the minimum wage.
Salary Advances
Employees may receive salary advances based on mutually agreed conditions and without accruing interest.
Employers must provide employees with salary advances corresponding to the number of days the employee temporarily suspends work to fulfill civic duties, ranging from 1 week up to a maximum of 1 month of wages according to the labor contract. Employees must repay the advanced amount.
Employees enlisted in military service according to the provisions of the Military Service Law are not eligible for salary advances.
During annual leave, employees are entitled to an advance payment at least equal to the salary for the days of leave.
Salary Deductions
Employers are only allowed to deduct an employee’s salary to compensate for damages caused by damaging tools, equipment, or property of the employer according to Article 129 of the Labor Code 2019.
Employees have the right to know the reasons for the deduction of their salary.
The monthly deduction amount must not exceed 30% of the employee’s actual monthly salary after deducting mandatory social insurance contributions, health insurance, unemployment insurance, and personal income tax.
Bonuses
Bonuses refer to the amount of money, property, or other forms of rewards that employers give to employees based on production results, business performance, or job performance.
Bonus regulations are determined and publicly announced by employers at the workplace after consulting with the representative organization of employees at the grassroots level.
In Vietnam, the 13th-month salary essentially serves as a form of bonus for employees based on the business performance of the enterprise in the past year as well as the efforts and contributions of employees during that time.
Therefore, Tet bonuses or the 13th-month salary are not mandatory. Employees have no legal basis to sue employers if they do not receive Tet bonuses. This principle also applies in cases where the enterprise has had an effective working year but still does not provide Tet bonuses to employees.
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