Question 69: How to calculate the monthly salary in the case where there is an agreement on unpaid leave and there are 27 working days in the month?

429

Time-based salaries will be paid according to the actual number of months, weeks, days or hours that Employees have spent doing their work[1]. If Employees receive monthly salaries, salaries will be paid for a working month based on LCs[2]. Of note, monthly salaries do not depend on the normal number of working days in a month if Employees have enough working-days in that month. In this case, Employers must fully pay monthly salaries to Employees as agreed in LCs regardless of what month it is in the year.

However, if Employees request to take unpaid leave in a certain month and this is approved by Employers, Employers may refer to the daily wage calculating method as specified by the labour law to calculate the actual monthly salaries to be paid for that month.

  1. How to calculate daily wages

As prescribed by law, the daily wage will be determined by dividing the monthly salary by the normal number of working days that is chosen by the enterprise in accordance with law, but 26 days as a maximum[3].

The current labour law does not provide for a more specific way to determine “the normal number of working days that is chosen by the enterprise in accordance with law”. Therefore, the question is: (i) may the enterprise fix a number of working-days (e.g. 26 days) to calculate daily wages for all Employees in the month (including office staff and workers)? or (ii) the enterprise must calculate the normal number of working days in a month for each month in the year based on the working schedule that the enterprise has chosen[4] and which is specified in LCs as well as the registered ILRs, as long as the number of working days in a month does not exceed 26 days.

As advised informally by the DOLISA of Ho Chi Minh City, the determination of the normal number of working days in a month must be implemented according to opinion (ii) above. Specifically, Employers must refer to the working hours specified in LCs and the actual number of days in a month to determine the normal number of working days in that month. For example, if the number of working days in a month is 22, then the daily wage is determined by dividing the monthly salary in LCs by 22 days. If the number of working days in a month is 27, then the daily wage is determined by dividing the monthly salary specified in LCs by 26 days. As such, if the number of working days in the month when Employees ask for unpaid leave is 27, Employers can only divide the monthly salary by 26. The daily wage can be calculated by the following formula:

Daily wage for 1 working day = Monthly salary (in LCs) : Normal number of working days determined for each month and the working hours agreed in LCs (no more than 26 days)
  • 2. The method for calculating actual monthly salaries in case of an agreement on unpaid leave in a month

As compared to the method for calculating daily wages above, the following two methods will produce a difference in actual monthly salaries for the months with 27 working days: (i) based on daily wage and the number of actual working days in the month; and (ii) based on daily wage to deduct the wage of unpaid leave days from the monthly salary. With the loophole in labour law and based on the principle of preferential treatment of Employees, this matter has been dealt with by the MOLISA in Official Letter 1553/LĐTBXH-LĐLT to the DOLISA of Thanh Hoa Province as of 09/05/2016, specifically as follows:

  • Case 1: Employees with the actual number of working days over or equal to ½ the normal number of working days in the month
The actual salary paid in the month = Monthly salary (in LCs) [Daily wage (refer to the formula to calculate daily wage in Section 1 above) x Number of unpaid leave days in the month]
  • Case 2: Employees with the actual number of working days less than ½ the normal number of working days in the month
The actual salary paid in the month = Daily wage (refer to the formula to calculate daily wage in Section 1 above) x Actual number of working days in the month

[1] Article 94.1 Labour Code and Article 22.1 Decree 05/2015/NĐ-CP dated 12/01/2015

[2] Article 22.1 (a) Decree 05/2015/NĐ-CP dated 12/01/2015

[3] Article 4.4 (c) Circular 23/2015/TT-BLĐTBXH dated 23/06/2015 as amended and supplemented by Article 14.4 (a) Circular 47/2015/TT-BLĐTBXH dated 16/11/2015

[4] Article 104 of the Labour Code prescribes that: The normal working hours per day will not exceed 8 hours/day and 48 hours/week; the normal working hours per week will not exceed 10 hours/day and 48 hours/week.