Question 72: May Employers deduct Employees’ salaries on the grounds of their late work?

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Pursuant to labour law[1], Employers are prohibited from applying the form of fines, salary cut instead of LD action. Accordingly, the deduction of salaries due to going to work late is a violation of labour law. In order to handle this case in accordance with the labour law, Employers may stipulate the conduct of going to work late in the ILRs in order to handle LD against Employees in form of reprimand. For example, the ILRs stipulate that: “If you go to work late more than 3 times a week (more than 15 minutes/time), you will be subject to the discipline in form of written reprimand” etc.

In fact, Employers in some cases still do not pay full salary to late-arriving Employees on the grounds that late time is a period of inactivity and Employers are not obliged to pay Employees for the period of no such employment. Employees’ late arrival will be determined by Employers through an automatic time attendance system which records the arrival and departure time of any Employee. Accordingly, the number of minutes of late work each day will be accumulated in a month to calculate the number of hours Employees do not work. Employees are paid only for the remaining working hours in that month after deducting the number of late hours in the said month.

However, the said arguments will be considered inconsistent with the labour law. Accordingly, the prevailing forms of salary payment for Employees now include the forms of salary paid by the time, by the product or by a lump sum. In particular, the form of salary by the time will include the monthly, weekly and hourly salaries[2], excluding minutes or salaries calculated in smaller units of time. Employees who are paid hourly, daily or weekly will be paid after hours, days or weeks of working, or will be paid in a total sum as agreed upon by the two parties, but must be paid in a total sum once for at least 15 days[3]. Thus, accumulating the number of late minutes of Employees each day in a month to calculate the number of non-working hours as a basis for paying monthly salaries is not in accordance with the labour law. In addition, the labour law stipulates that the selected form of salary payment must be maintained for a definite period. In case of any change in the form of salary payment, Employer must inform Employees at least 10 days in advance[4]. Therefore, Employers shall not pay Employees on a both monthly and hourly basis in case of a number of arising late hours from Employees in the month as aforesaid.

Where Employers further deduct salaries due to Employees’ late arrival instead of their LD action, Employers may be subject to legal risk if Employees complain or initiate a lawsuit at a local labour management authority or a competent court. At the same time, Employers will also be fined from 20,000,000 to VND 30,000,000[5].

[1]Article 128.2 Labor Code

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

[3]Article 95.1 Labor Code

[4]Article 94.1 Labor Code

[5]Article 15.3 (b) Decree 95/2013/NĐ-CP dated 22/08/2013 as amended and supplemented by Decree 88/2015/NĐ-CP dated 07/10/2015