Article 19.2 of the Labor Code stipulates that Employees must provide Employers with the information on their name, age, gender, place of residence, educational level, occupational skill level, health status and other matters directly related to the conclusion of LCs (“Personal Information”). Accordingly, the collection of Personal Information in accordance with the law is only for the purpose of entering into LCs.
Pursuant to the Labor Code and current guiding documents on Employers’ obligation to pay salaries, Employers must pay Employees salaries directly, in full and on time[1]. The late salary payment is only considered in some force majeure cases where despite their seeking all remedies, Employers still cannot pay salaries on schedule as agreed in the contract[2] due to natural disasters, fire or other force majeure events.
However, the late salary payment in the said cases must not be delayed for more than one month and Employers must pay Employees an additional amount: (i) If the period of late salary payment is less than 15 days, no additional amount will be paid; or (ii) If the period of delay is 15 days or more, an additional amount equal to the amount of late payment multiplying by the ceiling interest rate of mobilised one-month term deposits announced by the State Bank at the time of salary payment.
In addition, Employers and Employees may agree to choose one of the following two types of salary payment: (i) in cash; or (ii) transfer via Employees’ personal account opened at the bank[3]. In cases where Employees and Employers agree in LCs on salary payment through transfer, Employers will have the right to request Employees to provide more information on their personal accounts in order to make payment.
Pursuant to the PIT law, Employers are responsible for deducting PIT from Employees’ salaries to pay to the competent tax authority before paying Employees[4]. Therefore, in order to deduct PIT, in principle, Employees must register and provide information on their dependents and personal tax codes for tax reduction in accordance with Circular 111/2013/TT-BTC, if applicable. However, in cases where Employees fails to provide sufficient information on their dependents for PIT deduction at the time of salary payment, Employers must still deduct an amount of PIT from Employees’ salaries without any reduction for their dependents to be able to pay Employees salaries and remit PIT to the competent State agency in line with the agreement and time limit. The PIT law has covered no specific provisions on allowing the deferral of tax deduction and salary payment for the reason that Employees fail to provide full information on their dependents and PIT codes.
Thus, except for the reason that Employees have not yet provided bank account information for Employers to pay salaries, Employers are not entitled to delay the salary payment to Employees because Employees have not yet provided their sufficient Personal Information.
Therefore, if the local labour management authority detects any delay in paying Employees’ salaries, Employers may be subject to administrative penalties as follows[5]:
- Between VND10,000,000 and 20,000,000 for violations involving between 1 and 10 Employees;
- Between VND20,000,000 and 40,000,000 for violations involving between 11 and 50 Employees;
- Between VND40,000,000 and 60,000,000 for violations involving between 51 and 100 Employees;
- Between VND60,000,000 and 80,000,000 for violations involving between 101 and 300 Employees; or
- Between VND80,000,000 and 100,000,000 for violations involving 301 Employees or more.
In addition, Employers are obliged to pay Employees full salary plus an interest on the insufficient and/or late overtime payment calculated at the highest interest rate of demand deposits of the commercial banks announced at the time of imposing penalties on the offense.
[1]Article 96 Labor Code and Article 24.1 Decree 05/2015/NĐ-CP dated 12/01/2015
[2]Article 24.2 Decree 05/2015/NĐ-CP dated 12/01/2015
[3]Article 94.2 Labor Code
[4]Article 25 Circular 111/2013/TT-BTC dated 15/08/2013
[5]Articles 13.3 and 13.7 Decree 95/2013/NĐ-CP dated 22/08/2013 as amended and supplemented by Decree 88/2015/NĐ-CP dated 07/10/2015