Understanding Vietnam’s Labor Law: Wage Increases, Salary Structures, and Payment Methods
According to Clause 1, Article 90 of the 2019 Labor Code, wages are defined as the amount paid by the employer to the employee based on their agreement for performing a job. This includes the salary level for a particular job or position, as well as any allowances and supplementary payments.
Annual wage increases for employees depend on the agreement between the parties and the company’s regulations.
Additionally, Clause 6, Article 3 of Circular No. 10/2020/TT-BLDTBXH states that the regime for salary increases is based on the agreement between the two parties regarding conditions, timing, and post-increase salary levels, or as stipulated in the collective labor agreement and the employer’s regulations.
Hence, annual wage increases for employees are subject to mutual agreement and company policies. There is no mandatory requirement for companies to provide annual wage increases.
Developing Salary Structures – As Per Vietnam’s Labor Law
Clause 1 and Clause 3 of Article 93 of the 2019 Labor Code outline the following requirements for developing salary structures:
- Employers must establish salary scales, salary tables, and labor norms as a basis for recruiting, employing, and agreeing on salaries for jobs or positions in labor contracts.
- Employers must consult with the representative organization of employees at the establishment when developing salary scales, salary tables, and labor norms.
- Salary scales, salary tables, and labor norms must be publicly announced at the workplace before implementation.
In summary, companies are required to establish salary scales and salary tables.
Principles of Wage Payment as Per Article 94 of the Labor Code
- Employers must pay wages directly, fully, and promptly to employees. In cases where an employee cannot receive their wages directly, the employer may pay the legally authorized representative of the employee.
- Employers must not restrict or interfere with the employee’s right to decide how to spend their wages. Employers must not coerce employees to spend their wages on purchasing goods or using the services of the employer or any other unit designated by the employer.
Forms of Wage Payment – As Per the 2019 Labor Code
- Employers and employees agree on the form of wage payment, which can be based on time, products, or contracts.
- Wages can be paid in cash or through the employee’s personal bank account. If wages are paid through a personal bank account, the employer must cover any fees related to account opening and wage transfers.
- The Government provides detailed guidance on this matter.
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Counterfeit Documents: A Web of Devastating Consequences
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The Latest on Unemployment Insurance
The proposed Employment Law (amended) is designed to enhance accessibility for businesses and citizens to avail themselves of unemployment insurance benefits. It also aims to provide training and skill enhancement programs to improve overall employability and empower individuals to achieve greater career success.
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