How are businesses that pay their employees late punished?

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Reply:

1. The salary payment period is stipulated in Article 97 of the Labor Code as follows:

-WorkersEmployees who receive hourly, daily, or weekly wages will be paid after the working hour, day, or week, or will be paid in a lump sum as agreed by both parties, but no more than 15 days must be paid in a lump sum.

- Employees receiving monthly salaries are paid once a month or once every two weeks. The payment time is agreed upon by both parties and must be set at a periodic time.

- Employees who receive wages based on products or contracts are paid according to the agreement of both parties; if the work has to be done over many months, they will receive a monthly salary advance based on the amount of work done during the month.

- In case of force majeure, the employer has taken all possible measures to remedy the situation but cannot pay the salary on time, the delay must not exceed 30 days; if the salary is paid late by 15 days or more, the employer must compensate the employee with an amount at least equal to the interest on the late payment calculated at the interest rate for 1-month term deposits announced by the bank where the employer opens the salary payment account for the employee at the time of salary payment.

Businesses can be fined up to VND50 million if they are late in paying wages to their employees. Illustration photo: Diep Thanh

2. Enterprises that are late in paying wages to employees may be subject to fines of up to 50 million VND.

Clause 2, Article 17 of Decree 12/2022/ND-CP stipulates the fine level for enterprises that do not pay wages on time according to the provisions of law as follows:

- From 5 million VND to 10 million VND for violations involving 1 to 10 workers;

- From 10 million VND to 20 million VND for violations involving 11 to 50 workers;

- From 20 million VND to 30 million VND for violations involving 51 to 100 workers;

- From 30 million VND to 40 million VND for violations involving 101 to 300 workers;

- From 40 million VND to 50 million VND for violations involving 301 or more employees.

Accordingly, depending on the number of employees that the business is late in paying, the fine for late or non-payment of wages can range from a minimum of 5 million VND to a maximum of 50 million VND.

WhenbusinessIn addition to late payment of wages, employees also have the right to unilaterally terminate the contract. Failure to pay the full wage or to pay it on time is a reasonable basis for employees to exercise the right to unilaterally terminate the labor contract without prior notice.

However, unilateral termination of the contract for the above reasons shall not be applied in cases where, due to force majeure, the enterprise has taken all remedial measures but cannot pay wages on time. In this case, the employee's unilateral termination of the contract without prior notice is considered an illegal unilateral termination of the labor contract as stipulated in Article 39 of the 2019 Labor Code.