Punishing businesses for late salary payment: Ensuring rights for employees

(Baonghean) - According to Decree 05/ND-CP of the Government, enterprises that delay salary payment for more than 15 days will have to pay additional interest and be fined. This regulation has received high consensus from employees and state management agencies in ensuring legitimate rights for employees.

“An employer who pays wages 15 days or more late must pay an additional amount at least equal to the late payment amount multiplied by the ceiling interest rate for 1-month term deposits announced by the State Bank at the time of wage payment. In special cases due to natural disasters, fires or other force majeure reasons, where the employer has taken all measures to remedy the situation but is unable to pay wages on time as agreed in the labor contract, the delay must not exceed 1 month…” That is the notable content of Decree 05/ND-CP of the Government, which took effect on March 1, 2015. After its promulgation, the Decree received many positive comments from workers. Ms. Le Thi Hoa (from Hung Nguyen) who is working as a worker for Matrix Company Limited (Bac Vinh Industrial Park) said: “I read this information in the press and felt very happy. If that is the case, the company will be responsible for paying workers like us on time to cover rent, accommodation and daily living expenses…”.

Workers in the construction materials industry are often paid late. Photo: Quynh Lan

Sharing about this issue, Mr. Dang Cao Thang, Deputy Director of the Department of Labor, Invalids and Social Affairs, said that this is a correct regulation to make enterprises strictly implement the Labor Law and ensure full rights for employees. Mr. Thang also emphasized that: “During the implementation process, some enterprises will encounter difficulties. With the responsibility as a State management agency, the Department shares those difficulties. However, according to the regulations, units and enterprises must comply with the law, otherwise they will be punished”. Highly agreeing with the Government's policy, Mr. Nguyen Chi Cong, Head of the Policy and Law Department, Provincial Labor Federation said: "Monthly salary plays an important role for employees, if the salary is paid late, it will make their lives difficult. Decree 05 was issued to clearly stipulate administrative sanctions for enterprises and to require interest payment to workers in case of late salary, which is correct. In addition, Decree 05 is also the basis for trade union organizations to inspect and supervise the implementation of legal policies and regimes of enterprises, helping employees to clearly sign labor contracts with enterprises, protecting the legitimate rights of employees and minimizing labor disputes if they occur."

According to many businesses, imposing fines to ensure that businesses pay wages on time is necessary to ensure the harmony of interests of both parties. However, there are still some businesses that are concerned. Mr. Nguyen Duc Phong, Director of Duc Phong Company Limited, said: “No business has a policy of owing wages or paying wages late to employees. Because taking care of employees is also a long-term investment for businesses to stabilize production. However, for many reasons, businesses, especially small businesses with limited capital, sometimes pay wages on time to employees. If such fines are imposed, it will cause difficulties for businesses…”. Mr. Le Van Tan, a business owner in the construction industry, said: “With the characteristics of businesses in the construction industry, paying salaries to employees quarterly or in installments, all have to be agreed upon with the employees. In particular, many projects have state budget capital but have not been paid, so where will the source of salary for employees come from? Therefore, with the new regulations, we will encounter certain difficulties.”

In fact, in the province, in recent years, there have been a number of enterprises with unpaid wages and late payment of wages to employees. Specifically, in August 2014, the inspection team of the Department of Labor, Invalids and Social Affairs conducted inspections at 12 enterprises. As a result, many enterprises owed wages to employees for 5-6 consecutive months, some companies only paid wages to employees until February 2014 such as: Nghe An Irrigation Company 3, Irrigation Construction Company 24, Nghe An Bridge and Road Construction Joint Stock Company, Truong Son Automobile Company, Anh Son Petroleum Construction Company. According to Ms. Hoang Thi Huong, Chief Inspector of the Department of Labor, Invalids and Social Affairs, "The reason why businesses owe wages and pay wages late is due to the impact of the economic recession. Some companies are operating at a loss, operating inefficiently, and are unable to collect debts from customers. For businesses in the construction sector, some projects have been handed over but investors, including investors who are state agencies, are slow to pay, leading to businesses operating at a standstill and facing financial difficulties, so it is understandable that they owe wages."

Workers at MLB Tenergy Co., Ltd.

Although there are sanctions, up to now, the State agency has not yet sanctioned any enterprise for unpaid wages or late payment of wages to employees. Ms. Hoang Thi Huong added that due to the limited human resources, the inspection and sanctioning of enterprises that owe wages or are late in paying wages are still limited. “Currently, the whole province has 11,000 enterprises, of which about 7,000 are operating. Meanwhile, the Inspection Department of the Department of Labor, Invalids and Social Affairs has only 7 officers but has to manage 9 different areas. Therefore, it is extremely difficult to inspect and supervise the implementation of enterprises. The new Decree guiding the implementation of the wage regime in the Labor Code also clearly stipulates that when there is a delay in wages, employees have the right to express opinions, complaints and denunciations. In particular, employees have the right to authorize the trade union, so that the grassroots trade union can demand benefits for employees. However, employees are mostly silent or sometimes share with enterprises. As for the grassroots trade union, it is not really connected with employees, so demanding benefits for employees is very difficult.

Decree 05 has been issued to continue to affirm the State's concern for workers. However, with many shortcomings in practice, it is necessary to propose specific measures to apply the provisions of the decree to protect workers' rights. First of all, the Department of Labor, Invalids and Social Affairs needs to promote propaganda, guidance, direction, and implementation of specific regulations to units, businesses and workers. Coordinate with relevant sectors to strengthen supervision, inspection, and examination of the implementation of the Labor Law, in which it is necessary to strictly handle enterprises that have not paid wages to workers according to regulations. Trade unions at all levels need to clearly demonstrate their responsibility in protecting and guiding workers to exercise their legitimate rights. On the part of enterprises, it is necessary to fully comply with the provisions of the law, regularly organize dialogues to listen to the aspirations of workers so that they can work with peace of mind, devote their strength and intelligence to improve production efficiency. For workers, it is necessary to raise awareness of the law. When they realize their rights are being violated, they need to speak up to the authorities to have timely protection and intervention measures.

Pham Bang