Headlines 27/11/2020 17:36 CH

5 new policies regarding wages and salaries of workers and employees to take effect on January 1, 2021

Kim Huệ

From January 1, 2021, a lot of new policies regarding wages and salaries of workers and employees will come in use as follows:

(1) Regarding region-specific minimum pay rates

- Minimum pay rates are determined by regions and fixed per month or hour.

- There is none of the definition “Sector-specific minimum pay rates”.

- More legal bases for adjustments in minimum pay rates are added.

For more details, see 03 new regulations of minimum pay rates in effect from January 1, 2021

(2) Regarding authorization given by workers or employees to act on their behalf to receive wages and salaries

Clause 1 of Article 94 in the 2019 Labor Code prescribes that workers and employees may entrust other persons to receive their wages and salaries if they are unable to receive their wages and salaries directly (none of such regulation set forth in the 2012 Labor Code).

However, below are two factors that may allow or disallow the authorized persons to receive wages or salaries on behalf of workers and employees:

- Such authorization must ensure legitimacy;

- Employers agree to such authorization, which is regulated under the Law that employers “may or may not” pay authorized persons.

(3) Regarding principles of payment of wages and salaries to workers and employees

**Additional regulations on don’ts or prohibited acts for employers:

- Restricting or interfere in workers or employees' rights to dispose of their own wages and salaries;

- Coercing workers and employees to spend their wages and salaries to buy goods or services of employers or other units chosen by employers.

 (According to clause 2 of Article 94 in the 2019 Labor Code)

**In each payment of wage or salary, the employee is entitled to a pay statement, which clarifies the amount of wage or salary, overtime pay, night work pay, pay description and the amount to be withheld (if any). This is the new regulation set forth in clause 3 of Article 95 in the 2019 Labor Code, which is not included in the 2012 Labor Code.

“In fact, when receiving wages and salaries, most workers and employees do not know what types of deductions, how much money withheld as their tax payments or SI contributions, etc. The new Law makes it clear, helping them get a better understanding of their own wages and salaries and assuring their legitimate rights and interests”, said Mr. Bui Tuong Vu, Lawyer and Director at THU VIEN PHAP LUAT.  

**Workers and employees will be entitled to a compensation that is worth at least the interest on the amount paid behind schedule at the latest 1-month interest rate quoted by the bank at which the employee’s salary account is opened by the employer if a salary is paid at least 15 days behind schedule, as prescribed in clause 4 of Article 97 in the 2019 Labor Code.

(Currently, according to Article 96 in the 2012 Labor Code, the compensation amount is charged at the ceiling interest rate for 1-month deposits quoted by the State Bank of Vietnam and remaining effective at the payment date; if the State Bank of Vietnam does not regulate the ceiling interest rate, such compensation amount will be charged at the interest rate for 1-month deposits quoted by the commercial bank where the paying entity or company opens accounts at the paying date).

**Workers and employees will not liable for account opening fees if wages and salaries are paid via banks (currently, according to clause 2 of Article 94 in the 2012 Labor Code, both parties can seek to reach an agreement on this issue).

(4) Regarding rights that workers and employees can exercise in case of late payment of their wages and salaries

Employees can leave without prior notice in case of late payment of wages and salaries.

In particular, according to point b of clause 2 of Article 35 in the 2019 Labor Code, workers and employees may unilaterally terminate labor or employment contracts without prior notice to employers if they are not paid wages and salaries in full or by agreed due dates, except the case prescribed in clause 4 of Article 97 in the 2019 Labor Code (currently, point a of clause 2 of Article 37 in the 2012 Labor Code prescribes that the prior notice must be sent 3 days before leaving from work).

(5) Regarding workers and employees’ entitlement to the fully-paid leave taken due to their personal causes

Under the provisions of Article 115 in the 2019 Labor Code, workers and employees are entitled to the fully-paid leave due to personal causes and have to inform employers in the following cases:

- Marriage: 3 days off;

- Marriage of natural or adopted child: 1 day off;

- Death of the natural or adoptive parent; natural or adoptive parent of the worker or employee’s spouse; the spouse; the natural or adopted child: 3 days off.

This means that, in comparison to current regulations laid down in Article 116 of the 2012 Labor Code, from 2021 onwards, if the adoptive parent; the adoptive parent of the worker or employee’s spouse dies, the worker or employee will be entitled to 3 fully-paid days off.

Concurrently, clearer regulations prescribe that, if the natural or adopted child of the worker or employee gets married, they will have 01 day off (current regulations prescribe that, if the child of the worker or employee gets married, they will have 1 day off); if the natural or adopted child of the worker or employee dies, they will have 03 days off (current regulations prescribe that, if the child of the worker or employee dies, they will have 3 days off).

Legal bases:

- The 2012 Civil Code.

- The 2019 Labor Code (in force on January 1, 2021).

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