Minimum Wage
In accordance with section 91 of the Labour Code 2019, workers' salary must at least be equal to the minimum wage, i.e., a wage which will ensure the minimum living needs of the employees and their families and which is based on the local social & economic conditions as well as the normal wage in the labour market.
Minimum wage is adjusted based on various factors, such as minimum living standards of workers and their families; the relationship between statutory minimum wages and usual salaries in the labour market; the consumer price index and economic growth rate; labour supply and demand; employment and unemployment; labour productivity, and the financial capacity of enterprises.
In accordance with the Labour Code 2019, the Government shall announce the regional minimum wage on the basis of the recommendations of the National Wages Council. The National Wages Council is a tripartite body with representation from the Government, employers and workers. The minimum wage rate is determined on an hourly, daily, and monthly basis for different sectors and regions.
The region-based minimum wage levels are applicable to the labourers working under labour contract for companies, enterprises, cooperatives, cooperative groups, farms, households, individuals, agencies, and organisations employing labourers. Wages may be determined by agreement between the workers and the employer (employment contract) as well as through a collective bargaining agreement; however, these cannot be lower than the government-announced minimum wage levels.
The monthly wage paid to an employee who performs the simplest work (unskilled worker) under normal working conditions must not be lower than the regional minimum wage. Enterprises coming under regional minimum wages are required to develop a pay scale, payroll and labour productivity norms for employees. These labour rates shall be equal to an average value that is earned by most of the workers without having to extend their standard working hours, and must be experimented with before being introduced and implemented officially. Employers are required to consult with the relevant representative organisation (if any). These parameters are used as a basis for recruitment and employment, wage negotiation and wage payment. Employers are required to make these wage scales publicly available at the workplace before implementation.
Employers may agree with probationary workers to pay a probationary salary equal to at least 85% of the normal wage. If an apprentice (during apprenticeship or vocational training) directly or indirectly produces products for sale, wages must be agreed upon between the parties (apprentice and the enterprise). Temporary workers are entitled to the same wage as other workers, plus any additional benefits.
Compliance with the provisions of the Labour Code, including minimum wages, is the responsibility of the MOLISA (Ministry of Labour, Invalids and Social Affairs) Inspectorate.
According to Clause 1 Article 6 and Clause 3 Article 17 of Decree 12/2022/NĐ-CP, monetary fines are imposed on employers who pay employees less than the minimum wage at the following levels:
- From 20 million VND to 30 million VND for violations involving 1 to 10 employees.
- From 30 million VND to 50 million VND for violations involving 11 to 50 employees.
- From 50 million VND to 75 million VND for violations involving 51 or more employees.
The above fines apply to employers who are individuals; if the employer is an organization, the fine will be doubled.
At the same time, according to Point a, Clause 5, Article 17 of Decree 12/2022/NĐ-CP, the employer is required to pay the full wages owed to the employee, along with interest on the underpaid amount. This interest is calculated based on the highest non-term deposit interest rate announced by state-owned commercial banks at the time of the penalty for the violation
Other than this, the Decree allows suspension of enterprise operations for one to three months for payment of wages lower than the minimum wage rate declared by the government.
Sources: §26, 61, 91-93, 212(5) of Labour Code 2019, applicable from 01 January 2021; §49-53 of the Decree No. 145/2020/ND-CP
For updated minimum wage rates, please refer to the section on minimum wage.
Regular Pay
An employer may make the payment of wages by time (hourly, daily, or on a monthly basis), piecework or completion of a task. The salary should be in VND, unless the worker is a foreigner working in Vietnam. The employer shall provide the worker with a note specifying the salary, overtime pay, nightshift pay and deductions (if any), every time the salary is paid. The employer and employee must reach an agreement on whether the salary is time-based, product-based (piece rate) or a fixed amount. Salary must be paid in cash or transferred to the employee’s personal bank account. In case of a bank transfer, the employer must pay the costs of account opening and transfer.
Wages may be paid in cash or directly into an employee's individual bank account. The employees must be paid wages directly, fully and in a timely manner (as agreed in the employment contract). In case the wages are not paid in a timely manner, it must not be later than 01 month (from its due date) in case of force majeure. If the delay exceeds 15 days, the employer must pay the employee an additional amount that is equal to the arrears of salary multiplied by the ceiling of the one-month deposit interest rate announced by the State Bank of Vietnam at the time of payment.
In accordance with the provisions of Labour Code, an employer is under the obligation to pay workers the wages: at least once in 15 days to the employee whose salary is determined on hourly, daily or weekly basis; at least once a month or once a fortnight to the employee whose salary is determined on monthly basis; and as agreed upon between the parties, for the employees whose salaries are determined on the basis of product (completion of a task) and piecework. If the work has to be done in many months, the monthly salary shall be advanced based on the volume of work done during the month.
The employer is only entitled to deduct the salary of the employee for the compensation of damages to tools and equipment to the extent only as provided under the Labour Code. Employees must be informed of the reasons for salary deductions; however, the monthly deduction cannot exceed 30% of the employee's monthly salary after payment of compulsory social insurance, health insurance, unemployment insurance, and income tax.
There is no legal requirement to pay 13th or 14th-month salary. If the company policy, collective agreement, or employment contract provides a 13th-month bonus, it becomes contractually binding, and failure to pay may constitute a breach of contract. The Labour Code leaves the bonus scheme entirely to the employer’s internal regulations after consulting the employee representative organisation, if any.
Sources: §94-97, 102 & 104 of the Labour Code, 2019; Clause 1 Article 6 and Clause 3 Article 17 of Decree 12/2022/NĐ-CP
