1. Is it Right or Wrong for Enterprises to Arbitrarily Deduct Employee Wages?
Wages for work performed are agreed upon between the employee and the employer and are clearly stipulated in the labor contract.
Currently, some enterprises in Vietnam, including leading ones, apply penalties by deducting wages for common employee errors, directly reducing their monthly salaries. Common violations leading to wage deductions include breaches of working hours (e.g., arriving late or leaving early), errors in document drafting (e.g., spelling or formatting mistakes), sending emails to incorrect recipients, missing deadlines, and similar issues.
Pursuant to the Labor Code 2019, the act of arbitrarily deducting or reducing an employee’s wages is strictly prohibited. Enterprises that arbitrarily deduct or reduce employee wages may face administrative penalties.
arbitrarily reduce or deduct wages may be subject to administrative penalties.
Enterprise deducts employee’s salary: True or false?
2. What is the Penalty for Imposing Fines or Deducting Employee Wages?
According to Clause 3, Article 19 of Decree 12/2022/NĐ-CP on administrative penalties in the fields of labor, social insurance, and Vietnamese workers working abroad under contracts, the following provisions apply:
“3. A fine ranging from VND 20,000,000 to VND 40,000,000 shall be imposed on an employer committing one of the following acts:
a) Violating the health, honor, life, reputation, or dignity of an employee when imposing disciplinary measures, except where criminal liability is pursued;
b) Using fines or wage deductions in place of labor disciplinary measures;
c) Imposing disciplinary measures on an employee for violations not stipulated in the internal labor regulations, not agreed upon in the concluded labor contract, or not provided for by labor laws;
d) Applying multiple forms of disciplinary measures for a single violation of labor discipline;
e) Imposing disciplinary measures on an employee during the following periods: sick leave; rehabilitation leave; leave with the employer’s consent; temporary detention; temporary custody; or while awaiting results from a competent authority investigating, verifying, or concluding on violations as specified in Clauses 1 and 2, Article 125 of the Labor Code.”
Thus, enterprises that arbitrarily deduct or reduce employee wages may be fined up to VND 40,000,000. Additionally, the enterprise is required to fully reimburse the employee for the deducted wage amount.
Note: The fines mentioned above apply to individuals. The fine for organizations is twice the amount imposed on individuals (Clause 1, Article 6, Decree No. 12/2022/NĐ-CP).
Thus, an employer using fines or wage deductions in place of labor disciplinary measures may be fined from VND 20,000,000 to VND 40,000,000 for individuals.
For organizations, the fine for such violations ranges from VND 40,000,000 to VND 80,000,000.
Disclaimer:
This article is intended for informational purposes only and does not constitute legal advice from HTH & Partners. The content represents the views of HTH & Partners and is subject to change without prior notice.
The legal provisions referenced in this article were valid at the time of publication but may have been amended or repealed by the time of reading. We strongly recommend consulting a qualified legal professional before applying any information contained herein.
