Pecuniary Penalty, Wage Deductions – Right Or Wrong? || AS Auditing

In life, we often see business fines, and cut employee’s salaries when:

  • Employees come to work late, and leave early.
  • Employees do not wear uniforms.
  • Employees do not complete assigned work, slowing down the work progress, and similar occurrences.

From the perspective of the enterprises and the employee, if this is considered an agreement, it is acceptable, but from a sociological and juridical perspective, this is unacceptable content.

Specifically: Vietnamese Law does not allow deduction of wages or fines for employees. For what the law does not allow that we agree on, it makes no sense and violates the law.

To solve these problems, The Vietnam Labour Code 2019 mentions 3 issues that employers and employees need to pay attention to:

Content 1: According to Article 118 of the Labour Code 2019, If there are 10 or more workers, the internal work regulation must be written. The internal work regulations have the content: " Breaches of labor disciplinary regulations by workers and measures for handling labor discipline”

Content 2: According to Article 124 of the Labour Code 2019, an employer is only allowed to apply one of the following forms of labor discipline:

  • ​Reprimand.
  • Deferment of wage increases for no more than 6 months.
  • Demotion.
  • Dismissal.

Content 3: According to Article 102, Article 129 of The Labour Code 2019, an employer is allowed to deduct employee salary in 03 cases:

  1. The employee damages the equipment, and tools or commits another act that causes damage to the assets.
  2. ​A worker who loses tools, equipment, or assets of the employer or other assets assigned by the employer.
  3. A worker uses materials in excess of the permitted norms.

We all know that there are many things in the labor relationship that need further guidance because in fact, there are many problems that occur in the labor relationship that are difficult to predict. In this brief topic, the main content is that businesses are not allowed to apply fines, deduct from worker ‘s wages.

If enterprises do not understand clearly but pecuniary penalty, wage deduction, the enterprises will be the ones who will be fined.

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