If enterprises do not pay wages, what do employees need to do?

Nowadays, the fact that enterprises pay wages to employees late still occurs quite commonly, especially in the end of the year when enterprises have to settle tax finalization and other financial obligations. This makes a big effect on employees’ life as they have to prepare for new year and their family but they are not paid wages. However, is late payment of wages legal? Are enterprises sanctioned for administrative violations of paying wages late? In case employees are paid wages late, what can they do? To protect legal rights of yourself as well as employees in general, this article will answer the above legal questions.

Pursuant to Article 96 of the Labor Code 2012 stipulating the principle of payment of wages, employees is paid directly, fully and in a timely manner. In special case the wages may not be paid in a timely manner, it must not be later than 01 month and the employer must pay employees an addition amount at least equal to the deposit interest rates by the State Bank of Vietnam announced at the time of payment.

Thus, the late payment of enterprises and failure to pay wages to employees is a violation of the Article 96 above. In addition, special cases the wages may not be paid in a timely manner which are prescribed in Clause 2 Article 24 of Decree 05/2015/ND-CP include natural disasters, fires or other force majeure reasons that employer have sought all the remedies but could not pay wages on time. Except from the above reasons, employers must pay wages to employees in a timely manner as in the labor contract.

Pursuant to Point a Clause 3 and Point a Clause 7 Article 13 of Decree 88/2015/ND-CP, the act of not paying wages on time will be subjected to a fine which is valued from VND 5,000,000 to VND 10,000,000 if enterprises do not pay wages to 1 to 10 employees and depending on the seriousness of the violation, the fine may be up to maximum of VND 50,000,000.

Besides the main sanctioning form of fine, enterprises are forced to pay full wages plus the interest on the late payment or underpayment of wages to employees based on the highest rate of the demand deposit interest which the state-owned commercial banks announced at the time of sanctioning for the above violation.

Pursuant to Clause 1 Article 15, Article 20 and Article 23 of Decree 24/2018/ND-CP, in case employees are not paid wages on time, they can execute following steps:

• Step 1: Submit the complaint to the enterprise that employees are working in. The employer is the competent party to settle first-time complaints of employees.

• Step 2: In case the employer does not respond to the complaint after 30 days from the date employees submit the complaint or employees disagree with the employer’s complaint settlement result, employees will send the complaint to the Chief Inspector of the Department of Labor – Invalids and Social Affairs where the employer is headquartered.

Please kindly note that these are steps of making a complaint under provisions of laws. Therefore, if employees want to resolve a labor dispute about late payment of wages in accordance with the law, they should make a complaint according to the above steps.

According to the above-mentioned provisions, it can be seen that the employers’ late payment of wages is illegal and may be subjected to administrative sanctions. At that time, employers not only have to pay employees full wages but also pay an addition interest due to late payment and are fined from VND 5,000,000 to VND 50,000,000. Thus, enterprises should comply with the provisions of laws and pay full and timely wages to employees.

Above are the provisions of the law on late payment of wages as well as legal actions that employees may take when they are delayed in paying wages. In case you have any legal issues regarding labor disputes, please provide us with your information and issue.

Best regards.