According to the applicable law, the company is only allowed to deduct the employees’ salaries in certain cases. If the deduction is in contravention of the law, it will be administratively sanctioned according to regulations. So what are those cases? What is the penalty if the company deducts salary illegally?
To find out the answer, PL & Partners would like to invite readers to take a look at the article below.
1. IN WHAT CASES CAN THE COMPANY DEDUCT EMPLOYEES’ SALARIES?
Pursuant to Articles 102 and 129 of the 2019 Labor Code, the company is only allowed to deduct the employees’ salaries in the following cases:
Case 1: The employee damages equipment, tools, or has other acts that create property damage.
Note: In case the employee, due to negligence, causes minor property damage having a value not exceeding 10 months of the regional minimum wage announced by the Government applicable at the employee’s workplace, the employer shall receive a maximum of 03 month’s salary compensation and the deduction shall be made monthly pursuant to Article 102.3 of the 2019 Labor Code.
The monthly deduction must not exceed 30% of the employee’s actual monthly salary after all the compulsory social insurance, health insurance, unemployment insurance, and personal income tax are deducted.
Case 2: The employee loses tools, equipment, property of the employer or other property handed over by the employer.
Case 3: The employee consumes materials in excess of the allowed norm.
Note: Employees are not required to compensate in case of natural disasters, fires, enemy sabotage, dangerous epidemics, disasters, objective events that cannot be foreseen and cannot be remedied even though they have taken all necessary and permissible measures.
2. PENALTIES FOR ILLEGAL SALARY DEDUCTIONS.
Except for the above-mentioned cases of allowable salary deduction, the company that illegally deducts employees’ salaries may be administratively sanctioned with a fine ranging from VND40,000,000 to VND80,000,000 concurrently with returning the collected money or paying full salaries to the employees (pursuant to Decree 12/2022/ND-CP).
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The article is based on the current legal regulations at the time of writing, and it may no longer be valid or relevant at the time you are reading it due to changes of the law. The article, therefore, is seen as reference only.