04 SALARY ISSUES DURING COVID19 TIME THAT BUSINESSES NEED TO KNOW

The Covid-19 pandemic has caused unprecedented heavy impacts on the world economy and society. Until now, new variants of Covid-19 continue to appear, and their effects are still very heavy, especially on businesses.

In the face of complicated developments and negative impacts of the Covid pandemic, businesses have to struggle to maintain business operations. Some unsustainable businesses had to be dissolved, the rest had to face two choices to continue to exist: Cutting staff or cutting wages.

When choosing to keep the workforce, the next question for businesses is how is it legal to cut wages during the Covid-19 period?

Faro Vietnam would like to share 4 salary issues during Covid-19 time that businesses need to know to ensure their rights and obligations as well as avoid legal risks:

1. Are businesses allowed to reduce the salary of employees when employees work from home (WFH) due to the Covid-19 situation?

In the face of the current complicated epidemic situation, in order to be able to implement drastic, serious and thorough epidemic prevention solutions, many businesses are required to implement the work-from-home model (WFH) for employees. So, are businesses allowed to reduce salary when employees WFH?

According to the principle of salary payment in Clause 1, Article 94 of the Labor Code 2019, Employers must pay wages directly, in full and on time to employees.

In which, salary is the amount of money that the employer pays the employee under an agreement to perform the job, including the salary according to the job or title, salary allowances and other supplements (Clause 1, Article 90 of the Labor Code of 2019).

Therefore, if working from home but still successfully completing the assigned work, the employee must receive the agreed salary.

2. Can businesses delay paying salaries because of Covid-19?

The principle of paying wages to employees is implemented in accordance with the provisions of Article 94 of the Labor Code 2019, specifically:

Employers must pay wages directly, in full and on time to employees.

Thus, enterprises are obliged to pay wages on time to employees. In case of force majeure, the enterprise is entitled to pay salary late but not exceeding 30 days.

Note: If the salary is paid late for 15 days or more, the enterprise must compensate the employee an amount at least equal to the interest of the late payment calculated according to the interest rate on mobilizing deposits with a term of 1 month. where the enterprise opens an account to pay wages to employees announced at the time of salary payment.

3. Do businesses have the right to refuse to pay or reduce wages of employees if they cannot directly receive wages?

According to Clause 1, Article 94 of the Labor Code 2019, in case an employee cannot receive a salary directly, the enterprise can pay the salary to the person legally authorized by the employee. In addition, if the employee cannot directly receive his/her salary in cash, the enterprise may pay the salary via a bank account as prescribed in Clause 2, Article 96 of the Labor Code 2019.

4. Do employees get paid when stopping work because of social distancing, blockade, and concentrated isolation?

Pursuant to Article 99 of the Labor Code 2019, the payment of stoppage pay to employees will be made as follows:

In case the employee stops working due to concentrated isolation, social distancing, or blockade at the request of the competent authority, the salary of the employee during the time of suspension will be agreed upon according to the following provisions:

+ In case of stopping work for 14 working days or less, the agreed-upon stoppage salary is not lower than the minimum wage;

+ In case of having to stop working for more than 14 working days, the salary for stopping work shall be agreed upon by the two parties, but the salary for stopping work in the first 14 days must not be lower than the minimum wage.

 

In this difficult period, each individual employee should sympathize with his/her enterprise to share difficulties to overcome together soon. In addition, businesses or employers also need to pay attention to employees' lives, strictly comply with the law on employee salary cuts, to avoid causing psychological instability for employees.

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Contact Faro Vietnam for advice and support on human resource matters and salary issues during the Covid-19 season

📧 service.vn@farorecruitment.com

☎ + 84 24 3974 3091 (Hanoi Office) / + 84 28 3821 4654 (Ho Chi Minh Office)

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