Forms of disciplinary actions
The main legal consequence of disciplinary liability is the imposition of disciplinary measures. According to Article 124 of the 2019 Labor Code, depending on the severity of the violation, the following forms of disciplinary actions may be applied:
– Reprimand
– Extension of salary increase period (not exceeding 6 months); demotion
– Dismissal
→ There is no form of salary deduction for disciplinary violations.
→ Employers are not allowed to deduct employees’ monthly salaries as a form of disciplinary action.
When is an employer allowed to deduct an employee’s salary?
An employer is only permitted to deduct an employee’s salary as compensation for damages caused by the employee to tools, equipment, or property, as stipulated in Article 129 of the 2019 Labor Code. This applies in cases where the employee causes minor damage due to negligence, with a total value not exceeding 10 months of the regional minimum wage.
In other cases, employees have the right to be informed of the reasons for any salary deductions.
Additionally, the labor contract may specify cases where the employee must compensate for damage caused by breaking or losing tools, equipment, or materials; or for consumption of materials beyond the permitted threshold. The level of compensation must correspond to the damage caused; the authorized person to handle the compensation process must also be clearly specified
(Point h, Clause 2, Article 69 of Decree 145/2020).
Salary deductions must not exceed 30% of the monthly salary after deductions for social insurance (SI), health insurance (HI), unemployment insurance (UI), and personal income tax (PIT).
(Legal basis: Article 102 of the 2019 Labor Code)
Consequences of unlawful salary deductions
According to Clause 2, Article 17 of Decree 12/2022/ND-CP, administrative penalties apply to employers who violate wage regulations as follows:
| Number of employees | Fine amount (VND) |
| 01 – 10 employees | 5.000.000 – 10.000.000 VND |
| 11 – 50 employees | 10.000.000 – 20.000.000 VND |
| 51 – 100 employees | 20.000.000 – 30.000.000 VND |
| 101 – 300 employees | 30.000.000 – 40.000.000 VND |
| >= 301 employees | 40.000.000 – 50.000.000 VND |
According to Clause 1, Article 6 of Decree 12/2022/ND-CP, the above fines apply to individuals. Fines for organizations are twice the amount imposed on individuals.
Remedies
The employer must fully pay the deducted salary amount along with interest on the delayed or insufficient wage. The interest is calculated based on the highest non-term savings interest rate announced by state-owned commercial banks at the time of the penalty decision.
(Legal basis: Point a, Clause 5, Article 17 of Decree 12/2022/ND-CP)
