Question 85. May the Employer deduct the Employee’s salary on the grounds of being late for work?


Pursuant to the Labour Code[1], the Employer is prohibited from applying the form of monetary fines, salary cuts instead of taking LD action in accordance with the ILR of the enterprise. Accordingly, the deduction of salary due to going to work late is a violation of the Labour Code. In order to appropriately handle this case, the Employer may stipulate this act of misconduct in the ILR in order to handle LD against the perpetrator in the form of reprimand. For example, the ILR stipulates that: “If you go to work late more than 3 times a week (more than 15 minutes per time), you will be subject to the discipline in the form of a written reprimand”, etc.

In fact, the Employer in some cases still does not pay full salary to late-arriving Employee on the grounds that late time is a period of inactivity, and the Employer is not obliged to pay the Employee for such period. The Employee’ late arrival will be determined by the Employer through an automatic time attendance system which records the arrival and departure time of any Employee. Accordingly, the number of minutes of late work each day will be accumulated in a month to calculate the number of hours the Employee does not work. The Employee is paid only for the remaining working hours in that month after deducting the number of late hours in the said month.

However, the said arguments will be considered inconsistent with the Labour Code. Particularly, the prevailing forms of salary payment for the Employee include the forms of salary paid by reference to time or products produced or completed pieces of work. In particular, the form of salary by reference to time will include the monthly, weekly, or hourly salary[2], excluding salary per minute or smaller units of time. The Employee who is paid hourly, daily or weekly will be paid after hours, days or weeks of work, or will be paid in lump-sum as agreed upon by the two parties, but the payments must not be made of more than 15 days in sum[3]. Thus, accumulating the number of late minutes of the Employee each day in a month to calculate the number of non-working hours as a basis for paying monthly salary is not in accordance with the Labour Code. In the same manner, the Employer, whose payment methods do not refer to working hours, shall not pay the Employee on hourly basis even though the Employee is late for hours.

Where the Employer further deducts salary due to the Employee’s late arrival instead of taking legal action, the Employer may be subject to legal risk if the Employee complains or initiates a lawsuit at a local labour management State agency or a competent Court. Besides, the Employer will also be subjected to an administrative fine from VND20,000,000 to VND30,000,000[4].

[1] Article 127.2 of the Labour Code.

[2] Article 96 of the Labour Code and Article 145/2020/ND-CP of the Government dated 14/12/2020.

[3] Article 97 of the Labour Code

[4] Article 18.3 (b) of the Decree 28/2020/ND-CP dated 01/03/2020.