Wage and time-based salary payment is an agreement between the employee and the employer regarding paid employment, working conditions, rights, and obligations of both parties when entering into and executing a labor relationship. Wage calculation can be done on an hourly, daily, weekly, or monthly basis depending on the agreement between the parties and must be clearly stated in the labor contract.
This article provides some information regarding wages and time-based salary payment under legal regulations. It is intended for reference only and the information may change depending on updates in legal provisions.
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What Is Time-Based Salary?
Time-based salary refers to the amount of money that an employee receives based on an agreement established between the employee and the employer. This salary or wage is paid based on the job title and duties assigned as agreed in the labor contract.
Wages can be paid at a fixed interval as agreed between the employee and the employer.
- For employees paid by hour, day, or week, wages are paid after the hour/day/week worked or may be paid in lump sums, but no longer than 15 days between payments, as agreed upon by both parties.
- For employees paid monthly, wages may be paid once per month or twice a month. The payment time is mutually agreed upon and must be on a periodic basis.
Employees paid by product or under a task-based contract are paid according to the agreement between both parties. If the work takes multiple months, wages must be advanced monthly based on the amount of work completed during that month.
Legal Definition of Wages
Wages are the amount of money the employer pays the employee under agreement for performing work. This includes the salary based on the job or position, allowances, and other additional payments.
However, the agreed wage must not be lower than the minimum wage, and agreements that are contrary to legal provisions are not permitted.
The minimum wage is the lowest amount paid to employees performing the simplest tasks under normal working conditions, ensuring a minimum standard of living for employees and their families. The minimum wage is set by the Government.
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Advantages and Disadvantages of Time-Based Salary Payment
Advantages of time-based salary payment include its simplicity, ease of calculation, and ease of implementation.
However, there are opinions that wages may not always reflect the actual contribution of employees. If this issue arises in your business, it is advisable to establish a suitable salary and bonus system that motivates employees appropriately.
Methods of Time-Based Salary Payment
The method of time-based salary payment must comply with Article 96 of the 2019 Labor Code and Article 54 of Decree No. 145/2020/NĐ-CP. Therefore, the wage payment method must be clearly and specifically regulated.
Wages can be calculated based on actual working hours and may include bonuses depending on company policy.
In principle, wage payment can be made either directly or indirectly, but it must be timely and fully paid to the employee.
