Legal basis:

– Labor Code 2019.

Labor relations are one of the most common relationships in social life. Labor relations are built on employment and payment of wages between employees and employers. The employers have to pay fully the salary for the employee which bases on the labor agreement. So, under what circumstances can the employers reduce an employee’s salary without violating the law?

Currently, there are no regulations allowing employers to unilaterally reduce employees’ salaries. The employers are only allowed to do that in the following cases:

1. Agreement to amend the salary in the labor contract

When the employers intend to reduce the employee’s salary, they must notify the employee at least 3 days in advance. If the employee agrees, the parties can proceed to adjust and reduce the employee’s salary through signing an appendix to the labor contract or a new labor contract. In case the employee does not agree, the company will not be allowed to reduce the employee’s salary.

2. Reducing wages when the employer transfers the employee to a job different from the labor contract

When an employer temporarily transfers an employee to a job different from the labor contract, the employee’s salary will also change according to the new job. However, within 30 working days from the date of changing jobs, if the salary of the new job is lower than that of the previous job, the employee is still entitled to the salary of the previous job. After this period, the employee will receive the salary of the new job, which must be at least 85% of the salary of the previous job but not lower than the minimum wage. This means the employer can decrease the amount which are not higher than 15% of the previous salary.

To summarize, when decreasing workers’ salaries, every companies need to pay attention to the mentioned cases to avoid violating the law and being subject to administrative sanctions for cutting workers’ salaries.