Many enterprises operate under the misconception that the absence of a grassroots trade union exempts them from trade union financial obligations. However, pursuant to the Trade Union Law 2024, any enterprise employing personnel subject to compulsory Social Insurance (SI) must remit a trade union fee equivalent to 2% of the total salary fund used as the basis for compulsory SI contributions. This statutory obligation applies universally, irrespective of whether a grassroots trade union has been established within the entity.
Previously, non-compliance was often attributed to a fragmented regulatory oversight system rather than intentional evasion. With the current comprehensive digitalization and integration of SI, labor, and trade union databases, identifying non-compliant enterprises has become seamless. Furthermore, effective from May 16, 2026, Decree No. 105/2026/ND-CP introduces strict regulations regarding remittance methods, rigid deadlines, and enforcement sanctions to ensure absolute compliance with trade union financial regulations.
This article summarizes the key regulatory updates and stringent statutory timelines that enterprises must strictly observe to guarantee regulatory compliance.
I. Key Regulatory Updates and Supplemental Compliance Requirements
1. Concrete Deadlines for Trade Union Fee Remittance
Previously, statutory provisions vaguely required enterprises to remit trade union fees concurrently with SI contributions without specifying a strict cutoff date. Decree 105/2026/ND-CP (Article 4) establishes clear statutory timelines:
- Monthly Remittance Method: The absolute deadline is the last day of the subsequent calendar month.
- Agricultural, Forestry, Fishery, and Salt-Production Sectors (Cyclical Payrolls): Eligible enterprises may flexibly elect to remit fees either monthly or on a 3-month quarterly cycle upon registration with the relevant trade union authority. The deadline remains the last day of the month immediately following the registered payment cycle.
2. Legal Distinction Between “Late Remittance” and “Non-Remittance”
To provide a precise legal basis for administrative sanctions, Article 6 of Decree 105/2026/ND-CP introduces a 60-day threshold to classify the severity of violations:
- Late Remittance (Chậm đóng): Occurs when an enterprise fails to remit or remits an insufficient amount after the designated statutory deadline (i.e., after the last day of the subsequent month).
- Non-Remittance (Không đóng): Formally triggered if an enterprise completely fails to remit the fees, or fails to pay the sufficient amount relative to the total headcount/salary fund, for a consecutive period exceeding 60 days from the expiration of the payment deadline.
3. Fee Exemption Mechanism for Entities Undergoing Dissolution or Bankruptcy
Article 11 introduces a relief mechanism aimed at alleviating outstanding financial liabilities for distressed entities:
- Dissolution Proceedings: Entities may be granted an exemption from outstanding trade union fees provided that the superior Trade Union actively participates in and approves the enterprise’s debt restructuring and settlement plan.
- Bankruptcy Proceedings: Exemptions may be considered if the superior Trade Union acts as the petitioning party filing for the enterprise’s bankruptcy before the court.
4. Maximum 20% Fee Reduction for Enterprises Facing Severe Hardships
Enterprises experiencing major operational disruptions that lead to large-scale workforce downsizings may qualify for financial relief under Article 11:
- Eligibility Criteria: The entity must lay off at least 30% of its workforce after having fully exhausted the statutory period allowed for temporary suspension of contributions. Specific thresholds apply based on corporate scale:
- Relief Caps & Duration: Eligible entities are entitled to a maximum 20% reduction in their trade union fee obligations for a cumulative duration not exceeding 06 months.
5. Temporary Suspension of Remittance for up to 12 Months
In events of force majeure, enterprises may apply for a temporary deferral of their financial obligations:
- Applicable Scenarios: Severe business operational distress arising from natural disasters, epidemics, fires, crop failures, or major technological/structural adjustments resulting in a production halt of 30 consecutive days or longer.
- Personnel/Asset Criteria: At least 50% of the total employees subject to compulsory SI must be temporarily laid off, or the enterprise must sustain documented property damage exceeding 50% of its total asset value.
Compliance Note: Upon the expiration of the approved temporary suspension period, the enterprise is legally obligated to remit the full backdated arrears accumulated during the suspension.
II. Critical Compliance Advisory and Strategic Recommendations
1. Accuracy in Salary Fund Calculations and Accounting
Enterprises must meticulously calculate their monthly salary fund allocated for SI contributions to ensure the exact 2% trade union fee is deducted. Legally, this expenditure is fully deductible and must be recognized under corporate operating, manufacturing, or service expenses for the relevant fiscal period.
2. Strict Enforcement and Statutory Penalties
Any evasion, late payment, or underpayment of trade union fees will trigger administrative sanctions in accordance with Decree No. 12/2022/ND-CP:
- Late/Under-Remittance: A fine ranging from 12% to under 15% of the total outstanding amount will be imposed for late payments, miscalculated rates, or underreporting eligible employees.
- Complete Non-Remittance: A fine ranging from 18% to 20% of the total outstanding amount (capped at VND 75,000,000 for corporate entities) applies if the enterprise fails to remit fees for the entirety of its eligible workforce.
- Remedial Actions: The non-compliant entity is legally compelled to pay the full principal arrears, plus accrued interest calculated at the highest demand deposit rate published by state-owned commercial banks at the time of the sanction.
3. Claiming Benefits in the Absence of a Grassroots Union
For non-unionized enterprises, the 2% fee must be fully remitted to the immediate superior trade union district/provincial authority. However, management should proactively exercise the following rights:
- Request the superior trade union to allocate funds to support employee welfare, healthcare visits, or internal commendation/reward programs within the enterprise.
- Thoroughly master the relief mechanisms under Decree 105/2026/ND-CP to swiftly execute applications for exemptions, reductions (up to 20%), or temporary suspensions (up to 12 months) during adverse financial cycles to secure corporate cash flow.
4. Establishing a Grassroots Trade Union for Financial Optimization
To achieve optimal fiscal management, enterprises meeting the statutory requirements should facilitate the voluntary establishment of an internal grassroots trade union. This structure offers a dual financial advantage:
- For the Enterprise: Under the 2026 financial allocation guidelines, a grassroots trade union is legally entitled to retain 75% of the total 2% remitted fee directly at the source. This capital can be autonomously deployed for internal employee welfare, operational activities, and team-building events instead of being entirely absorbed by superior union authorities.
- For the Employees: Upon union membership enrollment, employees contribute a union membership fee capped at 0.5% of their SI-based salary (per the updated 2025–2026 regulatory timeline). This contribution guarantees their direct eligibility for advanced welfare initiatives, legal representation, and labor rights protection.
III. Conclusion
Compliance with the 2% trade union fee under Decree 105/2026/ND-CP is not merely a statutory obligation, but a strategic cornerstone for maintaining sustainable and legally compliant industrial relations. To mitigate legal exposure and optimize operational costs, enterprises must implement routine internal audits of their payroll records and SI contributions against the newly established statutory timelines. In instances of documented operational hardships, corporate leadership should immediately leverage the statutory deferral or reduction frameworks to legally protect corporate liquidity and safeguard institutional interests.