Labor union funds are used to protect the rights and take care of the lives of employees at the enterprise
Legal grounds:
- Decree No. 191/2013/ND-CP;
- Decision No. 270/QD-TLD of the General Confederation of Labor dated 7/3/2014.
We get the following questions:
I just started a company with only 12 employees, so my company didn’t form labor union. My previous company has nearly 50 workers, so it has labor union and has to pay the union fund of 2% of the total salary and get 75% back to use. I want to ask if this new company does not have labor union, do I have to pay labor union fund and if I have to, can I get 75% back?
Normally, the part of the labor union fund paid by the enterprise and then re-granted will be used to protect the rights and take care of the workers’ lives at the enterprise. If an enterprise has not yet established a labor union, it still has to pay labor union fund, which cannot be re-granted.
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Obligation to pay labor union fund at enterprises that do not have a grassroots labor union
Regarding labor union, enterprises need to distinguish two items as follows:
- Labor union fund: Paid by the enterprise regardless of whether the enterprise has established a grassroots labor union or not.
- Labor union member’s fee: Paid by labor union members. If the enterprise does not have a grassroots labor union, the employees are not required to pay labor union member’s fee. Therefore, the enterprise does not collect or pay this amount.
Specifically, based on Clause 4, Article 4 of Decree No. 191/2013/ND-CP as follows:
Article 4. Subjects of paying labor union fund
Subjects of paying labor union fund as prescribed in Clause 2, Article 26 of the Law of Labor union are agencies, organizations and enterprises, regardless of whether such agencies, organizations or enterprises have or have not had a grassroots labor union, including:
4. Enterprises of all economic sectors established and operating under the Law on Enterprises and the Law on Investment.
According to the above provisions: enterprises still have to pay labor union fund even though they have not yet established a grassroots labor union.
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Ratio of distribution of labor union funds to grassroots labor union
Pursuant to Article 5 of Decree No. 191/2013/ND-CP, the payment of labor union fund is 2% of the salary fund as the basis for paying social insurance for employees.
Pursuant to Article 6 of Decision No. 270/QD-TLD dated March 7, 2014 as follows:
Article 6. Distribution of financial receiving to grassroots labor union
1- The grassroots labor union is entitled to use 65% of the total collection of labor union fund, 60% of the total collection of labor union member’s fee and 100% of the total other receiving.
2- Submit funding to the upper-level labor union of the grassroots labor union that is decentralized to collect labor union funds.
The grassroots labor union is decentralized to collect labor union funds which must be remitted to the upper-level labor union which is decentralized to manage the grassroots labor union’s finances 35% of total labor union fund and 40% of total labor union member’s fee. In the year, according to the estimate, when there is a final settlement, pay according to the finalized receiving.
3- Granting labor union funding to grassroots labor union is not decentralized to collect labor union fund.
The upper-level labor union, which is decentralized to collect labor union fund, when receiving the labor union fund from the agency, organization or enterprise paying for it, is responsible for allocating 65% of the total collected labor union fund to the grassroots labor union (the grant is balanced with 40% of the total amount of labor union member’s fee at the grassroots level, which must be paid to the upper-level labor union).
4- For agencies, organizations and enterprises that have not yet established a grass-roots labor union: The upper-level labor union is authorized to collect labor union fund when it receives the funding from the agency, organization or enterprise, have the right use 65% of the total fund to spend on propaganda activities, developing labor union members, establishing grassroots labor unions, signing collective labor agreements, protecting and taking care of employees at these units. At the end of the year, the remaining funds converted into accumulation and returned to the grassroots labor union after the grassroots labor union is established.
According to the above provision, after the enterprise has paid the labor union fund, the funds will be distributed according to the following proportions:
In case the enterprise has established a grassroots labor union:
- 65% of funding: Grassroots labor unions are used;
- 35% of funding: Used by the upper-level labor union.
In case the enterprise does not have a grassroots labor union:
- 65% of funding: The upper-level labor union is used to propagate and protect employees at the enterprise, etc. If they are not used up, they will be accumulated and will be returned to the grassroots labor union when the enterprise establishes the grassroots labor union;
- 35% of funding: The upper-level labor union uses the same as the case having grassroots trade unions.
