Legal Knowledge

Trade Union Finance: Revenue Sources and the 2% Contribution

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Quick answer: From 01/7/2025, trade union finance is governed by the Trade Union Law 2024 (No. 50/2024/QH15). Sources of finance include: union dues; trade union funds contributed by employers at 2% of the salary fund used as the basis for compulsory social insurance contributions; State budget support; and other revenue. Employers are responsible for contributing trade union funds as prescribed by the Law (Clause 9, Article 25); late contribution or underpayment may be subject to administrative sanctions.

1. Sources of trade union finance (Article 29, Trade Union Law 2024)

Under Clause 1, Article 29 of the Trade Union Law 2024, sources of trade union finance include:

  • Union dues contributed by union members under the Charter of the Vietnam Trade Union;
  • Trade union funds contributed by agencies, organizations, units, enterprises, cooperatives and cooperative unions at 2% of the salary fund used as the basis for compulsory social insurance contributions for employees;
  • State budget support;
  • Other revenue from cultural and sports activities and economic activities of the Trade Union; from schemes and projects assigned by the State; and from lawful aid and sponsorship by domestic and foreign organizations and individuals as prescribed by law.

The Government prescribes the methods, time limits and contribution sources for trade union funds; cases of non-contribution or late contribution of trade union funds (Clause 2, Article 29).

2. Exemption, reduction and suspension of trade union fund contributions (Article 30)

  • Enterprises, cooperatives and cooperative unions undergoing dissolution or bankruptcy may be considered for exemption of unpaid trade union funds;
  • Those facing difficulties due to economic reasons or force majeure may be considered for reduced contribution rates;
  • Those facing difficulties requiring suspension of production and business, resulting in inability to contribute, may be considered for suspension of contributions for a period not exceeding 12 months; after expiry, the suspended amount must be made up no later than the last day of the month following the month in which the suspension ends.

3. Management, use and disclosure of trade union finance

The management and use of trade union finance must ensure the principles of centralization, openness, transparency, thrift and efficiency, with clear assignment and decentralization of management (Article 31). Trade union finance is used for: representing and protecting the lawful rights and interests of union members and employees; legal education and dissemination; visits and allowances for sickness, maternity, hardship and accidents; developing union membership; training union officials; organizing cultural, sports and tourism activities; rewards; investing in social housing for union members to rent; administrative management expenses, and others.

Trade unions at all levels disclose their finances annually (Article 34) and are subject to inspection and audit: every two years the State Audit Office audits the management and use of trade union finance and reports to the National Assembly (Article 33).

4. Responsibilities of employers toward the Trade Union

Under Article 25 of the Trade Union Law 2024, employers are responsible for:

  • Acknowledging, respecting, facilitating and not obstructing or causing difficulties when employees carry out lawful activities to establish, join and operate trade unions;
  • Coordinating with the Trade Union in performing the functions, rights, responsibilities and obligations of the parties; developing, promulgating and implementing coordination regulations;
  • Exchanging and providing complete, accurate and timely information relating to the organization and activities when requested by the Trade Union;
  • Coordinating in organizing dialogue, collective bargaining and concluding collective labor agreements; consulting the Trade Union before deciding matters relating to employees’ rights and obligations;
  • Ensuring conditions for trade union operations, union officials, and contributing trade union funds as prescribed by the Law (Clause 9, Article 25).

Note: acts of non-contribution, late contribution, underpayment of trade union funds, or improper management and use of trade union funds may be subject to administrative sanctions under the law on labor-sector sanctions; where damage is caused, compensation must be paid as prescribed by law (Article 36).

Notes on applying current legal provisions

This article belongs to the Labor Law knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing a dossier or conducting a transaction. Legal provisions may change over time and vary by locality, dossier type and specific circumstances. Where you need to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

  • Still citing the Trade Union Law 2012 and Decree 191/2013/ND-CP when the Trade Union Law 2024 has been effective since 01/7/2025.
  • Enterprises failing to contribute or late in contributing the 2% trade union funds without knowing they may be sanctioned.
  • Confusing union dues (contributed by members) with trade union funds (contributed by employers).
  • Not knowing the exemption, reduction and suspension rules for trade union fund contributions when enterprises face difficulties, dissolution or bankruptcy.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying applicable legal bases, advising on solutions and representing clients in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

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