Circular No. 03/2002/TT-BLDTBXH guiding the implementation of Government Decree No. 28/CP dated March 28, 1997, and Government Decree No. 03/2001/NĐ-CP dated January 11, 2001 on reforming salary and income management in state-owned construction enterprises.

CIRCULAR

Guidelines for implementing Decree No. 28/CP dated March 28, 1997 and Decree No. 03/2001/NĐ-CP dated January 11, 2001 of the Government on reforming salary and income management in state-owned construction enterprises

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Implementing Decree No. 28/CP dated March 28, 1997 and Article 2 of Decree No. 03/2001/NĐ-CP dated January 11, 2001 of the Government on amending and supplementing certain articles of Decree No. 28/CP dated March 28, 1997 on reforming salary and income management in state-owned enterprises, following the opinions of the Ministry of Finance in Circular No. 10537 TC/TSTC dated November 2, 2001, the Ministry of Construction in Circular No. 1720/BXD-VKT dated September 28, 2001, and the General Confederation of Labor Vietnam in Circular No. 1602/TLĐ dated September 28, 2001, the Ministry of Labor, Invalids and Social Affairs guides the implementation of the salary mechanism in state-owned construction enterprises as follows:

I. APPLICABLE OBJECTS:

State-owned enterprises that undertake construction works or project components funded by state budget, state investment credit, state-guaranteed credit, or state-owned enterprise development investment shall be referred to hereinafter as construction enterprises.

Hereinafter referred to as construction enterprises.

II. PRINCIPLES

1. Based on the nature and scale of the construction work or project component, the availability of funds, the Project Owner shall determine the construction cost estimate based on the standard rates and unit prices issued by the Ministry of Construction or agreed upon by the Ministry of Construction for issuance by sectoral ministries, provincial, and centrally-administered municipal authorities. Among these, the labor cost for determining the construction cost estimate as the basis for organizing bidding or direct assignment must ensure the labor parameters as stipulated in Section III of this Circular.

2. Construction enterprises, based on the volume, quality, and schedule requirements of the construction work or project component, taking into account their actual technical level, technology, management level, skill level of workers, production organization, and labor organization, shall independently determine standard rates and unit prices appropriately. Among these, the labor cost for establishing the construction cost estimate for bidding participation or direct assignment must ensure the labor parameters as stipulated in Section III of this Circular, regardless of the unit price list provided by the Project Owner.

3. After winning the bid or being directly assigned, construction enterprises may adjust the standard rates and unit prices based on actual construction conditions to save costs and allocate them directly to the workers' wage fund but must ensure completion of the required volume, quality of the construction work or project component according to the approved construction cost estimate (in the case of direct assignment) or the bid-winning price (in the case of bidding).

III. LABOR COSTS FOR ESTABLISHING THE CONSTRUCTION WORK COST ESTIMATE

1. Minimum Wage Level:

The minimum wage level for determining labor costs in the construction work cost estimate is determined by the following formula:

TLmindt = TLmin x (1 + Kde)

Where:

- TLmindt: The minimum wage level for determining labor costs in the construction work cost estimate;

- TLmin: The general minimum wage level announced by the State in each period. From January 1, 2001, the general minimum wage level applicable to state-owned enterprises is implemented according to Clause 1, Article 1 of Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government at 210,000 VND/month. When the Government adjusts the general minimum wage level, the new adjustment will apply.

- Kde: Additional wage adjustment factor.

Additional wage adjustment factor (Kde)

Based on the supply-demand balance of labor, labor rental prices, and the minimum living expenses in different regions, the lowest additional wage adjustment factor (Kde) is specified as follows:

For construction projects located in a specific region, the additional wage adjustment factor (Kde) applicable to that region shall be applied.

Based on the actual situation of construction enterprises in various regions, enterprises may choose a higher adjustment factor than the prescribed level.

Example: For construction project A located in an area with an additional wage adjustment factor of 0.2, the minimum wage level for determining labor costs in the construction work cost estimate would be:

TLmindt = 210,000 VND/month x (1 + 0.2) = 252,000 VND/month

Depending on specific conditions, enterprises may choose a higher adjustment factor than 0.2 to determine labor costs in the construction work cost estimate for project A.

2. Average job grade wage coefficient:

Construction enterprises determine the average job grade wage coefficient based on the complexity and labor structure required to meet the needs of the construction work or project component, based on the wage rate coefficients according to the national wage scales and pay grades stipulated in Decree No. 26/CP dated May 23, 1993 of the Government.

3. Additional wage allowances:

a. Regional allowance: Construction projects located in areas with regional allowances shall implement the levels prescribed in Joint Circular No. 03/2001/TTT-BLĐTBXH-BTC-UBDTMN dated January 18, 2001 of the Ministry of Labor, Invalids and Social Affairs, Ministry of Finance, and the Committee for Ethnic Minorities and Mountainous Areas.

b. Mobility allowance:

- 0.2 times the minimum wage level, applicable to construction projects in plains.

- 0.4 times the minimum wage level, applicable to construction projects in midlands, mountainous areas, remote, and far-flung regions;

- 0.6 times the minimum wage level, applicable to construction projects on islands.

c. Unstable production coefficient:

- 15% of job grade wages, applicable to key state projects;

- 10% of job grade wages, applicable to other projects.

IV. SALARY MECHANISM OF CONSTRUCTION ENTERPRISES AFTER WINNING BIDS OR BEING DIRECTLY ASSIGNED

1. Establishing labor cost plans:

On the basis of the estimated value of the construction project or tendered or designated sub-projects and based on their specific conditions, enterprises shall establish wage cost plans in accordance with the provisions of Government Decree No. 28/CP dated March 28, 1997 on reforming wage management and income in state-owned enterprises, Government Decree No. 03/2001/NĐ-CP dated January 11, 2001 supplementing and amending Government Decree No. 28/CP, and Circular No. 05/2001/TT-BLDTBXH dated January 29, 2001 of the Ministry of Labor, Invalids, and Social Affairs guiding the establishment of unit prices for wages and wage management in state-owned enterprises.

The enterprise's wage cost plan must ensure the following conditions:

- Ensuring the quantity, quality, and progress of the construction project in accordance with regulations;

- Not increasing the estimated construction value of the project or sub-project that has been tendered or designated;

- Fully fulfilling the obligation to pay state budget, social insurance, health insurance for workers, and profit in accordance with state regulations;

- Ensuring increased labor productivity.

2. Review of wage cost plans:

Before implementation, the enterprise's wage cost plan must be reviewed by the competent state agency according to the分级管理权限，具体如下：

- Ministries managing industries or sectors review the plans of enterprises under central management;

- Provincial Departments of Labor, Invalids, and Social Affairs review the plans of enterprises under local management;

- The Board of Directors of State-Owned Corporations 90/TTg or 91/TTg review the plans of enterprises under their management.

The application for review includes:

+ Request letter;

+ Wage cost plan established by the enterprise.

3. Determination of actual wage fund:

Based on the completion level of the construction project or sub-project and the conditions stipulated in Point 1, Section IV of this Circular, the enterprise may settle the actual wage fund according to the enterprise's wage cost plan reviewed and approved by the competent state agency according to the分级管理权限.

If the enterprise fails to meet the conditions stipulated in Point 1, Section IV of this Circular, the wage fund must be reduced. The lowest average after reduction must equal the average wage calculated according to Section III when establishing the estimated construction value of the project or sub-project.

V. IMPLEMENTATION ORGANIZATION.

1. Based on the provisions and guidance set out in this Circular, ministries managing industries or sectors, provincial people's committees, provincial Departments of Labor, Invalids, and Social Affairs, the Chairmen of the Boards of Directors of State-Owned Corporations 90/TTg and 91/TTg, and construction enterprises have the responsibility to implement the provisions of this Circular.

2. The Ministry of Construction is responsible for guiding the determination of wage costs in the estimated value of projects or sub-projects as stipulated in this Circular.

3. The responsibilities of state management agencies and construction enterprises regarding wage and income management are implemented in accordance with Section IV of Circular No. 05/2001/TT-BLDTBXH dated January 29, 2001 of the Ministry of Labor, Invalids, and Social Affairs.

Reporting on labor, wages, and income in construction enterprises is regulated as follows:

- By the latest in April each year, construction enterprises must report to the competent authority according to the分级管理权限the situation of labor, wages, and income for completed projects or sub-projects from the previous year, using Form No. 1 attached to this Circular.

- By the latest in May each year, ministries managing industries or sectors, provincial people's committees according to the分级管理权限must report to the Ministry of Labor, Invalids, and Social Affairs the situation of labor, wages, and income of construction enterprises from the previous year, using Form No. 2 attached to this Circular.

4. The wage costs specified in Section III of this Circular apply only to projects or sub-projects approved for investment by authorized authorities but not yet tendered or designated since the date this Circular takes effect.

For projects or sub-projects tendered or designated before the effective date of this Circular, the construction estimate will not be redone. For remaining work volumes, if enterprises have cost-saving plans for other expense items while ensuring the conditions stipulated in Point 1, Section IV of this Circular, they may establish such plans and pay wages according to the aforementioned Section IV.

5. This Circular takes effect from January 1, 2002.

During implementation, any issues encountered should be reported by ministries, provincial people's committees directly under the Central Government, and state-owned enterprises to the Ministry of Labor, Invalids, and Social Affairs for consideration and resolution.