Decree No. 03/2003/ND-CP On Adjusting Wages, Social Allowances, and Reforming the Wage Management Mechanism

DECREE OF THE GOVERNMENT

Regarding the adjustment of salaries and social allowances and
the reform of the salary management mechanism
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THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Labor Code on June 23, 1994 and the Law Amending and Supplementing Certain Provisions of the Labor Code on April 2, 2002;

Pursuant to the Resolutions of the National Assembly, Session XI, second session: Resolution No. 09/2002/QH11 dated November 28, 2002 "On the State Budget for 2003" and Resolution No. 14/2002/QH11 dated December 16, 2002 "On tasks for 2003";

At the proposal of the Minister of Home Affairs, the Minister of Labor, Invalids and Social Affairs, and the Minister of Finance,

DECREE:

Article 1. As of January 1, 2003, adjust the minimum wage, allowances, and living expenses for those receiving wages, allowances, and living expenses as follows:

1. Increase the minimum wage from VND 210,000/month as stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government to VND 290,000/month applicable to individuals receiving wages and allowances from state budget funds and workers in domestic enterprises (excluding foreign-invested enterprises in Vietnam).

2. Increase the monthly living allowance for village, ward, and town cadres currently working and those who have retired as stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government corresponding to the increase in the minimum wage from VND 210,000/month to VND 290,000/month.

3. Increase pensions and monthly social allowances compared to the provisions in Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government as follows:

a) Increase pensions by 46% for those who retired under Decree No. 218/CP dated December 27, 1961 of the Government, Decree No. 161/CP dated October 30, 1964 of the Government, and subsequent amendments and supplements issued before September 18, 1985.

b) Increase pensions by 42% for those who retired under Decree No. 236/HĐBT dated September 18, 1985 of the Council of Ministers (now the Government).

c) Increase pensions by 38.1% for those who retired under Decree No. 43/CP dated June 22, 1993, Decree No. 66/CP dated September 30, 1993, Decree No. 12/CP dated January 26, 1995, and Decree No. 45/CP dated July 15, 1995 of the Government.

d) Increase disability allowances and social insurance allowances by 38.1% for those receiving social insurance benefits.

4. Increase the preferential allowance fund for people with meritorious service by 38.1% compared to the current fund (for the year 2003) as stipulated in Decree No. 77/2000/NĐ-CP dated December 15, 2000 of the Government.

Article 2. Allocate the 2003 budget to ensure funding for salary adjustments and social allowances as follows:

1. Ministries, central agencies, and localities must allocate 10% of regular expenditures (excluding salaries and salary-like items) to each administrative agency and public institution to implement salary adjustments when allocating the budget.

2. Public institutions with revenue (including those implementing financial mechanisms according to Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government) must use at least 40% of retained revenue (except for the health sector which must use at least 35%) to implement salary adjustments.

3. Administrative agencies with revenue as prescribed must use at least 40% of retained revenue according to regulations to implement salary adjustments.

4. Local budgets must allocate 50% of the additional revenue in 2002 (the difference between actual revenue submitted to the state budget by December 31, 2002 and the revenue forecast approved by the People's Council at the beginning of the year) and 50% of the additional revenue forecast for 2003 as assigned by the Prime Minister compared to the revenue forecast for 2002 to implement salary adjustments; reserve 50% of the additional revenue in 2003 compared to the forecast for 2003 assigned by the Prime Minister to implement salary adjustments and carry over to 2004.

5. The Ministry of Finance must allocate the central budget to ensure payment of pensions for those who retired before January 1, 1995 (those who retired on or after January 1, 1995 will be paid by the Social Insurance Fund); pay preferential allowances for people with meritorious service; and submit to the Prime Minister for decision on supplementary sources for ministries, sectors, and localities if they have implemented the provisions of Clauses 1, 2, 3, and 4 of this Article but still lack funding.

Article 3. Implement new regulations on personnel establishment, salary, and income management for administrative agencies and public institutions as follows:

1. For state administrative agencies, Party administrative agencies, and mass organizations, expand the implementation of personnel quotas and administrative management costs according to Decision No. 192/2001/QĐ-TTg dated December 17, 2001 of the Prime Minister; simultaneously implement staff reduction according to Resolution No. 16/2000/NQ-CP dated October 18, 2000 of the Government.

2. For public institutions, implement autonomy in organizing tasks, using personnel quotas, and paying salaries to officials, civil servants, and employees within the institution according to current regulations.

Article 4.

1. The Ministry of Home Affairs shall take the lead and coordinate with relevant ministries and sectors to be responsible for:

a) Guiding the implementation of the adjustment of the minimum wage and living allowance for those receiving wages, allowances, and living expenses from the state budget as stipulated in Clause 1 and Clause 2 of Article 1 of this Decree.

b) Guiding the management of personnel quotas and salary payments for administrative agencies as stipulated in Clause 1 of Article 3 of this Decree.

c) Guiding the implementation of the autonomous mechanism for organizing tasks, using personnel quotas, and paying salaries for public institutions as stipulated in Clause 2 of Article 3 of this Decree.

2. The Ministry of Labor, Invalids, and Social Affairs shall take the lead and coordinate with relevant ministries and sectors to be responsible for:

a) Guiding the implementation of the adjustment of the minimum wage for enterprises as stipulated in Clause 1 of Article 1 of this Decree.

b) Guiding the implementation of the adjustment of pensions, social insurance allowances, and preferential allowances for people with meritorious service as stipulated in Clause 3 and Clause 4 of Article 1 of this Decree.

3. The Ministry of Finance shall take the lead, coordinate with relevant ministries and sectors to be responsible for:

a) Guiding the assurance of funding for salary adjustments and social allowances as stipulated in Article 2 of this Decree.

b) After the Prime Minister's Decision, allocate the additional sources to cover the remaining shortfall for implementing the increased salary payments at the ministries, sectors, and localities specified in Clause 5, Article 2 of this Decree.

c) Inspect and urge the ministries, sectors, and localities to implement measures to ensure the sources for implementing the increased salary payments as stipulated in Clauses 1, 2, 3, and 4, Article 2 of this Decree.

4. The Ministry of Education and Training shall take the lead and coordinate with relevant ministries and sectors to be responsible for:

a) Submitting to the Prime Minister for issuance of a Decision to replace Decision No. 70/1998/QĐ-TTg dated March 31, 1998 of the Prime Minister on the collection and use of tuition fees at public educational institutions within the national education system, to implement the provisions of Clause 2, Article 2 of this Decree from January 1, 2003.

b) Implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government for educational and training establishments and units under its management that generate income.

5. The Ministry of Health shall take the lead and coordinate with relevant ministries and sectors to be responsible for:

a) Submitting to the Government for issuance of a Decree to replace Decree No. 95/CP dated August 27, 1994 of the Government on the collection of part of hospital fees and Decree No. 33/CP dated May 23, 1995 of the Government amending Clause 1, Article 6 of Decree No. 95/CP, to implement the provisions of Clause 2, Article 2 of this Decree from January 1, 2003.

b) Implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government for medical examination and treatment establishments and units under its management that generate income.

6. Ministries and agencies equivalent to ministries shall be responsible for:

a) Amending or submitting to the Government or the Prime Minister for amendment of the revenue collection, distribution, and utilization systems for revenues and fees within their authority, to implement the provisions of Clauses 2 and 3, Article 2 of this Decree from January 1, 2003.

b) Implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government for units under their management that generate income.

7. Guidance documents issued by ministries and agencies equivalent to ministries to implement this Decree (as mentioned in Clauses 1, 2, and 3 of this Article) and documents submitted to the Government or the Prime Minister for amendment (as mentioned in point a of Clauses 4, 5, and 6 of this Article) must be promulgated in the first quarter of 2003.

8. Provincial People's Committees and Municipal People's Committees directly under the Central Government shall be responsible for:

a) Implementing measures to ensure the sources for adjusting salaries and social allowances as stipulated in Clauses 1, 2, 3, and 4, Article 2 of this Decree.

b) Implementing Decree No. 10/2002/NĐ-CP dated January 16, 2002 of the Government for units under their management that generate income.

Article 5. The Ministry of National Defense and the Ministry of Public Security shall, after reaching agreement with the Ministry of Interior, the Ministry of Finance, and the Ministry of Labor, Invalids, and Social Affairs, provide guidance on the implementation of this Decree for objects under their management.

Article 6.

1. This Decree shall take effect fifteen days after its publication in the Official Gazette.

2. The adjusted salary level as provided for in Clause 1, Article 1 of this Decree shall be used to calculate the severance pay based on years of service for surplus labor according to Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government and for those who cease employment due to staff reduction according to Resolution No. 16/2000/NQ-CP dated October 18, 2000 of the Government, for years of service from 2003 onwards, and for years of service from 2002 and earlier calculated according to the guidance before January 1, 2003.

The provisions regarding the calculation of severance pay based on years of service for surplus labor in this Decree replace the provisions on the calculation of severance pay for surplus labor and those who cease employment due to staff reduction as stipulated in Decree No. 41/2002/NĐ-CP dated April 11, 2002 of the Government and Resolution No. 16/2000/NQ-CP dated October 18, 2000 of the Government.

3. Deductions and benefits calculated based on salary or living expenses as prescribed by the State shall be recalculated correspondingly with the adjustment of the minimum wage and living expense levels as stipulated in this Decree.

Article 7. The Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial people's committees under the central government shall be responsible for enforcing this Decree.