Circular No. 07/2005/TT-BLDTBXH guiding the implementation of Decree No. 206/2004/NĐ-CP dated December 14, 2004 of the Government on labor management, wages, and income in state-owned companies.

CIRCULAR

Guidelines for Implementing Decree No. 206/2004/ND-CP

dated December 14, 2004 of the Government on the management of labor, wages, and income in state-owned companies

Implementation of Decree No. 206/2004/ND-CP dated December 14, 2004 of the Government on the management of labor, wages, and income in state-owned companies, the Ministry of Labor, Invalids, and Social Affairs provides guidelines for implementation as follows:

The scope and objects to which the regulations on the management of labor, wages, and income under Articles 1 and 2 of Decree No. 206/2004/ND-CP are specified as follows:

I. SCOPE AND APPLICABLE SUBJECTS

The scope of application includes state-owned companies operating under the Law on State-Owned Enterprises, including:

Article 1. Scope of Application:

a) State-owned enterprises:

+ State-owned holding companies established by self-investment of enterprises (holding companies according to the parent company - subsidiary model);

- State-owned corporations:

+ State-owned corporations established under the Law on State-Owned Enterprises in 1995 and State-owned corporations established by the State's decision to invest and establish under the Law on State-Owned Enterprises in 2003;

b) Independent accounting member companies of holding companies established by the State's decision to invest and form.

+ State-owned investment and business corporations;

- Independent state-owned companies;

These holding companies and enterprises mentioned above are referred to as companies.

a) Workers employed under labor contracts prescribed in Decree No. 44/2003/ND-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on labor contracts;

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

b. Deputy General Managers, Deputy Directors, Chief Accountants (excluding Deputy General Managers, Deputy Directors, and Chief Accountants working under contracts);

c. Members of the Supervisory Board (excluding the Chairman of the Supervisory Board).

II. LABOR MANAGEMENT

The management of labor under Article 3 of Decree No. 206/2004/ND-CP is specified as follows:

1. Developing plans for labor utilization:

a. In January each year, based on the volume, quality, requirements, and tasks of production and business, labor norms, and the situation of labor utilization in the previous year, the company establishes a plan for labor utilization, specifying the total number of workers utilized in the planning year, the number of new workers to be recruited, and training and skill development plans for each type of worker (according to Form No. 1);

b. The company registers or reports its labor utilization plan to the representative of the owner, specifically:

- For companies without a Board of Management, they must register their labor utilization plan with the relevant ministry or provincial/municipal People's Committee before implementation;

- For companies with a Board of Management, they must report their labor utilization plan to the Board of Management for approval before implementation.

2. Recruitment of workers:

a. Based on the registered labor utilization plan or the plan approved by the Board of Management, the company recruits new workers in accordance with Decree No. 39/2003/ND-CP dated April 18, 2003 of the Government and Circular No. 20/2003/TT-BLDTBXH dated September 22, 2003 of the Ministry of Labor, Invalids, and Social Affairs;

b. The company enters into labor contracts with newly recruited workers in accordance with Decree No. 44/2003/ND-CP dated May 9, 2003 of the Government and Circular No. 21/2003/TT-BLDTBXH dated September 22, 2003 of the Ministry of Labor, Invalids, and Social Affairs.

3. Evaluation of labor utilization plans:

In the fourth quarter of each year, the company evaluates the implementation of the labor utilization plan. If the actual number of workers exceeds the demand, leading to unemployment, the company must develop plans for training, retraining, and job placement for these workers.

In cases where all measures have been taken but still cannot provide employment, the company must fully implement the regulations concerning termination of labor contracts in accordance with Decree No. 39/2003/ND-CP dated April 18, 2003 and Decree No. 44/2003/ND-CP dated May 9, 2003 of the Government.

III. WAGE AND INCOME MANAGEMENT

1. Adjustment factor exceeding the minimum wage level:

The adjustment factor exceeding the minimum wage level shall not exceed twice the minimum wage level serving as the basis for calculating the unit wage rate under Article 4 of Decree No. 206/2004/ND-CP is specified as follows:

a. The minimum wage level (TL

) as stipulated in Article 1 of Decree No. 203/2004/ND-CP dated December 14, 2004 of the Government, from October 1, 2004, is 290,000 VND/month;_{Maximum Downhill Gradient}b. The adjustment factor exceeding the minimum wage level (K

dc_{) shall not exceed twice, the company selects a specific factor but must ensure the following conditions:}- Pay taxes to the state budget in accordance with tax laws and implementing guidance documents;

- The average wage increase rate must be lower than the average productivity increase rate. The average wage increase rate and the average productivity increase rate are calculated in accordance with Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids, and Social Affairs;

- Must generate profit. The planned profit should not be lower than the realized profit of the previous year, except in special cases (the State has a decision to intervene to stabilize the market; increase depreciation to recover capital quickly, update technology, expand production and business, and new investment).

2. Establishing the unit wage rate:

The establishment of the unit wage rate under Clause 1 and Clause 2, Article 5 of Decree No. 206/2004/ND-CP to serve as the basis for paying wages to workers in line with the price of labor and the supply and demand relationship in the labor market is carried out in the following steps:

a. Determining the production and business targets to establish the unit wage rate:

- Based on the nature and characteristics of production and business, the company selects the following production and business targets to establish the unit wage rate:

- Total revenue;

- Total revenue minus total costs (excluding wages):

- Profit;

- Total products (including converted products) sold.

The indicators of total revenue, total revenue minus total costs (excluding wages), and profit are calculated in accordance with Decree No. 199/2004/ND-CP dated December 3, 2004 of the Government promulgating the Financial Management Regulations for State-Owned Companies and the Management of State Capital Invested in Other Enterprises and the implementing guidance documents of the Ministry of Finance.

The indicator of total products (including converted products) sold is calculated in accordance with Circular No. 06/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids, and Social Affairs.

b. Determining parameters to establish the unit wage rate:

b. Determine the parameters for establishing the unit price of wages:

The parameters for establishing the unit price of wages include:

- The comprehensive labor quota for the product unit (T) or the fixed staffing level of the company (L), established according to Circular No. 06/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids and Social Affairs;_sp) or the fixed labor quota of the company (L_db), established in accordance with Circular No. 06/2005/TT-BLDTBXH dated January 5, 2005, issued by the Ministry of Labor, Invalids and Social Affairs;

- The minimum wage rate chosen by the company, calculated using the following formula:

TL_mincty = TL_{Maximum Downhill Gradient} x (1 + K_đc)

Where:

+ TL_mincty: The minimum wage rate chosen by the company;

+ TL_{Maximum Downhill Gradient}: The general minimum wage rate;

+ K_đc: The adjustment factor for additional increase over the general minimum wage rate selected by the company in accordance with paragraph b, point 1, Section III of this Circular.

- The average wage grade coefficient (H_cb):

The average wage grade coefficient for establishing the unit price of wages is determined based on the average job grade of direct production and business workers, and the average wage coefficient of indirect labor (excluding the General Director, Director, and members of the Board of Management). Job grades are determined based on production organization, labor organization, technical level, technology, and product quality requirements.

- The average allowance coefficient included in the unit price of wages (H_pc):

The average allowance coefficient included in the unit price of wages is determined based on the object and the allowance level enjoyed for each type of allowance prescribed by the State, including: regional allowances; attraction allowances; responsibility allowances; hazardous and dangerous work allowances; mobility allowances; allowances for department heads, deputy department heads, and equivalent positions.

- The salary of specialized staff of mass organizations paid by the mass organizations (V_đt):

For specialized staff of mass organizations paid by the mass organizations, the difference between the salary calculated based on the company's chosen minimum wage rate and the salary paid by the mass organizations is added to determine the unit price of wages of the company.

- Additional wage when working at night (V_ttlđ):

Additional wage when working at night is determined by 30% of the wage when working during the day for the number of workers working at night already identified in the plan.

c. Establishing the unit price of wages:

The company selects an appropriate method below to establish the unit price of wages, specifically:

- The unit price of wages based on total revenue, applied according to the following formula:

Where:

+ V_dg: The unit price of wages based on total revenue (unit of measurement is dong/1,000 dong revenue);

+ L_db, TL_mincty, H_cb, H_pcfor each specific service package in the service provision contract between the ISP and the customer._dtfor each specific service package in the service provision contract between the ISP and the customer._ttld: determined according to paragraph b, point 2, Section III of this Circular;

+ ST_kh: Total planned revenue according to paragraph a, point 2, Section III of this Circular.

- The unit price of wages based on total revenue minus total costs (excluding wages), applied according to the following formula:

Where:

+ V_dg: The unit price of wages based on total revenue minus total costs excluding wages (unit of measurement is dong/1,000 dong total revenue minus total costs excluding wages);

+ L_db, TL_mincty, H_cb, H_pcfor each specific service package in the service provision contract between the ISP and the customer._dtfor each specific service package in the service provision contract between the ISP and the customer._ttld: determined according to paragraph bm, point 2, Section III of this Circular;

+ ST_kh : Total planned revenue according to paragraph a, point 2, Section III of this Circular;

+ SC_kh : Total planned costs excluding wages according to paragraph a, point 2, Section III of this Circular.

- The unit price of wages based on profit, applied according to the following formula:

Where:

+ V_dg : The unit price of wages based on total revenue (unit of measurement is dong/1,000 dong total revenue minus total costs excluding wages);

+ L_db, TL_mincty, H_cb, H_pcfor each specific service package in the service provision contract between the ISP and the customer._dtfor each specific service package in the service provision contract between the ISP and the customer._ttld: determined according to paragraph b, point 2, Section III of this Circular;

+ P_kh: Planned profit according to paragraph a, point 2, Section III of this Circular.

- The unit price of wages based on units of products (including converted products) sold, applied according to the following formula:

V_dg = V_hours x (1 - kcs)_sp

Where:

+ V_dg: The unit price of wages based on units of products, including converted products sold (unit of measurement is dong/unit of product);

+ V_hours: Hourly wage to calculate the unit price of wages, calculated by dividing the planned average monthly wage by 26 days and then by 8 hours. The average monthly wage is calculated based on the wage grade coefficient, average allowance, the company's chosen minimum wage rate, the wage difference of specialized staff of mass organizations, and additional wage when working at night;

+ T_sp: Comprehensive labor quota for the product unit (calculated in hours-person/unit of product).

In addition to the four methods of calculating the unit price of wages mentioned above, in the current market economy, there is also a method of calculating the unit price of wages based on value-added. Depending on specific conditions, pilot calculation of the unit price of wages based on value-added can be implemented for some companies.

d) Registering the unit price of wages:

After establishing the unit price of wages according to the methods mentioned above, before implementation, the company must register the unit price of wages with the representative of the owner, specifically:

- For companies without a Board of Directors, registration should be made with the Department managing the industry or the People's Committee of the province or centrally governed city;

- For companies with a Board of Directors, subsidiaries establish the unit price of wages, send it to the General Director, Director of the company for consolidation and report to the Board of Directors for approval.

Specifically, for special-class companies and companies performing public service activities such as the Civil Aviation Management Center and Airports Clusters, the Board of Directors (for companies with a Board of Directors) or the General Director, Director consolidate the unit price of wages of subsidiary units into the company's unit price of wages and report to the state management agency, specifically:

+ For special-class companies established according to Decision No. 91/TTg dated March 7, 1994 of the Prime Minister, report to the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance for review before implementation;

+ For other special-class companies and companies performing public service activities such as the Civil Aviation Management Center and Airports Clusters, report to the Department managing the industry or the People's Committee of the province or centrally governed city to submit to the Ministry of Labor, Invalids and Social Affairs, the Ministry of Finance for review before implementation.

3. Determining the planned wage fund:

The total planned wage fund for preparing the overall expenditure plan on wages of the company is calculated according to the following formula:

åV_kh = V_khdg + V_khcd

Where:

- åV_kh : The total planned wage fund of the company for the year;

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_khdg : The planned wage fund according to the unit price of wages;

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_khcd : The planned wage fund according to the system (not included in the unit price of wages).

V_khdg and V_khcd When

a) The planned wage fund according to the wage rate:

The planned wage fund according to the wage rate of the company is calculated according to the following formula:

V_khdg = V_dg x C_sxkh

Where:

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_khdg : The planned wage fund according to the unit price of wages;

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_dg : Wage rate calculated in accordance with paragraph c, point 2, section III of this Circular;

Ministry of Science and Technology: The Minister and Deputy Ministers, agencies and units under the Ministry;_sxkh : Total revenue or total revenue minus total costs (excluding wages) or profit or total product (including converted products) planned for consumption, determined in accordance with paragraph a, point 2, section III of this Circular;

b) The planned wage fund according to the system (not included in the wage rate):

The planned wage fund according to the system (not included in the wage rate) of the company is calculated according to the following formula:

V_khcd = V_pc + V_bs

Where:

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_khcd : Planned wage fund according to the system (not included in the wage rate);

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_pc: Overtime pay and other benefits (if any) not included in the wage rate, including diving allowance; sea travel allowance; aviation safety bonus, safe operation bonus, calculated based on the object and level stipulated by the State;

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_bs: Wages for holidays enjoyed in accordance with the Labor Code (including annual leave, personal leave, public holidays, and leave under female labor regulations), applicable to companies that establish wage rates based on unit products without considering labor norms;

4. Determining the actual wage fund:

The total actual wage fund of the company according to Clause 3, Article 5 of Decree No. 206/2004/ND-CP is calculated according to the following formula:

åV_the = V_thđg + V_thcđ

Where:

- åV_the: Total actual wage fund of the company.

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_thđg: Actual wage fund according to the wage rate (For companies required to adjust the actual wage fund, take the adjusted actual wage fund);

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_thcđ: Actual wage fund according to the system (not included in the wage rate).

V_thđg and V_thcđ When

a. Determining the actual wage fund according to the wage rate:

The actual wage fund according to the wage rate is determined based on the results of production and business tasks, labor productivity, and profits of the company, specifically:

- The actual wage fund according to the results of production and business tasks is calculated according to the following formula:

V_thđg = V_đg x C_sxth (1)

Where:

+ V_thđg: Actual wage fund according to the wage rate;

+ V_đg: Wage rate calculated in accordance with paragraph c, point 2, section III of this Circular;

ĐMT_sxth: Total revenue or total revenue minus total costs (excluding wages) or profit or total product (including converted products) actually consumed;

When determining the total revenue index; total revenue minus total costs (excluding wages); profit; total product (including converted products) actually consumed, if there are factors increasing compared to the plan but not created by labor productivity, they must be excluded when determining the actual wage fund.

- Adjusting the actual wage fund according to labor productivity and profit:

+ For companies with average actual labor productivity and actual profit equal to or higher than the plan, the actual wage fund according to the wage rate is calculated according to formula (1).

+ For companies with average actual labor productivity and actual profit lower than the plan, the actual wage fund according to the wage rate must be adjusted according to the following formula:

V_thđgđc = V_thđg - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_w - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_p (2)

Where:

* V_thđgđc: Actual wage fund according to the wage rate after adjustment;

* V_thđg: Actual wage fund according to the wage rate;

* V_w: Adjusted wage fund according to labor productivity, calculated according to the following formula:

- Electronic Information Portal_the, W_kh: Average actual and planned labor productivity of the company, determined in accordance with Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids and Social Affairs.

* V_p: Adjusted wage fund according to profit (for cases where the actual wage fund is still lower than the planned profit after adjusting according to labor productivity), calculated according to one of the two methods below:

Method 1: Adjusting the wage fund by an absolute amount corresponding to the reduced profit, calculated according to the following formula:

V_p x T_kh - P_the (4)

Where:

V_p: Adjusted wage fund according to profit;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_kh: Planned profit corresponding to the wage rate according to paragraph b, point 1 and paragraph a, point 2, section III of this Circular;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_the: Actual profit (after adjusting the actual wage fund according to labor productivity).

Method 2: Adjusting the wage fund by a relative amount, calculated according to the following formula:

Where:

V_p: Adjusted wage fund according to profit;

V_thđg: Actual wage fund according to the wage rate;

V_cđ: System wage fund, determined by multiplying the number of normative workers by the average wage scale, average overtime pay scale, and the general minimum wage;

V_w: Adjusted wage fund according to labor productivity, calculated according to formula (3);

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_the: Actual profit (after adjusting the wage fund according to labor productivity).

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_kh: Planned profit corresponding to the wage rate according to paragraph b, point 1 and paragraph a, point 2, section III of this Circular;

+ For companies with average actual labor productivity lower than the plan and actual profit equal to or higher than the plan, the actual wage fund according to the wage rate must be adjusted according to the following formula:

V_thđgđc = V_thđg - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_w

Where:

* V_thđgđc: Actual wage fund according to the wage rate after adjustment;

* V_thđg: Actual wage fund according to the wage rate;

* V_w: Adjusted wage fund according to labor productivity, calculated according to formula (3)

+ For companies with actual profit lower than the plan and average actual labor productivity equal to or higher than the plan, the actual wage fund according to the wage rate must be adjusted according to the following formula:

V_thđgđc = V_thđg - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_p

Where:

* V_thđgđc: Actual wage fund according to the wage rate after adjustment;

* V_thđg: Actual wage fund according to the wage rate;

* V_{pursuant to the annual planning plan of the People's Committee (PC) on April 7, 2010, and the annual planning plan of the Provincial People's Committee (Clause 2, Article 32, Urban Planning Law).} Adjusted wage fund according to profit, calculated according to one of the two methods below:

Method 1: Adjusting the wage fund by an absolute amount corresponding to the reduced profit, calculated according to formula (4).

Method 2: Adjusting the wage fund by a relative amount, calculated according to the following formula:

Where:

V_p: Adjusted wage fund according to profit;

V_thđg: Actual wage fund according to the wage rate;

V_cđ: System wage fund, determined by multiplying the number of normative workers by the average wage scale, average overtime pay scale, and the general minimum wage;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_the: Actual profit;

"5. The pre-tax weighted average cost of capital i (%) is determined according to the formula below:_kh: Planned profit corresponding to the wage rate according to paragraph b, point 1 and paragraph a, point 2, section III of this Circular;

The actual wage fund after adjusting according to labor productivity and profit as mentioned above shall not be lower than the system wage fund (V_cđ).

+ For loss-making companies, the actual wage fund according to the wage rate is determined by multiplying the actual average number of workers by the average wage scale, average overtime pay scale, and the general minimum wage.

b. Determining the actual wage fund according to the system (not included in the wage rate):

The actual wage fund according to the system (not included in the wage rate) is calculated according to the following formula:

V_thcđ = V_pc + V_bs + V_tg + V_lđ

Where:

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_thcđ: Actual wage fund according to the system (not included in the wage rate);

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_pcfor each specific service package in the service provision contract between the ISP and the customer._bsOvertime allowances and other benefits shall not be included in the unit labor cost; wages for days off paid according to the provisions of Clause b, Point 3, Section III of this Circular shall be calculated based on actual expenditures as prescribed by the State.

V_tgOvertime wages shall be calculated based on the actual hours worked overtime (the total number of planned overtime hours and unplanned overtime hours not exceeding the limit set forth in the Labor Code) to implement the quantity and work arising unexpectedly within the planned wage fund.

- V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_lđNight shift wages shall be calculated based on the actual hours worked during night shifts to implement the quantity and work arising unexpectedly within the planned wage fund.

5. Wage Regulations:

The company's wage regulations under Clause 3, Article 5 of Decree No. 206/2004/ND-CP are specified as follows:

a. The company has the responsibility to establish wage regulations in accordance with the law, ensuring democracy, fairness, transparency, and encouraging individuals with talent, professional expertise, high productivity, and significant contributions to the company.

When establishing wage regulations, the participation of the Company Trade Union Executive Board must be ensured, and such regulations must be communicated to each employee and registered with the representative of the owner before implementation.

b. The company may establish a reserve fund to supplement the next year's wage fund to ensure uninterrupted wage payments and may not use it for other purposes. The annual reserve level is determined by the General Director or Director after consulting with the Company Trade Union Executive Board, but it shall not exceed 17% of the implemented wage fund.

c. Based on the implemented wage fund as stipulated in Point 4, Section III of this Circular and the wage regulations, the company pays wages according to productivity, quality, and efficiency of production and business operations for each unit, department, and individual employee. In cases where expenditures exceed the implemented wage fund, the company must repay the excess from the next year's implemented wage fund.

6. Bonus System:

The company's bonus system under Article 6 of Decree No. 206/2004/ND-CP is specified as follows:

a. The annual bonus fund from the company's commendation fund is determined according to the provisions of Decree No. 199/2004/ND-CP dated December 3, 2004, issued by the Government regarding the financial management regulations of state-owned companies and the management of state capital invested in other enterprises, and the guiding documents issued by the Ministry of Finance.

b. The company has the responsibility to establish a bonus system in accordance with the law, ensuring democracy, fairness, transparency, and encouraging individuals with talent, professional expertise, high productivity, and significant contributions to the company.

When establishing the bonus system, the participation of the Company Trade Union Executive Board must be ensured, and such regulations must be communicated to each employee and registered with the representative of the owner before implementation.

c. Based on the bonus fund, the company awards bonuses to employees, including members of the Board of Directors, General Director, and Director according to the company's bonus system.

IV. IMPLEMENTATION

1. Responsibilities of the General Director and Director of the company under Article 7 of Decree No. 206/2004/ND-CP are specified as follows:

a. Each January, develop plans for labor utilization; profit plans, and wage rates to be registered with the owner's representative according to forms No. 2 and No. 3; decide on the wage rates of member units; submit the wage rate after registration or review to the provincial Department of Labor, Invalids, and Social Affairs (for companies managed by the Provincial People's Committee) or the relevant ministry (for companies with a Board of Directors managed by a ministry) and the provincial tax authority where the company's headquarters is located to serve as the basis for determining taxable income.

b. Determine the implemented wage fund and bonus fund of the company;

c. Establish labor standards; technical grade standards for workers, professional standards for staff; promotion regulations; wage and bonus systems of the company and report to the Board of Directors (for companies with a Board of Directors); register the company's wage and bonus systems with the relevant ministry or the Provincial People's Committee (for companies without a Board of Directors);

d. Stabilize, train, and specialize the workforce in labor management, wages, and bonuses of the company and its member units to assist the General Director and Director in fulfilling recruitment, training, utilization, wage payment, and resolution of policies for employees in accordance with the law;

đ. Each March, report to the owner's representative on the implementation of the previous year's production, business, labor, wage, and bonus plans of the company, and simultaneously send the provincial Department of Labor, Invalids, and Social Affairs (for companies managed by the Provincial People's Committee) according to form No. 4.

2. Responsibilities of the owner's representative under Article 8 of Decree No. 206/2004/ND-CP are specified as follows:

a. Board of Directors:

- Each February, approve the profit plan, labor utilization plan, and wage rates of the company;

- Approve labor standards, technical grade standards for workers, professional standards for staff, promotion regulations, and wage and bonus systems of the company;

- Direct, inspect, and supervise the company's compliance with the provisions of this Circular;

- Report to the relevant ministry, Provincial People's Committee, or the Ministry of Labor, Invalids, and Social Affairs, and the Ministry of Finance the wage rate plan for special category companies and companies engaged in public service activities as stipulated in Clause d, Point 2, Section III of this Circular;

- Decide on the functions, tasks, powers, and organizational structure of the labor management department of the company;

- In March each year, report to the Ministry managing the industry or the People's Committee of the province or centrally governed city on the implementation of the production, business, labor, salary, and bonus plan of the company for the immediately preceding year, according to Form No. 4. For companies classified as special category and those implementing public welfare activities as stipulated in Subparagraph d, Point 2, Section III of this Circular, they must also report to the Ministry of Labor - Invalids and Social Affairs.

b. The Ministry managing the industry, the People's Committee of the province or centrally governed city

- Accept registration of profit plans; labor usage plans; unit wage rates; wage regulations, bonus regulations, and reports on the implementation of the production, business, labor, salary, and bonus plan of the immediately preceding year of companies under their management.

In case of discovering contents that do not comply with state regulations, within fifteen days from the date of receiving the registration form, issue a written request for the company to implement in accordance with state regulations.

- Guide, inspect, and supervise companies under their management to implement in accordance with the provisions of this Circular. For companies managed by provinces or centrally governed cities, the Department of Labor - Invalids and Social Affairs shall be responsible for assisting the People's Committee of the province or centrally governed city in reviewing the unit wage rate registration forms of these companies, guiding, inspecting, and supervising the implementation of the provisions of this Circular.

- Coordinate with the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance to appraise the unit wage rates for companies classified as special category and those implementing public welfare activities as stipulated in Subparagraph d, Point 2, Section III of this Circular.

- In March each year, report to the Ministry of Labor - Invalids and Social Affairs on the construction and registration of the unit wage rate plan for the planning year according to Form No. 5 and the results of production, business, labor, salary, and bonus of the immediately preceding year according to Form No. 6 of companies under their management.

3. Responsibilities of the Ministry of Labor - Invalids and Social Affairs as specified in Article 9 of Decree No. 206/2004/NĐ-CP are detailed as follows:

a. Coordinate with the Ministries managing the industry, the People's Committees of the province or centrally governed city to guide, train, and inspect the implementation of the provisions of this Circular.

b. Guide the establishment of labor norms; technical grade standards for workers; professional and vocational standards for officials and staff; average labor productivity; average salary; and the establishment of wage payment regulations and bonus regulations for companies.

c. In the first quarter of each year, appraise the unit wage rates for companies classified as special category and those implementing public welfare activities as stipulated in Subparagraph d, Point 2, Section III of this Circular after exchanging opinions with the Ministry of Finance.

d. Coordinate with the Ministries managing the industry and localities to pilot methods of calculating unit wage rates based on added value for some companies.

V. IMPLEMENTATION PROVISIONS

1. Based on the guidance content of this Circular, the Ministries managing the industry, the People's Committees of the province or centrally governed city, and the Board of Directors shall direct companies to implement labor management policies, salary systems, and income in accordance with state regulations.

2. For projects using state budget capital; state development credit capital; state-guaranteed credit capital; company development investment capital; or companies implementing public welfare activities, apply the adjustment factor prescribed in Subpoint 1, Section III of this Circular when determining salary costs in the budget to organize bidding, designated tendering, or negotiated orders. Based on the project budget, the quantity of tasks designated for tendering, winning the bid, or being ordered, the company shall develop a salary cost plan to pay employees but must ensure the quantity, quality, and progress of the project; public service products; not increase the budget estimate value; fulfill all tax obligations to the state budget, social insurance, and health insurance contributions for employees; and ensure increased labor productivity and profits in accordance with state regulations.

3. For Development Support Funds, Vietnam Deposit Insurance Corporation, and Project Management Boards for Investment Construction, when selecting an additional adjustment factor above the general minimum wage level, they must ensure the conditions stipulated in Decision No. 17/2000/QĐ-TTg dated February 3, 2000; Decision No. 88/2001/QĐ-TTg dated June 5, 2001; Decision No. 198/1999/QĐ-TTg dated September 30, 1999 of the Prime Minister and related implementation guidelines.

4. State-owned enterprises operating under the Law on Enterprises and other economic sectors' enterprises may apply the provisions of this Circular.

5. This Circular takes effect fifteen days after its publication in the Official Gazette. The provisions of this Circular shall be implemented from January 1, 2005, replacing the following Circulars:

- Circular No. 05/2001/TT-BLĐTBXH dated January 29, 2001 of the Ministry of Labor - Invalids and Social Affairs guiding the construction of unit wage rates and salary management, income management in state-owned enterprises;

- Circular No. 03/2002/TT-BLĐTBXH dated January 9, 2002 of the Ministry of Labor - Invalids and Social Affairs guiding the implementation of 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;

- Circular No. 04/2002/TT-BLĐTBXH dated January 9, 2002 of the Ministry of Labor - Invalids and Social Affairs guiding the implementation of salary and income management for state-owned enterprises engaged in public welfare activities;

- Circular No. 20/1999/TT-BLĐTBXH dated September 8, 1999 of the Ministry of Labor - Invalids and Social Affairs guiding the implementation of Decision No. 121/1999/QĐ-TTg dated May 8, 1999 of the Prime Minister on salaries and incomes of the Vietnam Electricity Corporation;

- Joint Circular No. 18/1998/TTLT-BLĐTBXH dated December 31, 1998 of the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance guiding the determination of the actual salary fund when state-owned enterprises fail to meet revenue and profit targets.

- Circular No. 19/1999/TTLT-BLDTBXH dated August 14, 1999 of the Joint Ministry of Labor, War Invalids and Social Affairs - Ministry of Finance guiding the supplementation of Circular No. 18/1998/TTLT-BLDTBXH dated December 31, 1998 on determining the wage fund to be implemented in state-owned enterprises;

In the course of implementation, if there are any difficulties, it is requested that the relevant ministries, provincial People's Committees under the central government, and state-owned companies report to the Ministry of Labor, War Invalids and Social Affairs for consideration and resolution.