Circular No. 09/2002/TT-BLDTBXH guiding the implementation of mechanisms for labor management, salary, and income for state-owned single-member limited liability companies holding 100% of charter capital.

CIRCULAR

Guidelines for implementing the management mechanism for labor, wages, and income for state-owned limited liability companies holding 100% of the charter capital.

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Pursuant to Decree No. 63/2001/NĐ-CP dated September 14, 2001 of the Government on the conversion of state-owned enterprises and enterprises of political organizations and social-political organizations into State-owned Limited Liability Companies, following the opinions of relevant ministries and sectors, the Ministry of Labor, Invalids and Social Affairs provides guidelines for implementing the management mechanism for labor, wages, and income as follows:

I. SCOPE AND APPLICABLE SUBJECTS

1- Scope of application:

The scope of this Circular applies to state-owned enterprises engaged in production and business activities that are decided by the State or political organizations, social organizations to hold 100% of the charter capital and are converted into State-owned Limited Liability Companies (referred to as Companies) in accordance with Decree No. 63/2001/NĐ-CP dated September 14, 2001 of the Government.

Organizations acting as representatives of the Owner or authorized as representatives of the Company's Owner according to Article 2 of Decree No. 63/2001/NĐ-CP mentioned above are referred to as the Owner.

2- Subjects of application:

- Members of the Board of Directors, including: Chairman of the Board of Directors, specialized and non-specialized members of the Board of Directors (for Companies with a Board of Directors);

- General Director (Director), Deputy General Director (Deputy Director, Chief Accountant).

- Company Chairman (for Companies without a Board of Directors).

- Workers employed under labor contracts within the Company.

II. MANAGEMENT MECHANISM FOR LABOR AND WAGES:

1- Management Mechanism for Labor:

a) Based on the volume and quality requirements of production and business, the Director is responsible for determining the planned number of workers to be recruited and registering with the Owner before implementation;

b) According to the registered planned number of workers, the Director has the authority to proactively recruit and enter into labor contracts in accordance with the provisions of labor laws;

c) Annually, the Director is responsible for evaluating the use of labor. If the actual number of workers recruited exceeds the need, causing workers to have no work or insufficient work, the Director must develop and implement final solutions; In cases where it is not possible to arrange work, the Chairman of the Board of Directors (for Companies with a Board of Directors) or the Company Chairman (for Companies without a Board of Directors) and the Director shall be responsible for resolving all employee benefits in accordance with labor laws from the unemployment assistance fund, reserve fund (excluding the wage reserve fund), welfare fund, bonus, post-tax profit, if still insufficient, funds may be drawn from production and business capital and accounted for in cost or circulation fees. After 2005, these funds cannot be drawn from production and business capital and cannot be accounted for in cost or circulation fees.

2- Management Mechanism for Wages:

2.1- Classification of Pay Grades and Allowances:

Based on current state regulations on wages, the Company implements the classification of pay grades and allowances as follows:

a) For the Board of Directors and the Company Chairman:

- Transfer of Pay Grades:

Appointed positions include: Chairman of the Board of Directors, specialized members of the Board of Directors, Company Chairman currently classified and receiving wages according to the election, voting, administrative, public service, enterprise management civil servant salary scales; professional and technical staff in enterprises; armed forces personnel will implement the transfer of pay grades according to the provisions of Section II of Circular No. 06/1998/TTLT-TCCP-BLDTBXH-BTC dated October 20, 1998 of the Joint Office of the Government Organizational Personnel Department - Ministry of Labor, Invalids and Social Affairs - Ministry of Finance.

- Position Allowance and Responsibility Allowance:

+ Members of the Board of Directors (except non-specialized members of the Board of Directors) and the Company Chairman are entitled to leadership position allowances as follows:

The position allowance coefficient is calculated relative to the minimum wage level. The minimum wage level is the basis for calculating position allowances, contributions and benefits for social insurance and health insurance.

Class 1: Applied to Companies classified as Class 1 enterprises;

Class 2: Applied to Companies classified as Class 2 enterprises;

Class 3: Applied to Companies classified as Class 3 enterprises or lower.

Non-specialized members of the Board of Directors are entitled to responsibility allowances as stipulated in Decree No. 25/CP dated May 23, 1993 of the Government, specifically:

* 0.3 times the minimum wage level, applicable to Companies classified as Class 1 and Class 2 enterprises.

* 0.2 times the minimum wage level, applicable to Companies classified as Class 3 enterprises or lower.

b) For the General Director (Director):

The General Director (Director), including Deputy General Director (Deputy Director) and company Chief Accountant are classified according to the civil servant management enterprise salary scale prescribed in Decree No. 26/CP dated May 23, 1993 of the Government and the Company's classification according to the enterprise classification standards prescribed and guided in Circular No. 17/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 and Circular No. 10/2000/TTLT-BLDTBXH-BTC dated April 4, 2000 of the Joint Office of the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance.

The Owner bases on the classification standards prescribed in Circular No. 17/1998/TTLT-BLDTBXH-BTC and Circular No. 10/2000/TTLT-BLDTBXH-BTC mentioned above to consider and decide on classifications from Class II downwards for Companies. For Companies classified as Class 1 or higher, there must be agreement with the Ministry of Labor, Invalids and Social Affairs - Ministry of Finance.

The transfer of pay grades for the General Director (Director), Deputy General Director (Deputy Director) and Chief Accountant is regulated in Section VI of Circular No. 17/1998/TTLT-BLDTBXH-BTC mentioned above.

c) For Workers:

- For professional and technical staff, they are classified according to the salary scales prescribed in Decree No. 25/CP and Decree No. 26/CP dated May 23, 1993 of the Government.

Staff holding positions (Department Heads or equivalent in the Company) are entitled to position allowances based on the Company's classification.

- For direct production and business workers, wages shall be set according to the wage scales and pay grades prescribed in Decree 25/CP and Decree 26/CP dated May 23, 1993, of the Government.

- The technical rank standards for skilled workers and job titles, as well as professional and vocational standards for civil servants, serve as the basis for setting wages, promoting ranks and categories, and utilizing labor in accordance with skill levels or professional and vocational requirements of production and business activities, as well as serving as a foundation for improving skills and vocational training for workers.

The company has the responsibility to establish and promulgate, and register with the Owner, the technical rank standards for skilled workers and job titles, as well as professional and vocational standards for civil servants, as follows:

+ Job titles and professional and vocational standards for civil servants shall be established in accordance with the guidelines set forth in Circular No. 04/1998/TT-BLDTBXH dated April 4, 1998, of the Ministry of Labor, War Invalids, and Social Affairs.

+ Temporary technical rank standards for skilled workers shall be implemented based on existing standards, and subsequently, the company will re-establish them following the guidance of the Ministry of Labor, War Invalids, and Social Affairs.

2.2- Payment of Wages:

To ensure accurate wage payment linked to the quantity, quality of labor, productivity, and efficiency, companies must comply with the following regulations:

a) Labor norms:

Based on the volume and quality of work, production organization, and labor organization, the company shall establish labor norms to determine the necessary number of workers, and to determine the unit price of wages for products and piecework wages. The establishment of specific norms shall be carried out according to the method of establishing labor norms as stipulated in Circular No. 14/LĐTBXH-TT dated April 10, 1997, of the Ministry of Labor, War Invalids, and Social Affairs.

When determining the number of workers based on the company's labor norms for production and business activities, it does not include members of the Board of Directors, the administrative staff assisting the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party cadres enjoying full-time salaries.

Once the labor norms have been established, the company must organize a trial application period of 1 to 3 months for new labor norms as well as adjusted norms. If the actual labor norm is less than 90% of the assigned norm, the labor norm must be reduced; if the actual labor norm exceeds 110% of the assigned norm, the labor norm must be increased. After the trial period, the company shall issue a decision to officially promulgate and register with the owner.

b) Unit wage rate:

- Determining average wages:

+ Minimum wage level (TLminet):

Based on production and business performance, the company selects a minimum wage higher than the general minimum wage set by the Government (currently 210,000 VND/month) to calculate the unit wage rate for products and piecework wages, but must ensure compliance with two conditions:

* Condition 1: The average wage increase per person must be lower than the average increase in labor productivity per person as stipulated and guided in Circular No. 06/2001/TT-BLDTBXH dated January 29, 2001, of the Ministry of Labor, War Invalids, and Social Affairs (calculated annually).

* Condition 2: The average profit per person calculated over 1 or 2 planned years (depending on whether the unit wage rate is stabilized for 1 or 2 years) must not be lower than the average profit realized per person in the corresponding recent years.

In special cases, companies producing and trading essential goods and services where the State has intervened or assigned tasks to stabilize the market, such as prices, supply-demand regulation; increasing depreciation rates higher than the prescribed framework compared to the previous year to recover capital quickly, modernize technology, expand production and business, may have a planned average profit per person lower than the average profit realized per person in the previous year or incur losses, thus exempting from applying the additional minimum wage adjustment factor when calculating the unit wage rate.

* Formula for calculating planned average profit per person:

Where:

- Pkh: Average profit per person planned for 2 years;

- Pkh1 and Pkh2: Planned profits for the first and second years. The method of determining planned profits is in accordance with current State regulations.

L1 and L2: Planned number of workers for the first and second years. If the labor norm is based on units of product, the number of workers (L1, L2) is the expected actual average number of workers to be used; if the labor norm is based on staffing levels, the number of workers (L1 and L2) is the staffing level.

* Formula for calculating the average profit per person realized in the previous year:

Where:

- P_2nt: Average profit per person realized in the two preceding years;

- Pth1 and Pth2: Profits realized in the first and second years of the preceding period. The method of determining realized profits is in accordance with current State regulations.

- Lnt1 and Lnt2: Number of workers in the two preceding years. If the labor norm is based on units of product, the number of workers (Lnt1, Lnt2) is the actual average number of workers used as directed in Circular No. 08/1998/TT-BLDTBXH dated May 7, 1998, of the Ministry of Labor, War Invalids, and Social Affairs; if the labor norm is based on staffing levels, the number of workers (Lnt1, Lnt2) is the staffing level of the two preceding years.

If the company establishes a unit wage rate for one year, only the average profit per person for that year is calculated.

+ Average job rank coefficient (Hch)

Based on production organization, labor organization, technological level, technical rank standards for skilled workers, professional and vocational standards for civil servants, and labor norms, the average job rank salary coefficient for all workers within the labor norm is determined to establish the unit wage rate.

+ Wage allowances included in the unit wage rate (Hpc)

Based on the provisions and guidelines of the Ministry of Labor, War Invalids, and Social Affairs, the objects and levels of allowances to be included in the unit wage rate to determine the average allowance (calculated using the weighted average method) are identified.

Currently, allowances included in the unit price of wages are: regional allowance; hazardous and dangerous allowance; responsibility allowance; night shift allowance; attraction allowance; mobility allowance; leadership position allowance; and safety bonus system (if applicable).

Overtime pay is a wage system, not an allowance system, and therefore is not included in the unit price of wages.

+ Average wage is calculated according to the following formula:

(AWpl = MWct x WCR + AL)

Where:

- AWpl: Average planned wage;

- MWct: Minimum wage level selected by the Company in accordance with sub-item b, point 2.2 above;

- WCR: Average job grade coefficient;

- AL: Allowances included in the unit price of wages.

- Planned wage fund:

The planned wage fund for calculating the unit price of wages of the Company is determined based on the following formula:

WPpl = [{AWpl x EFT}] x 12 months + IWP (1)

Where:

- WPpl: Planned wage fund

- AWpl: Average planned wage

- EFT: Established workforce, constructed in accordance with regulations and guidelines set forth in Circular No. 14/LDTBXH dated April 10, 1997 of the Ministry of Labor, Invalids and Social Affairs, excluding members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres.

- IWP: Wage fund of indirect staff who are not included in the comprehensive labor quota. Excluding the wage fund of members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres.

+ Planned wage fund for members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres is calculated according to the following formula.

WPplBOD = EFTm x (WCR + AL) x MWct x 12 months x A

Where:

- WPplBOD: Planned wage fund for members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres;

- EFTm: Number of members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy Director (Deputy Director, Chief Accountant) of the Company decided by the Owner and the number of full-time Party and mass organization cadres as prescribed.

- WCR: Average current wage coefficient;

- AL: Average current allowance coefficient;

- MWct: Minimum wage level selected by the Company in accordance with sub-item b, point 2.2 above.

- A: Adjustment factor for the wage fund determined by the Board of Directors, the Chairman of the Company, considering and selecting appropriately based on ensuring the conditions stipulated in sub-item b, point 2.2 above.

The planned wage fund WPplBOD must be submitted to the Owner for approval before implementation.

+ Total planned annual wage fund:

The total planned annual wage fund is not used to establish the unit price of wages but to prepare the overall wage fund plan of the Company, determined according to the following formula:

WT = WPpl + WPAL + WBS + WOT + WPplBOD

Where:

- WT: Total planned annual wage fund;

- WPpl: Planned annual wage fund for establishing the unit price of wages, guided by sub-item b above.

- WPAL: Planned fund for allowances and other benefits (if any) not included in the unit price of wages as prescribed (for example: diving allowance; aviation safety bonus...); this fund is calculated based on the number of workers entitled to such benefits as prescribed.

- WBS: Supplementary planned wage fund, only applicable to enterprises assigned the unit price of wages based on product units. The supplementary wage fund is paid to workers who are not involved in production but are entitled to wages under the prescribed system, which were not considered when establishing the labor quota, including: annual leave wage fund, personal leave wage fund, holiday wage fund, maternity leave wage fund, etc., as prescribed by the Labor Code.

- WOT: Planned overtime wage fund. The overtime wage fund applies only to additional production and business tasks outside the plan, which the Company does not build and include in the unit price of wages.

- WPplBOD: Planned wage fund for members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres;

- Method of establishing the unit price of wages:

Based on the nature, characteristics of production and business activities, organizational structure, and economic indicators linked to effective wage payment, the Company may choose one of two methods to establish the unit price of wages.

+ For companies that establish the unit price of wages based on product units (or converted products) determined by the following formula:

UPW = WH x LUP

Where:

- UPW: Unit price of wages (unit of measurement is VND/unit of physical goods);

- WH: Hourly wage. The hourly wage is calculated by dividing the average monthly planned wage by 26 days and then by 8 hours.

- LUP: Comprehensive labor input rate for each product unit or converted product (hours-person) established in accordance with regulations and guidelines set forth in Circular No. 14/LDTBXH-TT dated April 10, 1979 of the Ministry of Labor, Invalids and Social Affairs.

+ For companies that establish the unit price of wages based on revenue (or sales volume) or net income (revenue minus expenses without wages) or profit, determined by the following formula:

Where:

- UPW: unit price of wages (unit of measurement VND/1,000 VND)

- WPpl: planned annual wage fund, calculated according to the guidance at sub-item b above (formula 1).

- RPpl: planned revenue (or sales volume);

- CPpl (without wages): planned total expenses (excluding wages);

- NPpl: planned total profit.

- Decision on the unit price of wages:

After calculation and construction according to the guidelines, the Company decides on the wage unit price and records the profit target set by the owner as the basis for determining the actual wage fund in accordance with the provisions of this Circular.

The wage unit price must be registered with the owner before implementation.

c) Determining the actual wage fund based on production and business results:

c.1- In the case where the average realized profit per person equals the planned average profit per person.

Based on the level of completion of product plans or revenue and the wage unit price, the actual wage fund of the Company shall be determined as follows:

Vth = (ĐGV x Csxkd) +Vpc + Vbs + Vtg + VkhHĐQT

Where:

- Vth: Actual wage fund

- ĐGV: Wage unit price decided by the Company and registered with the Owner;

- Csxkd: Production and business indicator according to the total goods produced or revenue (sales) or net income (total income minus total expenses without wages) realized or realized profit.

- Vpc: Fund for additional allowances and other benefits (if any) not included in the unit price (for example: diving allowance; safety bonus...), calculated based on the actual number of employees benefiting from each benefit.

- Vbs: Supplementary wage fund, only applicable to Companies assigned a wage unit price per unit of product. The supplementary wage fund pays for the actual time of employees in the Company who do not participate in production but still receive wages according to the prescribed regulations, including: annual leave, personal leave, public holidays, Tet holidays, maternity leave, meetings, training... as stipulated by the Labor Code.

- Vtg: Overtime wage fund calculated based on the volume and actual overtime hours.

- VkhHĐQT: Wage fund for members of the Board of Directors, the supporting staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company and Party cadres and mass organizations receiving specialized salaries, equal to the planned wage fund approved by the Owner.

c2- In the case where the average realized profit per person exceeds the planned average profit per person:

In addition to the actual wage fund of the Company determined according to the provisions of paragraph c1 above, the additional profit due to higher realized profit than planned profit, the Company may allocate from the additional profit after paying corporate income tax to supplement the following funds:

- Allocate up to three times the planned wage fund (VkhHĐQT) of these individuals to directly distribute and reserve for the next year for members of the Board of Directors, the supporting staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company and Party cadres and mass organizations receiving specialized salaries.

- Allocate up to a maximum of three months' average actual wage of the Company to distribute further to employees receiving wages from the unit price and reserve the wage fund for the next year.

The determination of the Company's realized profit shall be in accordance with the current regulations of the State.

c3- In the case where the average realized profit per person is lower than the planned average profit per person:

The Company must reduce the wage fund due to the average realized profit per person being lower than the planned average profit per person assigned, but the maximum reduction shall result in the actual wage fund being equal to the wage calculated based on the actual average number of employees used with the average wage rate of the Company and the minimum wage rate set by the State.

+ For the actual wage fund based on the unit price:

The Company chooses one of the two methods to reduce the wage fund as follows:

Method 1: The actual wage fund is reduced absolutely and calculated using the following formula:

Vth = Vthdg - {(Pkh – Pth ) x Ldb}+ Vpc + Vbs + Vtg

Where:

- Vth: Actual wage fund after reduction;

- Vthdg: Actual wage fund based on the unit price before reduction;

- Pkh: Average planned profit per person for one or two years calculated according to the method specified in paragraph b, point 2.2;

- Pth: Average realized profit per person for one or two years calculated according to the method specified in paragraph b, point 2.2;

- Ldb: Authorized labor force (for Companies setting labor norms by authorized method) or the actual average projected labor force of the planning year for Companies setting labor norms by unit of product;

- Vpc: Fund for additional allowances and other benefits (if any) not included in the unit price (for example diving allowance; safety bonus...) calculated based on the actual number of employees benefiting from each benefit.

- Vbs: Supplementary wage fund, only applicable to Companies assigned a wage unit price per unit of product. The supplementary wage fund pays for the actual time of employees in the Company who do not participate in production but still receive wages according to the prescribed regulations, including: annual leave, personal leave, public holidays, Tet holidays, maternity leave, meetings, training... as stipulated by the Labor Code;

- Vtg: Overtime wage fund calculated based on the volume and actual overtime hours but not exceeding the provisions of the Labor Code.

Method 2: The actual wage fund is reduced according to the principle that for every 1% decrease in the average realized profit per person compared to the planned average profit per person, the actual wage fund of the Company is reduced by 0.35%, and is calculated using the following formula:

Where Vth, Vthdg, Pkh, Pth, Vpc, Vbs, Vtg: as defined in Method 1 above.

Example: Company A had the following actual indicators in 2002:

The actual wage fund of Company A in 2002 can choose to settle as follows:

According to Method 1:

- The fund for wages based on unit price after reduction in 2002 is:

Vth = 25 billion VND - (6 million VND/year - 5 million VND/year) x 500 people = 24.5 billion VND

- The actual wage fund settled in 2002 is:

(24.5 billion VND + 0.3 billion VND) = 24.8 billion VND.

According to method 2:

- The wage fund implemented based on unit price after reduction in 2002 is:

- The actual wage fund settled in 2002 is:

23.54 billion VND + 0.3 billion VND = 23.84 billion VND.

- Reduction of the wage fund implementation of members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party and mass organization cadres receiving specialized salaries when the average realized profit per person is lower than the plan:

The reduction principle is: For every 1% decrease in the average realized profit per person compared to the planned average profit per person, there will be a 0.5% reduction in the allocated wage fund plan and it is determined according to the following formula:

Where:

- VthHĐQT: The wage fund implementation of members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party and mass organization cadres receiving specialized salaries.

- WPplBOD: Planned wage fund for members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and full-time Party and mass organization cadres;

- Pkh_: Planned average profit per person for one or two years calculated according to the method specified in subpoint b, point 2.2;

- Pth: Average realized profit per person for one or two years calculated according to the method specified in paragraph b, point 2.2;

Example: Also from the above example, assuming the wage fund plan for 2002 of members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party and mass organization cadres receiving specialized salaries is 500 million VND. The wage fund implementation is reduced due to not achieving the planned average profit per person.

VthHĐQT = 500 million VND – 500 million VND x (0.167 x 0.5)

= 500 million VND – 41.75 million VND = 458.25 million VND

c4- For companies that have not established or registered labor norms, unit wage prices, or incurred losses, the wage fund implementation can only be settled by the total number of actual workers used with a wage rate coefficient decided by the owner and the national minimum wage set by the State.

d) Wage distribution regulations and salary payment rules.

- Wage distribution regulations:

To effectively implement wage payments based on product unit prices, piecework wages, linking wages with productivity, quality, and production and business profits of each unit, department, and individual worker under management, companies must establish and issue the company's wage distribution regulations according to the guidelines in Circular No. 4320/LDTBXH-TL dated December 29, 1998, issued by the Ministry of Labor, Invalids, and Social Affairs. The wage distribution and payment rules apply to all workers of the company, except for members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party and mass organization cadres receiving specialized salaries.

The wage distribution regulation is decided by the Board of Directors or the Chairman of the company and the General Director (Director) after discussing with the same-level trade union committee, disseminated to each worker, and registered with the owner.

The wage distribution regulation for each department and individual worker according to the regulation depends on productivity, quality, work efficiency, and performance of each department and individual worker, without distributing equally. For highly skilled workers with high expertise who play important roles and make significant contributions to completing production and business tasks, their wages and income should be commensurate. The wage and income gap between service and simple laborers and highly skilled workers within the company should be at least five times and up to twelve times.

For members of the Board of Directors, the support staff of the Board of Directors, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party and mass organization cadres receiving specialized salaries, the wage distribution and bonus regulations are stipulated by the Board of Directors.

- Salary Payment:

To ensure that salary payments do not exceed the unit wage price registered by the company with the owner and to guarantee the profit target, depending on specific conditions and the ability to achieve production and business plans, the company sets monthly temporary advance payment levels for workers appropriately to avoid exceeding the settled actual wage fund when finalizing accounts. In cases where expenses exceed the limit, they must be recovered or deducted from the next year's wage fund.

III- MANAGEMENT OF WAGES AND INCOME:

1- The owner or the organization authorized as the representative of the owner of the company has the responsibility:

- To disseminate and guide companies under management to fully understand and properly implement labor, wage, and income systems as prescribed by the State.

- To inspect and supervise the implementation of labor policies and wage systems of companies;

- To review the registration of companies regarding labor plans; recruitment and training regulations; technical grade standards for workers; job titles and professional qualification standards for civil servants; labor norms; unit wage prices; wage distribution and bonus regulations; and wage promotion regulations of companies under management.

If unreasonable practices or contents contrary to regulations are discovered, the owner has the responsibility to instruct and require companies to modify and adjust them appropriately;

- To assign the staffing of the support staff of the Board of Directors;

- At the beginning of each first quarter of the year, review and approve the profit target indicators for companies to establish the unit price of wages, and no later than the end of each first quarter of the year, approve the planned wage fund for members of the Board of Directors, the Board of Directors' support staff, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company.

- In the second quarter of each year, compile and report to the Ministry of Labor - Invalids and Social Affairs on the situation of labor management, wages, and income of the previous year for companies under their management (model number 1a and 1b).

- Strengthen and enhance the team of specialized cadres, civil servants, and employees responsible for labor and wage work, ensuring they have the capacity to perform tasks according to requirements and legal regulations.

2- Responsibilities of the Company:

- Determine needs and develop annual labor plans to register with the owner as a basis for recruitment or resolution of unemployment in accordance with regulations;

- Develop profit plans to submit to the owner for approval as a basis for determining the unit price of wages;

- In the first quarter of each year, develop and submit to the owner for approval the wage fund for members of the Board of Directors, the Board of Directors' support staff, the Chairman of the Company, General Director (Director), Deputy General Director (Deputy Director, Chief Accountant) of the Company, and Party cadres, mass organizations receiving specialized salaries (according to model number 2).

- Exchange opinions with the same-level trade union organization when developing, issuing, and registering with the owner.

+ Recruitment regulations;

+ Technical grade standards for workers; job titles, professional qualification standards for employees;

+ Labor quotas;

+ Unit price of wages (registered with the owner according to model number 3a or 3b);

+ Wage distribution regulations, bonus distribution;

+ Regulations on salary grade and rank increases;

- Implement the full recording of monthly wages and income of workers in the Company's payroll book in accordance with Decision No. 238/LĐTBXH-QĐ dated April 8, 1997, and Circular No. 15-LĐTBXH-TT dated April 10, 1997, of the Ministry of Labor - Invalids and Social Affairs as a basis for inspection and auditing of wage implementation, income, and individual income tax payment in accordance with state regulations;

- Implement social insurance and health insurance contributions for workers in accordance with state regulations.

- In the first quarter of each year, report on the implementation of labor, wages, and income of the previous year to the owner (model number 4).

- Do not recruit additional new workers if the Company does not have an annual labor plan registered with the owner.

+ Do not implement the promotion system for wage grades and ranks until technical grade standards for workers; job titles, professional qualification standards for employees are established, issued, and registered;

IV- IMPLEMENTATION

1- Based on the guidance content of this Circular, relevant Ministries managing industries and sectors, provinces, centrally governed cities, Departments of Labor - Invalids and Social Affairs, and owners shall promptly direct the implementation so that companies comply with state regulations on labor policies, wage management systems, and income.

2- This Circular takes effect from June 1, 2002.

During the implementation process, if there are any difficulties, it is recommended that relevant Ministries, People's Committees of provinces and centrally governed cities, owners, and companies reflect these issues to the Ministry of Labor - Invalids and Social Affairs for consideration and resolution.