DECREE NO. 114/2002/ND-CP PROVIDES DETAILED REGULATIONS AND GUIDELINES FOR IMPLEMENTATION OF CERTAIN PROVISIONS OF THE LABOR CODE ON WAGES

DECREE OF THE GOVERNMENT

Details and guidance on implementing certain provisions of the Labour Code regarding wages

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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; Law Amending and Supplementing Certain Articles of the Labor Code on April 2, 2002;

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

DECREE:

PART I

GENERAL PROVISIONS

Article 1||| This Decree provides details and guidance on implementing certain provisions of the Labour Code and the Law Amending and Supplementing Certain Provisions of the Labour Code (hereinafter referred to as the amended Labour Code) concerning wages.

Article 2. According to Articles 2 and 3 of the Labour Code, the subjects and scope of application of the wages prescribed in this Decree are workers employed under labour contracts in the following organizations:

1. Enterprises established and operating under the State Enterprise Law;

2. Enterprises established and operating under the Enterprise Law;

3. Enterprises established and operating under the Law on Foreign Investment in Vietnam;

4. Enterprises of political organizations and political-social organizations;

5. Public service units operating under economic accounting systems;

6. Cooperatives, farms, households, and individuals using labour;

7. Foreign or international agencies or organizations stationed in Vietnam that employ Vietnamese workers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

The enterprises, agencies, and organizations mentioned above shall be referred to as enterprises and agencies for short.

Article 3. According to Article 4 of the Labour Code, the subjects and scope not subject to the application of wages prescribed in this Decree include:

1. Persons falling within the scope of application of the Civil Servants Ordinance;

2. Persons belonging to political organizations and political-social organizations operating under their respective regulations;

3. Cooperative members according to the Law on Cooperatives;

4. Officers, non-commissioned officers, soldiers, professional military personnel, and officials working without a labour contract in the armed forces.

Chapter II

MINIMUM WAGE, PAY SCALE, PAY ROLL, LABOUR QUOTA

Article 4.

1. The minimum wage level as stipulated in Article 56 of the Labour Code and Clause 3 of Article 132 of the amended Labour Code is determined based on the supply and demand of labour, economic capacity, and living cost index during each period.

The Ministry of Labour, Invalids and Social Affairs, after consulting with the Vietnam General Confederation of Labour, representatives of employers, and relevant ministries and sectors, shall submit to the Government for the announcement of the general minimum wage; the minimum wage for Vietnamese workers employed in foreign-invested enterprises under the Law on Foreign Investment in Vietnam, and foreign or international agencies or organizations in Vietnam.

2. Depending on business conditions and capabilities, enterprises and agencies are permitted to apply a higher minimum wage than the national minimum wage as a basis for paying wages to workers.

Article 5. According to Article 57 of the amended Labour Code, the pay scale and labour quota are defined as follows:

1. Principles for establishing the pay scale and pay roll.

a) The pay scale and pay roll are established for managerial workers, technical and vocational workers, and directly productive and business workers based on their job and trained profession;

b) The multiplier of the pay scale and pay roll is the ratio of the highest salary level of workers with the highest management, technical, and vocational qualifications to those with the lowest qualifications;

c) The number of levels in the pay scale and pay roll depends on the complexity of management and the required job grade. The gap between adjacent salary grades must ensure incentives for improving technical and vocational qualifications, talents, and experience accumulation;

d) The first-level salary of the pay scale and pay roll must be higher than the national minimum wage. The salary for hazardous, dangerous, and extremely hazardous jobs must be higher than the salary for normal working conditions.

2. Principles for establishing the labour quota:

a) The labour quota is established based on job grade and is consistent with worker grades; ensuring improved working conditions, technological innovation, and compliance with labour standards;

b) The labour quota level is set at the average advanced level, ensuring that most workers can achieve it without exceeding the standard working hours as stipulated by law;

c) A new or revised labour quota must be piloted for a maximum of three months before being officially implemented.

3. Employers are responsible for establishing the pay scale, pay roll, and labour quota according to these principles, after consulting with the Trade Union Committee and publicly announcing them in the enterprise or agency. The pay scale must be registered with the provincial or centrally-administered city labour administration authority where the enterprise or agency is headquartered.

4. The Ministry of Labour, Invalids and Social Affairs, after consulting with the Vietnam General Confederation of Labour, shall submit to the Government for the establishment of the pay scale and pay roll applicable in state-owned enterprises; guiding methods for building the pay scale, pay roll, labour quota, and remuneration regulations applicable in enterprises and agencies.

Article 6. The pay scale and pay roll of enterprises and agencies serve as the basis for:

1. Agreeing on wages when signing labour contracts;

2. Determining unit wage rates, implementing wage increment systems agreed upon in labour contracts and collective labour agreements;

3. Paying and enjoying social insurance and health insurance benefits as provided by law;

4. Paying wages during suspension of work and other benefits as provided by labor law;

5. Resolving other benefits as agreed by both parties and as provided by labour laws.

Chapter III

WAGE PAYMENT REGIME AND BONUSES

Article 7. The form of wage payment as stipulated in Article 58 of the Labour Code is defined as follows:

1. Wage payment by time is paid to workers based on actual working time, specifically as follows:

a) Monthly wage is paid for a month's work based on the labour contract;

b) Weekly wage is paid for a week's work based on the monthly wage multiplied by 12 months and divided by 52 weeks;

c) Daily wage is paid for a day's work based on the monthly wage divided by the standard number of working days in a month as stipulated by law, but not exceeding 26 days.

d) Hourly wage shall be paid for a determined hour of work based on the daily wage divided by the standard number of hours as stipulated in Article 68 of the Labor Code.

2. Piece-rate wages shall be paid to workers based on the quantity and quality of products produced.

3. Contractual wages shall be paid to workers according to the volume and quality of work required to be completed.

4. The Ministry of Labor, Invalids, and Social Affairs shall guide employers in paying wages according to the forms prescribed in Clause 1, Clause 2, and Clause 3 of this Article.

Article 8In cases of special circumstances as provided for in Clause 1 of Article 59 of the Labor Code, which are situations due to natural disasters, fires, or other force majeure reasons as defined in Point d, Clause 1 of Article 38 of the Labor Code, after being amended and supplemented, if employers have taken all possible measures but cannot resolve them, they may be allowed to pay wages late, but not exceeding one month, and must compensate workers as follows:

1. If the time of delayed payment is less than 15 days, then there is no need for compensation.

2. If the time of delayed payment is 15 days or more, then a sum of money at least equal to the amount of delayed payment multiplied by the interest rate of non-term savings deposits of commercial banks where the enterprise or agency has opened an account must be compensated at the time of wage payment.

Article 9. The deduction from the worker's wage as provided for in Clause 1 of Article 60 of the Labor Code shall be as follows:

Based on the monthly wage received by the worker after social insurance contributions, health insurance contributions, and income tax payments for high-income earners (if applicable), the employer shall gradually deduct the amounts temporarily advanced as stipulated in Articles 12 and 13 of this Decree and the material damage compensation as provided for in Article 89 of the Labor Code.

Article 10. The payment of wages when workers work overtime or night shifts as amended and supplemented in Article 61 of the Labor Code shall be as follows:

1. If wages are paid based on time, workers shall be paid overtime wages when working beyond the standard hours.

2. If wages are paid based on piece-rate or contractual basis, workers shall be paid overtime wages when the employer requests additional quantities or volumes of products or work outside the standard hours.

3. Workers working overtime as provided for in Clause 1 and Clause 2 of this Article shall be paid overtime wages according to the hourly wage rate or actual wage rate of the job being performed as follows:

a) On regular days, at least 150%.

b) On weekly rest days as provided for in Article 72 of the Labor Code, at least 200%.

c) On public holidays or paid rest days as provided for in Articles 73, 74, 75, and 78 of the Labor Code, at least 300%.

4. Workers working night shifts as provided for in Article 70 of the Labor Code shall be paid an additional amount of at least 30% of the hourly wage rate or the wage rate of the day shift job. If working overtime during night shifts, workers shall also be paid overtime wages.

5. Wages paid to workers for working overtime or night shifts shall be calculated in accordance with the wage payment form prescribed in Article 7 of this Decree.

Article 11. The awarding of bonuses to workers employed by enterprises as amended and supplemented in Article 64 of the Labor Code shall be as follows:

1. For state-owned enterprises, based on annual production and business results and the degree of completion of tasks by workers, the enterprise shall establish a bonus fund from post-tax profits to reward workers employed by the enterprise. The establishment of the bonus fund shall be carried out in accordance with the guidelines of the Ministry of Finance.

2. For enterprises belonging to other economic sectors, based on annual production and business results and the degree of completion of tasks by workers, the employer shall award bonuses to workers employed by the enterprise based on labor contracts and collective labor agreements agreed upon by both parties.

3. Enterprises shall be responsible for issuing Reward Regulations to implement for workers after consulting with the Trade Union Committee. The Reward Regulations must be publicly announced within the enterprise.

Article 12. Advance payment of wages to workers as provided for in Clause 1 and Clause 2 of Article 67 of the Labor Code shall be as follows:

1. When the worker or their family encounters difficulties, the worker may receive an advance payment of wages, but it must be at least one month's salary. The method of advance wage payment shall be agreed upon by both parties, but no interest shall be charged on the advance payment.

2. When workers must temporarily stop working for over one week to fulfill civic duties, they shall receive an advance payment of wages corresponding to the number of days temporarily off work and shall be deducted from their wages in accordance with labor laws.

Article 13. Advance payment of wages to workers who are detained or imprisoned as provided for in Clause 3 of Article 67 of the Labor Code shall be as follows:

1. Workers who are detained or imprisoned due to violations related to the labor relationship between the employer and the worker shall receive a temporary advance payment of 50% of their wage according to the previous month's labor contract, including grade and position wages, regional allowances, and position allowances (if applicable) during the period of detention or imprisonment.

2. Upon completion of the detention or imprisonment period, if it is due to the fault of the worker, the worker does not have to repay the advance payment made under Clause 1 of this Article. If it is due to the fault of the employer, the employer must pay the full wage according to the labor contract and social insurance contributions as stipulated by law during the period of detention or imprisonment; if it is due to the fault of the investigative authority, that authority must refund the employer the advance payment made to the worker under Clause 1 of this Article and compensate the worker for the remaining wages and social insurance contributions as stipulated by law during the period of detention or imprisonment according to the wage rate stated in the labor contract.

3. If a worker is temporarily detained for offenses unrelated to their labor relationship, the employer is not required to advance wages to the worker.

Article 14.

1. Annual leave pay, holiday pay, and paid leave for personal matters shall be calculated based on time-based wages, which equal the monthly wage stipulated in the labor contract of the preceding month, including rank salary, position salary, regional allowance, and position allowance (if applicable), divided by the standard number of working days in that month according to the law, but not exceeding 26 days, multiplied by the number of days of leave as prescribed.

2. During a work shift, if work is stopped for two hours or more as provided for in Clause 1, Article 62 of the Labor Code, then compensation for停工时间工资将按照本决定第16条的规定支付。

Article 15. The basis for calculating severance benefits, unemployment assistance, compensation for unilateral termination of a labor contract in violation of the law, and compensation for occupational accidents and diseases is the wage stipulated in the labor contract, averaged over the six consecutive months immediately preceding the occurrence of the event, including rank salary, position salary, regional allowance, and position allowance (if applicable).

Article 16. Wages paid during the periods specified in Articles 53, 62, and 92 of the Labor Code are based on the wage stipulated in the labor contract of the preceding month and are calculated in accordance with the time-based payment methods prescribed in Clause 1, Article 7 of this Decree.

Chapter IV

OTHER PROVISIONS

Article 17. Apprentices and trainees as provided for in Clause 2, Article 23 of the Labor Code, if they directly produce products, shall be paid wages. The wage level shall be agreed upon by both parties but shall not be less than 70% of the unit price of wages or the wage of workers performing the same job.

In cases where the duration of apprenticeship or training exceeds the commitment made in the apprenticeship or training contract, the employer must pay the full wage corresponding to the work performed by the apprentice or trainee.

Article 18. Female workers as provided for in Article 111 of the Labor Code, if performing the same work as male workers, shall be paid the same wages.

Article 19. Young workers as provided for in Article 121 of the Labor Code, if performing the same work as adult workers, shall be paid the same wages.

Article 20. Workers who are elderly as provided for in Article 123 of the Labor Code, if their working hours are reduced as stipulated, shall be paid their full wages.

Article 21. Workers who are disabled as provided for in Article 125 of the Labor Code, if performing the same work as non-disabled workers, shall be paid the same wages.

Article 22. Workers with high professional and technical qualifications as provided for in Article 129 of the Labor Code shall be paid wages through agreements that are commensurate with their contribution to the business efficiency of the enterprise or organization. Employers shall establish wage regulations to attract such workers.

Article 23. Vietnamese citizens working abroad under the forms prescribed in Article 134a of the Labor Code, as managed and paid by Vietnamese enterprises or organizations, shall be paid part of their wages in the currency of the host country or convertible foreign currency during their period of work abroad.

Article 24. Based on the provisions of Article 136 of the Labor Code, the Ministry of Labor, Invalids, and Social Affairs shall coordinate with relevant ministries and agencies to submit to the Government decisions regarding certain wage and allowance systems for workers engaged in special professions or jobs in the arts sector.

Chapter V

IMPLEMENTING PROVISIONS

Article 25. The Ministry of Labor, Invalids, and Social Affairs shall be responsible for guiding the implementation of this Decree; guiding foreign organizations or international organizations operating within Vietnam, cooperatives, farms, households, and individuals employing workers to apply certain provisions of this Decree appropriately.

Article 26. This Decree takes effect from January 1, 2003, and replaces Decree No. 197/CP dated December 31, 1994, of the Government detailing and guiding the implementation of certain provisions of the Labor Code concerning wages.

Article 27. Ministers, The Minister, Heads of Ministries equivalent to Ministries, Heads of Government Agencies, Chairpersons of People's Committees of provinces and centrally governed cities are responsible for implementing this Decree./.