Circular No. 13/2003/TT-BLDTBXH guiding the implementation of certain provisions of Government Decree No. 114/2002/NĐ-CP dated December 31, 2002 on wages for workers employed in enterprises operating under the Enterprise Law.

CIRCULAR

Guidelines for Implementing Certain Provisions of Decree No. 114/2002/NĐ-CP dated December 31, 2002 of the Government on Wages for Workers Employed in Enterprises Operating Under the Enterprise Law

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Implementing Decree No. 114/2002/NĐ-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain provisions of the Labor Code on wages, after exchanging opinions with relevant ministries and sectors, the Ministry of Labor - Invalids and Social Affairs provides guidelines on wages for workers employed in enterprises operating under the Enterprise Law as follows:

I. Scope and Applicability

The scope and applicability of wages as prescribed in this Circular apply to workers employed under labor contracts in the following organizations:

1. Enterprises established and operating under the Enterprise Law, including:

a) Limited liability companies;

b) Joint-stock companies;

c) Partnership companies;

d) Private enterprises.

2. Organizations and individuals hiring workers, including: cooperatives, farms, production cooperatives, households, individuals, and other organizations.

The above enterprises, companies, organizations, units, and individuals are referred to collectively as enterprises.

II. Minimum Wage

The level of minimum wage as stipulated in Article 4 of Decree No. 114/2002/NĐ-CP is specified as follows:

1. The minimum wage applicable from January 1, 2003 for workers performing the simplest work (without training) under normal working conditions in enterprises shall not be lower than the general minimum wage of 290,000 VND/month as prescribed in Decree No. 03/2003/NĐ-CP dated January 15, 2003 of the Government.

When the State adjusts the general minimum wage, it shall be implemented according to the new regulations.

2. Based on labor productivity and business efficiency, enterprises have the right to set a higher minimum wage than the general minimum wage prescribed by the Government as a basis for paying wages to workers.

III. Pay Scale and Allowances

1. Pay scale and salary table as stipulated in Clause 1 and 3, Article 5 of Decree No. 114/2002/NĐ-CP are specified as follows:

a) Enterprises are responsible for establishing pay scales, salary tables, technical grade standards for skilled workers, job titles, and professional standards for civil servants as the basis for signing labor contracts and collective labor agreements, determining the wage fund, paying salaries, and resolving other benefits for workers.

The establishment of pay scales and salary tables must comply with the principles stipulated in Clause 1, Article 5 of Decree No. 114/2002/NĐ-CP. Enterprises may choose the method at Appendix 1 attached to this Circular or apply other appropriate methods to establish pay scales and salary tables.

b) When establishing and promulgating pay scales and salary tables, enterprises must seek the opinions of the Trade Union Committee or the Provisional Trade Union Committee and publicly announce them within the enterprise before implementation.

c) Enterprises must register their pay scale and salary system with the provincial or centrally-administered city labor management authority where the enterprise's main office is located within one month from the date the pay scale and salary table are announced and implemented. The dossier includes a request letter accompanied by the pay scale and salary table system established by the enterprise.

2. Salary Allowances:

In addition to establishing pay scales and salary tables as prescribed above, enterprises have the right to stipulate salary allowances or apply salary allowance systems prescribed by the Government for state-owned enterprises to pay workers.

IV. Work Standards

Work standards as stipulated in Clause 2 and 3, Article 5 of Decree No. 114/2002/NĐ-CP are specified as follows:

1. Enterprises are responsible for establishing a work standard system to determine labor plans, organize and utilize labor, and pay wages to workers. The establishment of work standards must comply with the principles stipulated in Clause 2, Article 5 of Decree No. 114/2002/NĐ-CP.

2. The establishment of work standards is carried out as follows:

a) Enterprises establish a Work Standard Council to organize the establishment or review, adjust, and supplement the work standard system applied in the enterprise. The council consists of the enterprise director, some members with sufficient expertise and professional qualifications selected by the director, and representatives of the Trade Union Committee or the Provisional Trade Union Committee.

b) Based on the actual organization of production and labor, enterprises select the work standard establishment method at Appendix 2 attached to this Circular or apply other appropriate work standard establishment methods to establish work standards that comply with the aforementioned principles.

c) Annually, enterprises organize an evaluation of the implementation of work standards to modify and supplement them appropriately with the organization of production and labor. If the implemented work standard is lower than 5% or higher than 15% compared to the assigned standard, the enterprise must review and adjust it within three months to make it suitable.

3. When establishing, adjusting, and supplementing work standards, enterprises must seek the opinions of the Trade Union Committee or the Provisional Trade Union Committee and publicly announce them within the enterprise.

V. Wage System

1. Wage Forms:

Wage forms as stipulated in Article 7 of Decree No. 114/2002/NĐ-CP are specified as follows:

a) Time-based wages (monthly, weekly, daily, or hourly), applicable to those engaged in management, professional, technical, and vocational work; those engaged in jobs along production lines, machinery, and equipment, and those whose time-based wages are more effective than other wage forms.

b) Piece-rate wages, applicable to individual or group workers based on the completion of quantity and quality of products assigned.

c) Contract-based wages, applicable to individual or group workers based on the volume, quality of work, and time required to complete it.

Based on the aforementioned forms of wage payment, enterprises select a form of wage payment that is suitable for the nature of the work and production and business conditions, linking wages to work results, ensuring incentives for workers to improve efficiency and labor productivity. The selection or change of wage payment forms must be reflected in the labor contract and collective labor agreement.

2. Payment for overtime work:

Payment for overtime work when employees work overtime according to Clause 1, 2, and 3, Article 10, Decree No. 114/2002/NĐ-CP is specified as follows:

a) For employees paid by time, if they work overtime beyond the standard hours, the enterprise must pay overtime wages calculated as follows:

Where:

- The actual hourly wage payable is determined based on the actual monthly wage of the employee working overtime (excluding overtime wages, additional wages for night shifts, bonuses, and other income not constituting wages) divided by the actual number of hours worked in the month (excluding overtime hours), but not exceeding 208 hours for normal working conditions or 156 hours for particularly arduous, toxic, and dangerous working conditions. In the case of daily wages, the actual hourly wage payable is determined based on the actual wage of the day of work (excluding overtime wages, additional wages for night shifts, bonuses, and other income not constituting wages) divided by the actual number of hours worked in the day (excluding overtime hours), but not exceeding 8 hours for normal working conditions or 6 hours for particularly arduous, toxic, and dangerous working conditions;

- The rate of 150% applies to overtime hours on regular days;

- The rate of 200% applies to overtime hours on weekly rest days as stipulated in Article 72 of the Labor Code;

- The rate of 300% applies to overtime hours on holidays and rest days with pay (this 300% rate already includes wages for time off with full pay under Articles 73, 74, 75, and 78 of the Labor Code);

- The hours of overtime work are regulated in Decree No. 109/2002/NĐ-CP dated December 27, 2002, of the Government amending and supplementing certain articles of Decree No. 195/CP dated December 31, 1994, of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding working hours and rest periods.

If overtime work is arranged for compensatory rest, the enterprise only has to pay the difference of 50% of the actual hourly wage payable for the ongoing job if it is on a regular day; 100%, if it is on a weekly rest day; 200%, if it is on a holiday or rest day with pay.

Example 1. The actual monthly wage and other income of Mr. A (working in normal working conditions with the actual number of working days equal to the number of working days chosen by the enterprise, which is 24 days/month) is 1,013,600 VND (including bonus of 150,000 VND; additional wage for night shifts of 57,600 VND; mid-shift meal allowance of 180,000 VND; travel allowance of 50,000 VND):

- The actual monthly wage (including basic wage and wage allowances) is:

1,013,600 VND - (150,000 VND + 57,600 VND + 180,000 VND + 50,000 VND) = 576,000 VND.

- The actual hourly wage payable is:

576,000 VND ÷ (24 days × 8 hours) = 3,000 VND.

- The wage for one hour of overtime on a regular day is:

3,000 VND × 150% × 1 hour = 4,500 VND.

If Mr. A is arranged for compensatory rest for overtime work, the enterprise only has to pay the difference compared to the wage of the ongoing job, for one hour:

4,500 VND - 3,000 VND = 1,500 VND.

Example 2. The actual hourly wage payable of Mr. A as in Example 1, if he works one hour of overtime on a weekly rest day, will be paid 6,000 VND (3,000 VND × 200% × 1 hour). If Mr. A is arranged for compensatory rest for overtime work, the enterprise only has to pay the difference compared to the wage of the ongoing job on a regular day, for one hour, which is 3,000 VND (6,000 VND - 3,000 VND);

Example 3. The actual hourly wage payable of Mr. A as in Example 1, if he works one hour of overtime on a holiday or rest day with pay, will be paid 9,000 VND (3,000 VND × 300% × 1 hour). If Mr. A is arranged for compensatory rest for overtime work, the enterprise has to pay the difference compared to the wage of the ongoing job on a regular day, for one hour, which is 6,000 VND (9,000 VND - 3,000 VND).

b) For employees paid by piecework, if outside the standard hours, the enterprise requires additional quantity or volume of products or work beyond the quota or unexpected work not included in the annual production and business plan, and the enterprise needs to work overtime, then the unit price of wages for the additional products or work is paid at 150% of the unit price of wages for products made within the standard hours, if working overtime on a regular day; at 200%, if working overtime on a weekly rest day; at 300%, if working overtime on a holiday or rest day with pay.

Example 4. The unit price of wages for product B made within the standard hours is 1,000 VND/unit, in the case where the enterprise requires additional work beyond the quota and standard hours, the unit price of wages for the additional work is paid as follows:

- 1,500 VND/unit, if the product is made during overtime on a regular day (1,000 VND × 150%);

- 2,000 VND/unit, if the product is made during overtime on a weekly rest day (1,000 VND × 200%);

- 3,000 VND/unit, if the product is made during overtime on a holiday or rest day with pay (1,000 VND × 300%).

3. Payment for night shift work:

The wage of employees working night shifts according to Clause 4, Article 10, Decree No. 114/2002/NĐ-CP is specified as follows:

a) For employees paid by time, if they work night shifts, the enterprise must pay wages for night shift work calculated as follows:

Where:

- The actual hourly wage payable is calculated according to point a, item 2 above;

- Level 130% includes the actual hourly wage for daytime work and 30% of the actual hourly wage for nighttime work;

- The hours of nighttime work as prescribed in Article 6 of Decree No. 195/CP dated December 31, 1994 of the Government shall be from 10 PM of the previous day to 6 AM of the following day for provinces and cities north of Thua Thien-Hue; from 9 PM of the previous day to 5 AM of the following day for provinces and cities south of Da Nang;

Example 5. If the actual hourly wage for daytime work is 2,000 dong, then if the worker works at night, the actual hourly wage for nighttime work will be:

2,000 dong x 130% x 1 hour = 2,600 dong.

b) For workers paid by piece rate:

Example 6. If the unit price of wages for product C made during standard daytime hours is 1,000 dong, then the unit price of wages for that product when made at night is 1,300 dong (1,000 dong x 130%), and the wage is calculated based on the quantity of products made at night.

c) In cases where workers work overtime at night, the overtime wage is calculated as follows:

- For workers paid by time:

Example 7. If a worker working at night for 1 hour receives 2,600 dong (Example 5), then for nighttime overtime on regular days, 1 hour would be paid as:

2,600 dong x 150% x 1 hour = 3,900 dong.

- For workers paid by piece rate:

Example 8. If the unit price of wages for product C made at night is 1,300 dong (Example 6), then for product C made during nighttime overtime on regular days, the unit price of wages would be:

1,300 dong x 150% = 1,950 dong.

d) Overtime wages and nighttime work wages as stipulated in points 2 and 3 above are taken from the annual wage fund corresponding to the production and business plan. In cases where new quantities or volumes of work arise that were not included in the planned annual wage fund, enterprises need to supplement the overtime and nighttime work wages into the enterprise's wage fund and account them into cost or circulation fees.

The overtime wage rate of 150%; 200%; 300%, and nighttime work wage rate of 130% as stipulated in points 2 and 3 above are mandatory rates that enterprises must pay for overtime and nighttime work, while higher rates are subject to agreement between employers and employees.

4. Wage increment system:

The wage increment system according to Clause 2, Article 6 of Decree No. 114/2002/NĐ-CP is specified as follows:

a) Annually, based on job requirements, production and business conditions, after consulting with the Trade Union Committee or Temporary Trade Union Committee, enterprises establish plans and organize wage increments for workers employed in the enterprise.

b) Workers who meet the following conditions are eligible for annual wage increments:

- Having worked in the enterprise for at least one year (12 months);

- Consistently completing assigned tasks in terms of quantity and quality as stipulated in the signed labor contract;

- Not being in a period of disciplinary action under the Labor Code and the enterprise's internal labor regulations.

c) The wage increment system for workers must be reflected in the labor contract and collective labor agreement. Employers are encouraged to provide early wage increments for talented and highly contributing workers to the enterprise's production and business efficiency.

5. Wage payment regulations:

According to Clause 4, Article 5 of Decree No. 114/2002/NĐ-CP, enterprises have the responsibility to establish and promulgate wage regulations, encouraging workers to improve productivity, quality, efficiency, and talent, ensuring harmony between the interests of the enterprise and the workers.

VI. Implementation Organization

1. Enterprises have the responsibility:

- To establish, promulgate, and register with the provincial or centrally-administered city labor management authority the wage scale and salary table applicable within the enterprise. In cases of amendments or supplements to the wage scale and salary table, the enterprise must register the amended or supplemented parts;

- To establish, promulgate allowances, wage levels, wage regulations, bonuses, technical grade standards for workers, positions, and professional and vocational qualification standards for civil servants to apply within the enterprise.

Cooperatives, farms, cooperative groups, households, and individuals hiring workers are not necessarily required to establish wage scales and salary tables in accordance with Sections III and IV above but may adapt or self-regulate accordingly;

- To review, amend, and supplement internal labor regulations, collective labor agreements, and labor contracts to align with the provisions mentioned above;

- To promptly disseminate to workers state policies and systems regarding labor, wages, income; enterprise regulations on wage scales, salary tables, allowances; technical grade standards for workers; positions and professional and vocational qualification standards for civil servants; labor norms; wage regulations, and bonuses.

2. Provincial People's Committees direct the Department of Labor, Invalids, and Social Affairs to have the responsibility:

- To guide enterprises under their management to implement state policies and systems regarding labor, wages, and income;

- To accept and record in the monitoring book the registration of wage scales and salary tables of enterprises located within their jurisdiction. In cases where the wage scales and salary tables established by enterprises do not comply with Article 5 of Decree No. 114/2002/NĐ-CP, the Department of Labor, Invalids, and Social Affairs must notify the enterprise to correct it within 15 days from the date of receipt of the registration;

- To inspect and audit the implementation of policies and systems for workers in enterprises under their management.

VII. Implementation Provisions

This Circular takes effect fifteen days after its publication in the Official Gazette.

The provisions of this Circular shall not apply to workers employed in enterprises operating under the Enterprise Law that fall within the scope of application of Circular No. 12/2003/TT-BLDTBXH dated May 30, 2003, issued by the Ministry of Labor - Invalids and Social Affairs guiding the implementation of certain articles of Decree No. 114/2002/NĐ-CP dated December 31, 2002, of the Government on wages for workers employed in state-owned enterprises.

Repeal Circular No. 10/LĐTBXH-TT dated April 19, 1995, guiding the implementation of certain articles of Decree No. 197/CP dated December 31, 1994, of the Government on wages, and Circular No. 05/LĐTBXH-TT dated March 22, 1995, guiding the increase in salary grades for workers and officials in enterprises under the Ministry of Labor - Invalids and Social Affairs./.