Circular No. 14/2003/TT-BLDTBXH guiding the implementation of certain provisions of Decree No. 114/2002/NĐ-CP dated December 31, 2002 on wages for workers employed in enterprises with foreign investment capital and foreign or international organizations in Vietnam.

CIRCULAR

HGuidelines for Implementing Certain Provisions of Decree No. 114/2002/NĐ-CP dated December 31, 2002 on Wages for Workers Employed in Enterprises with Foreign Investment and Foreign or International Organizations in Vietnam

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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 agencies, the Ministry of Labor, Invalids, and Social Affairs provides guidelines for implementation concerning wages for workers employed in enterprises with foreign investment and foreign or international organizations in Vietnam as follows:

I. OBJECTS AND SCOPE OF APPLICATION

The subjects to whom the wage regulations stipulated in this Circular apply are workers employed under labor contracts in the following organizations:

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

2. Joint venture banks with foreign countries, branches of joint venture banks with foreign countries, and credit institutions with joint venture capital or 100% foreign capital operating in Vietnam;

3. Contractors (main contractors, subcontractors) from abroad who undertake projects in Vietnam;

4. Diplomatic missions, consular offices of foreign countries, and representative offices of international organizations under the United Nations system, regional, and sub-regional organizations that hire workers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise;

5. Representative offices of foreign news agencies, press, radio, and television organizations;

6. Representative offices and project offices of non-governmental organizations from abroad;

7. Project offices of foreign entities, branches of foreign companies, and representative offices of foreign economic, commercial, financial, banking, insurance, scientific and technical, cultural, educational, health, and legal advisory organizations; Branches of foreign law firms permitted to operate in Vietnam;

8. Foreign nationals or Vietnamese citizens residing abroad who reside in Vietnam and hire workers.

(The above-mentioned enterprises, agencies, units, organizations, and individuals are referred to collectively as enterprises and agencies.)

II. MINIMUM WAGE

The minimum wage level according to Article 4 of Decree No. 114/2002/NĐ-CP for unskilled labor (without training) under normal working conditions in enterprises and agencies is specified as follows:

1. The current minimum wage level, paid in Vietnamese Dong, as stipulated in Decision No. 708/1999/QĐ-BLĐTBXH dated June 15, 1999 of the Minister of Labor, Invalids, and Social Affairs, continues to be applied to enterprises with foreign investment, joint ventures, specifically as follows:

a) Not less than 626,000 VND/month, applicable to enterprises located in districts of Hanoi City and Ho Chi Minh City;

b) Not less than 556,000 VND/month, applicable to enterprises located in counties of Hanoi City and Ho Chi Minh City; districts of Hai Phong City, Bien Hoa City, and Vung Tau City;

c) Not less than 487,000 VND/month, applicable to enterprises located in counties, provinces, and cities other than those mentioned above;

d) For some enterprises located in areas with difficult conditions and poor infrastructure (outside the scope specified in points a and b above), if it is necessary to apply a lower minimum wage (from 417,000 VND/month to below 487,000 VND/month), then the Chairman of the People's Committee of the province or centrally administered city shall consider and decide to allow its application for a specific period of time.

2. The current minimum wage level as stipulated in Decision No. 385/LĐTBXH-QĐ dated April 1, 1996 of the Minister of Labor, Invalids, and Social Affairs continues to be applied to foreign agencies, organizations, and international organizations in Vietnam. – 3. Based on labor productivity, production and business efficiency, enterprises and agencies have the right to set a higher minimum wage than the national minimum wage levels specified in points 1 and 2 above as the basis for paying wages to workers.

III. PAY SCALE AND ALLOWANCES

1. The pay scale and salary grid according to Clause 1 and 3, Article 5 of Decree No. 114/2002/NĐ-CP are specified as follows:

a) Enterprises and agencies are responsible for establishing the pay scale, salary grid, 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 wages, and resolving other benefits for workers.

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

When establishing and promulgating the pay scale and salary grid, enterprises and agencies must consult the opinions of the Trade Union Committee or the Provisional Trade Union Committee and publicly announce them within the enterprise or agency before implementation.

c) Enterprises and agencies must register their pay scale and salary grid system with the provincial or centrally administered city labor management authority within one month from the date the pay scale and salary grid are announced and implemented. The registration dossier includes a request letter and the pay scale and salary grid system established by the enterprise or agency.

Allowances:

2. In addition to establishing the pay scale and salary grid as prescribed above, enterprises and agencies have the right to stipulate allowance items or apply the allowance system prescribed by the Government for state-owned enterprises to pay workers.

IV. LABOR QUOTA

The labor quota according to Clause 2 and 3, Article 5 of Decree No. 114/2002/NĐ-CP is specified as follows:

The labor quota pursuant to Clauses 2 and 3, Article 5, Decree No. 114/2002/NĐ-CP is specified as follows:

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

2. The establishment of labor standards shall be carried out as follows:

a) Enterprises and agencies shall establish a Labor Standard Council to organize the establishment or review, adjust, and supplement the labor standard system applicable within the enterprise or agency. The council shall consist of the enterprise or agency director, some members with sufficient capacity and expertise selected by the director, and representatives of the grassroots trade union committee or temporary trade union committee.

b) Based on the actual production organization and labor organization, enterprises and agencies shall select methods for establishing labor standards as specified in Appendix 2 attached to this Circular or apply other appropriate methods to establish labor standards that comply with the aforementioned principles.

c) Annually, enterprises and agencies shall evaluate the implementation of labor standards to amend and supplement them appropriately according to the production organization and labor organization. If the implemented labor standard is lower than 5% or higher than 15% compared to the assigned standard, then within three months, the enterprise or agency must review and adjust it accordingly.

3. When establishing, adjusting, or supplementing labor standards, enterprises and agencies must seek opinions from the grassroots trade union committee or temporary trade union committee and publicly announce them within the enterprise or agency.

V. WAGE SYSTEM

1. Forms of wage payment:

The forms of wage payment as stipulated in Article 7 of Decree No. 114/2002/NĐ-CP are detailed as follows:

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

b) Piece-rate wages, applicable to individuals or groups of workers based on the quantity and quality of products completed.

c) Contractual wages, applicable to individuals or groups of workers based on the volume, quality of work, and time required to complete the tasks.

Based on the above forms of wage payment, enterprises and agencies shall choose a form of wage payment suitable for the nature of the job and business conditions, linking wages to job performance, ensuring incentives for workers to improve efficiency and productivity. The selection or change of wage forms must be reflected in the labor contract and collective labor agreement.

2. Overtime wage payment:

Overtime wage payment when workers work overtime as stipulated in Clause 1, 2, and 3, Article 10 of Decree No. 114/2002/NĐ-CP is detailed as follows:

a) For workers paid time-based wages, if they work overtime beyond the standard hours, enterprises and agencies must pay overtime wages calculated as follows:

Where:

- The actual hourly wage is determined based on the actual monthly wage of the worker who works overtime (excluding overtime wages, night shift premiums, bonuses, and other non-wage income) 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 is determined based on the actual daily wage (excluding overtime wages, night shift premiums, bonuses, and other non-wage income) 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 worked on regular days;

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

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

- The time for working overtime is 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. amended and supplemented by Law No. 87/2025/QH15; If overtime work is arranged for compensatory rest, enterprises and agencies only need to pay the difference of 50% of the actual hourly wage for the ongoing work if the overtime is on a regular day; 100%, if the overtime is on a weekly rest day; 200%, if the overtime is on a holiday or rest day with full pay.

Example 1. Mr. A's actual monthly wage and other income (working in normal working conditions with the actual number of working days equal to the number of working days chosen by the enterprise or agency, which is 24 days/month) is 1,013,600 VND (including bonus of 150,000 VND; night shift premium of 57,600 VND; meal allowance of 180,000 VND; travel subsidy 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 is:

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

- The overtime wage for 1 hour on a regular day is:

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

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

In the case where Mr. A is arranged to take compensatory leave for overtime work, the enterprise or agency only needs to pay the difference compared to the wage of the current job, which is 1,500 VND per hour (4,500 VND - 3,000 VND).

Example 2. The actual hourly wage of Mr. A as in Example 1, if he works an additional hour on a weekly rest day, he will be paid 6,000 VND (3,000 VND x 200% x 1 hour). In the case where Mr. A is arranged to take compensatory leave for overtime work, the enterprise or agency only needs to pay the difference compared to the wage of the current job on a regular working day, which is 3,000 VND per hour (6,000 VND - 3,000 VND).

Example 3. The actual hourly wage of Mr. A as in Example 1, if he works an additional hour on a public holiday or rest day with salary, he will be paid 9,000 VND (3,000 VND x 300% x 1 hour). In the case where Mr. A is arranged to take compensatory leave for overtime work, the enterprise or agency only needs to pay the difference compared to the wage of the current job on a regular working day, which is 6,000 VND per hour (9,000 VND - 3,000 VND).

b) For workers paid by piece rate, if outside the standard working hours, the enterprise or agency requires additional quantity or volume of products or tasks beyond the quota or those arising unexpectedly not included in the annual production and business plan, and the enterprise or agency needs to work overtime, then the unit price of wages for the additional products or tasks shall be paid at 150% of the unit price of wages for products worked within the standard working hours, if worked on a regular working day; at 200%, if worked on a weekly rest day; at 300%, if worked on a public holiday or rest day with salary.

Example 4. The unit price of product B worked within the standard working hours is 1,000 VND/product. If the enterprise or agency requires additional work beyond the quota and standard working hours, the unit price of wages for the additional products shall be paid as follows:

- 1,500 VND/product, if the product is worked on a regular working day (1,000 VND x 150%);

- 2,000 VND/product, if the product is worked on a weekly rest day (1,000 VND x 200%);

- 3,000 VND/product, if the product is worked on a public holiday or rest day with salary (1,000 VND x 300%).

3. Payment for night shift work:

The wage of workers performing night shift work according to Clause 4, Article 10, Decree No. 114/2002/ND-CP is specified as follows:

a) For workers paid by time, if they work during night shifts, the enterprise or agency must pay the night shift wage calculated as follows:

Where:

- The actual hourly wage is calculated as stated in point a, point 2 above;

- The rate of 130% includes the actual hourly wage for daytime work and 30% of the actual hourly wage for night shift work;

- The night shift working hours as stipulated in Article 6, Decree No. 195/CP dated December 31, 1994 of the Government are from 22:00 on the previous day to 06:00 on the following day for provinces and cities north of Thua Thien-Hue; from 21:00 on the previous day to 05:00 on the following day for provinces and cities south of Da Nang;

Example 5. The actual wage for daytime work of 1 hour is 2,000 VND. If the worker performs night shift work, the wage for 1 hour of night shift work is paid as follows:

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

b) For workers paid by piece rate:

Example 6. The unit price of wages for product C worked during standard daytime working hours is 1,000 VND, then the unit price of wages for that product when worked during night shifts is 1,300 VND (1,000 VND x 130%), and the wage is settled based on the quantity of products worked during night shifts.

c) In the case where workers work overtime during night shifts, the overtime wage is calculated as follows:

- For workers paid by time:

Example 7. Workers working during night shifts for 1 hour are paid 2,600 VND (Example 5). If they work overtime during night shifts on a regular working day, 1 hour is paid as follows:

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

- For workers paid by piece rate:

Example 8. The unit price of wages for product C worked during night shifts is paid 1,300 VND (Example 6). If product C is worked overtime during night shifts on a regular working day, the unit price of wages is paid as follows:

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

d) The overtime wage and night shift wage prescribed 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 determined in the annual wage plan, and the enterprise or agency needs to work overtime or night shifts, this overtime wage and night shift wage will be supplemented into the enterprise or agency's wage fund and accounted for in the cost or circulation fee.

The wage rates for overtime at 150%, 200%, 300%, and night shift work at 130% prescribed in points 2 and 3 above are mandatory rates that enterprises or agencies must pay when working overtime or night shifts, while higher rates are subject to negotiation between the employer and employee.

4. Promotion system:

The promotion system according to Clause 2, Article 6, Decree No. 114/2002/ND-CP is specified as follows:

a) Annually, based on job requirements, production and business conditions, after consulting the opinions of the grassroots trade union committee or the provisional trade union committee, the enterprise or agency formulates plans and organizes promotions for workers employed in the enterprise or agency.

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

- Having worked continuously in the enterprise or agency 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 currently under disciplinary action according to the Labor Code and internal regulations of the enterprise or agency.

c) The salary grade increase system for employees must be reflected in the labor contracts and collective labor agreements. It is encouraged that employers grant early salary grade increases to talented employees who make significant contributions to the business efficiency of enterprises and agencies.

5. Salary payment regulations:

According to Clause 4, Article 5 of Decree No. 114/2002/ND-CP, enterprises and agencies have the responsibility to establish and promulgate salary payment regulations, encouraging workers to enhance productivity, quality, effectiveness, and talent, ensuring harmony between the interests of enterprises and agencies and those of workers.

VI. IMPLEMENTATION

1. Enterprises and agencies shall be responsible for:

- Establishing, promulgating, and registering with the provincial or centrally-administered city state labor management agency the salary scale and wage table applicable within their enterprise or agency. In cases where the salary scale and wage table are amended or supplemented, the enterprise or agency must register the amendments or supplements;

- Establishing, promulgating wage supplements, labor level systems, salary payment regulations, bonuses, technical rank standards for skilled workers, job titles, professional and vocational qualification standards for civil servants, and labor norms for application within their enterprise or agency.

For foreign or international organizations operating on Vietnamese territory; foreign nationals or Vietnamese residing abroad who work in Vietnam, it is not necessarily required to establish a salary scale, wage table, and labor norms according to the provisions set out in Sections III and IV above, but they may apply or self-regulate accordingly;

- Reviewing, amending, and supplementing internal labor regulations, collective labor agreements, and labor contracts to align with the aforementioned provisions;

- Publicly and promptly informing workers about state policies and systems regarding labor, wages, income; enterprise and agency regulations concerning salary scales, wage tables, wage supplements; technical rank standards for skilled workers; job titles, professional and vocational qualification standards for civil servants; labor norms; salary payment regulations, and bonuses.

2. Provincial People's Committees shall direct the Department of Labor, Invalids, and Social Affairs to be responsible for:

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

- Receiving and recording in a tracking register the registration of salary scales and wage tables of enterprises and agencies located within their jurisdiction. If the salary scale and wage table established by an enterprise or agency do not comply with the provisions of Article 5 of Decree No. 114/2002/ND-CP, the Department of Labor, Invalids, and Social Affairs must notify the enterprise or agency to correct them within 15 days from the date of receipt of the registration;

- Inspecting and auditing the implementation of systems and policies for workers in enterprises and agencies under their management.

VII. IMPLEMENTATION PROVISIONS

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

Abolish Circular No. 11/LDTBXH-TT dated May 3, 1995, issued by the Ministry of Labor, Invalids, and Social Affairs guiding the implementation of Decree No. 197/CP dated December 31, 1994, of the Government on wages for Vietnamese workers employed in enterprises with foreign investment and foreign agencies or organizations or international organizations in Vietnam./.