Circular No. 15/2007/TT-BLDTBXH guiding the implementation of Decree No. 86/2007/NĐ-CP dated May 28, 2007 of the Government on labor management and wages in a limited liability company with 100% state-owned charter capital.

CIRCULAR

Guidelines for implementing Decree No. 86/2007/NĐ-CP dated May 28, 2007 of the Government on labor management and wages in state-owned limited liability companies with 100% state capital

 and in state-owned limited liability companies with 100% state capital

____________________________

Pursuant to Decree No. 86/2007/NĐ-CP dated May 28, 2007 of the Government on labor management and wages in state-owned limited liability companies with 100% state capital, the Ministry of Labor, Invalids and Social Affairs hereby provides guidelines for implementation as follows:

I. SCOPE OF REGULATION AND APPLICABLE OBJECTS

The scope of regulation and the subjects to which labor management and wage regulations under Articles 1 and 2 of Decree No. 86/2007/NĐ-CP are specifically defined as follows:

2. Applicability:

a) Limited liability companies with one member converted from state enterprises according to Decree No. 63/2001/NĐ-CP dated September 14, 2001, Decree No. 145/2005/NĐ-CP dated November 21, 2005, and Decree No. 95/2006/NĐ-CP dated September 8, 2006 of the Government;

b) Limited liability companies with one member established by the State holding 100% of the charter capital according to the provisions of the Enterprise Law.

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

a) Workers employed under labor contracts as stipulated in Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain articles of the Labor Code concerning labor contracts;

b) Professional members and non-professional members of the Board of Members for companies organized under the Board of Members model (hereinafter referred to as members of the Board of Members) or professional Chairmen and non-professional Chairmen for companies organized under the Chairman model (hereinafter referred to as Chairman);

c) Professional Inspectors and non-professional Inspectors (hereinafter referred to as Inspectors);

d) General Directors, Directors, Deputy General Directors, Deputy Directors, Chief Accountants, except those who work under contracts;

II. WAGE GRADING AND ALLOWANCE

Wage grading and allowance under Article 3 of Decree No. 86/2007/NĐ-CP are specifically defined as follows:

1. Wage Grading:

The subjects specified in Clause 2, Section I of this Circular shall be graded according to the wage scale and salary table issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government on the wage scale system, salary table, and allowance system in state enterprises, specifically:

a) Workers and employees directly involved in production and business, based on the assigned tasks and technical grade standards for workers to correspondingly grade into the appropriate level of the applicable wage scales and salary tables according to the job they undertake;

b) Professional staff and administrative staff are graded according to the salary table for professional staff and administrative staff; auxiliary and service staff are graded according to the salary table for auxiliary and service staff;

c) Staff currently holding the positions of Department Heads, Deputy Department Heads, and equivalent positions, and professional Inspectors are graded according to the professional and administrative staff salary table as specified in point b, Clause 1, Section II of this Circular and are entitled to department head allowances corresponding to their position level, and professional Inspectors are entitled to allowances equivalent to department head positions;

d) General Directors, Directors, Deputy General Directors, Deputy Directors, and Chief Accountants are graded according to their respective positions in the General Director, Director, Deputy General Director, Deputy Director, and Chief Accountant salary table based on the company's classification;

đ) Professional Board of Members Chairpersons are graded according to the position of professional Board of Members Chairperson in the professional Board of Members salary table based on the company's classification;

e) Professional Board of Members are graded according to the position of professional Board of Members in the professional Board of Members salary table based on the company's classification;

The transfer of wage grading for the positions specified in points a, b, c, d, đ, and e, Clause 1, Section II of this Circular shall be implemented according to the guidance provided at:

- Circular No. 01/2005/TT-BLĐTBXH dated January 5, 2005 of the Ministry of Labor, Invalids and Social Affairs guiding the transition from old to new wage grading for General Directors, Directors, Deputy General Directors, Deputy Directors, Chief Accountants, and workers, professional staff, and employees in state enterprises;

- Joint Circular No. 02/2005/TTLT-BLĐTBXH-BNV dated January 5, 2005 of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Home Affairs guiding the transition from old to new wage grading for professional Board of Members, members of the Supervisory Board, and staff assisting the Board of Members in state enterprises according to Decree No. 205/2004/NĐ-CP;

- Joint Circular No. 23/2005/TTLT-BLĐTBXH-BTC dated August 31, 2005 of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance guiding the classification and wage grading for professional Board of Members, General Directors, Deputy General Directors, Deputy Directors, and Chief Accountants of state enterprises.

g) Based on the classification criteria specified in Joint Circular No. 23/2005/TTLT-BLĐTBXH-BTC, the company proceeds to classify and submit to the Owner for decision as the basis for wage grading for the positions specified in points d, đ, and e, Clause 1, Section II of this Circular. For companies classified as Class I, the Owner must register with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance before making a decision; for companies meeting the conditions for special State Corporation or State Corporation classification, there must be a written request submitted by the Owner to the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance for approval by the Prime Minister;

h) For workers transferred from other sectors to work in the company, the transfer of wage grading shall be implemented according to the guidance provided in point b, Clause 2, Section II of Circular No. 19/2000/TT-BLĐTBXH dated August 7, 2000 of the Ministry of Labor, Invalids and Social Affairs guiding wage grading for workers transferred from other sectors to work in state enterprises;

2. Allowance:

a) Non-executive members of the Board of Members or non-executive Chairmen of the company shall be entitled to job responsibility allowances as non-executive members of the Board of Management of the company; non-executive Supervisors shall be entitled to job responsibility allowances as members of the Supervisory Board according to the category of the company as prescribed in Circular No. 03/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, War Invalids and Social Affairs guiding the implementation of job responsibility allowances in state-owned companies.

b) Depending on the level, nature, working conditions, employees, members of the Board of Members, Chairmen of the company, Supervisors, General Directors, Directors, Deputy General Directors, Deputy Directors, Chief Accountants shall be entitled to regional allowances, attraction allowances, job responsibility allowances, hazardous and dangerous work allowances, and mobility allowances.

The objects, levels of allowances, and methods of calculation shall be implemented in accordance with the provisions of Joint Circular No. 11/2005/TTLT-BNV-BLDTBXH-BTC-UBDT dated January 5, 2005 of the Ministry of Home Affairs - Ministry of Labor, War Invalids and Social Affairs - Ministry of Finance and the Ethnic Committee, Joint Circular No. 10/2005/TTLT-BNV-BLDTBXH-BTC dated January 5, 2005 of the Ministry of Home Affairs - Ministry of Labor, War Invalids and Social Affairs - Ministry of Finance, Circular No. 03/2005/TT-BLDTBXH, No. 04/2005/TT-BLDTBXH, and No. 05/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, War Invalids and Social Affairs.

III. LABOR MANAGEMENT AND WAGES

A. Labor management and wages for Deputy General Directors, Deputy Directors, Chief Accountants, and employees working under labor contracts as stipulated in Article 4 of Decree No. 86/2007/NĐ-CP are specified as follows:

1. Labor management:

a) By the end of January each year, based on the volume, quality, requirements, production and business tasks, labor norms, and the utilization of labor in the previous year, the company shall prepare a plan for labor utilization, including the total number of workers to be utilized in the planning year, the number of new workers to be recruited, and training plans for each type of worker, and register with the owner before implementation.

b) Based on the registered labor utilization plan, the company shall recruit new workers in accordance with Decree No. 39/2003/NĐ-CP dated April 18, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding employment and Circular No. 20/2003/TT-BLDTBXH dated September 22, 2003 of the Ministry of Labor, War Invalids and Social Affairs; sign labor contracts with newly recruited workers in accordance with Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government detailing and guiding the implementation of certain provisions of the Labor Code regarding labor contracts and Circular No. 21/2003/TT-BLDTBXH dated September 22, 2003 of the Ministry of Labor, War Invalids and Social Affairs.

c) By the end of the fourth quarter each year, the company shall be responsible for evaluating the labor utilization plan; if the actual number of workers exceeds the demand, leading to unemployment among workers, the company must develop plans for training, retraining, and job placement for these workers.

In cases where all measures have been taken but still cannot provide jobs, the company shall fully implement the regulations for workers when terminating their labor contracts in accordance with Decree No. 39/2003/NĐ-CP dated April 18, 2003 and Decree No. 44/2003/NĐ-CP dated May 9, 2003 of the Government.

2. Wage management:

2.1. Minimum wage rate for calculating unit wage cost:

The company has the right to choose a higher minimum wage rate than the general minimum wage rate set by the Government (the general minimum wage rate from October 1, 2006 is VND 450,000/month as stipulated in Decree No. 94/2006/NĐ-CP dated September 7, 2006 of the Government) to serve as the basis for calculating the unit wage cost, but must ensure the following conditions:

a) Pay taxes to the State budget in accordance with tax laws and implementing guidelines;

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

c) Must have profits, planned profits must not be lower than the realized profits of the previous year, except in special cases (the State intervenes to stabilize the market; increases depreciation to recover capital quickly; technological innovation; expanding production and business; new investment).

2.2. Establishing unit wage cost:

The establishment of unit wage cost according to point b, Clause 2, Article 4 of Decree No. 86/2007/NĐ-CP to serve as the basis for paying wages to workers is carried out as follows:

a) Determine the production and business targets to establish the unit wage cost.

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

- Revenue;

- Total revenue minus total costs (excluding wages);

- Total products (including converted products) sold.

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

The total revenue index; total revenue minus total costs (excluding wages); profit is calculated in accordance with Circular No. 24/2007/TT-BTC dated March 27, 2007 of the Ministry of Finance guiding the financial regulations of state-owned limited liability companies and organizations of political and social affairs.

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

b) Determine the parameters to establish the unit wage cost:

The parameters for establishing the unit price of wages include:

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

- The minimum wage rate chosen by the company (TL_{x 12 months}) selected by the company in accordance with Clause 2.1, Part A, Section III of this Circular.

- The average wage grade coefficient (H_cb):

The wage level factor based on the average job grade for establishing the unit price of wages is determined based on the average job grade of production and business workers directly involved in manufacturing and trading, and the average wage factor of indirect labor (excluding members of the Board of Members or Chairman of the company, General Director, Director, and Inspector). The job grade is determined based on the production organization, labor organization, technical level, technology, and product quality requirements.

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

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

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

For specialized staff of mass organizations who are paid by such organizations, the difference between the wage calculated based on the minimum wage rate chosen by the company and the wage paid by the mass organization shall be added to determine the unit price of wages of the company.

- Additional wage when working at night (V_ttlđ):

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

c) Establishing the unit price of wages:

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

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

 

 

Where:

+ V_đg: The unit price of wages calculated based on total revenue (unit of measurement: dong/1,000 dong revenue) or total revenue minus total costs excluding wages (unit of measurement: dong/1,000 dong total revenue minus total costs excluding wages) or on profit (unit of measurement: dong/1,000 dong profit);

+ Lđb, TLmincty, Hcb, Hpc, Vđt, Vttlđ: are determined according to the provisions at point b, clause 2.2, part A, section III of this Circular;

+ STkh: Planned total revenue as specified at point a, clause 2.2, part A, section III of this Circular;

+ SCkh: Planned total costs excluding wages as specified at point a, clause 2.2, part A, section III of this Circular;

+ Pkh: Planned profit as specified at point a, clause 2.2, part A, section III of this Circular.

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

                                  Vđg = Vgiờ x Tsp

Where:

+ Vđg: The unit price of wages calculated based on units of products, including converted consumption products (unit of measurement: dong/unit of product);

+ Vgiờ: Hourly wage for calculating the unit price of wages, calculated by dividing the planned average monthly wage by 26 days and then by 8 hours. The average monthly wage is calculated based on the wage level factor according to job grade, average allowance, the minimum wage rate chosen by the company, the wage difference of specialized staff of mass organizations, and additional wages for night work;

+ Tsp: Comprehensive labor input for a unit of product (measured in hours-person/unit of product).

d) Registering the unit price of wages.

After establishing the unit price of wages, the company must report to the owner for comments before implementation. Specifically, for state-owned joint stock companies classified as special corporations, the registered unit price of wages must be submitted to the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance.

2.3. Determining the planned wage fund:

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

                                  SV_kh = V_khđg + V_khcđ

Where:

- SVkh: Total planned annual wage fund of the company;

- Vkhđg: Planned wage fund according to the unit price of wages;

- Vkhcđ: Planned wage fund according to regulations (not included in the unit price of wages).

Vkhđg and Vkhcđ are determined as follows:

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

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

                                  Vkhđg = Vđg x Csxkh

Where:

- Vkhđg: Planned wage fund according to the unit price of wages;

- Vđg: Unit price of wages calculated according to the provisions at point c, clause 2.2, part A, section III of this Circular;

- Csxkh: Total planned revenue or total revenue minus total costs (excluding wages) or planned profit or total products (including converted products) consumed, determined according to the provisions at point a, clause 2.2, part A, section III of this Circular;

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

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

                                  Vkhcđ = Vpc + Vbs

Where:

- Vkhcđ: Planned wage fund according to regulations (not included in the unit price of wages);

- Vpc: Allowances and other benefits not included in the unit price of wages, including: diving allowance; sea travel allowance; aviation safety award, safe operation electricity award, calculated according to the object and the level of benefit stipulated by the State;

- Vbs: Wages for holidays with pay according to the Labor Code (including: annual leave, personal leave, public holidays, Tet holidays, maternity leave), applicable to companies that establish the unit price of wages based on units of products where labor norms have not been considered when established.

2.4. Determining the actual wage fund:

The total actual wage fund of the company according to paragraph c, clause 2, Article 4 of Decree No. 86/2007/ND-CP is calculated according to the following formula:

                                     SVth = Vthđg + Vthcđ

Where:

- SVth: Total actual wage fund of the company.

- Vthđg: Actual wage fund according to the unit price of wages (For companies required to adjust the actual wage fund, the adjusted actual wage fund is taken);

- Vthcđ: Actual wage fund according to regulations (not included in the unit price of wages).

Vthđg and Vthcđ are determined as follows:

a) Determining the actual wage fund according to the unit price of wages:

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

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

                                  Vthđg = Vđg x Csxth (1)

Where:

+ Vthđg: Fund for actual wage implementation based on the wage rate;

+ Vđg: Wage rate calculated according to the provisions set forth at point c, clause 2.2, part A, section III of this Circular;

+ Csxth: Total revenue or total revenue minus total costs (excluding wages) or profit or total product (including converted products) consumed in implementation;

When determining the indicators of total revenue; total revenue minus total costs (excluding wages); profit; total product (including converted products) consumed in implementation, if there are factors increasing beyond the plan that are not created by labor productivity, they must be excluded when determining the fund for actual wage implementation.

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

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

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

                                  Vthđgđc = Vthđg - Vw - Vp (2)

Where:

* Vthđgđc: Fund for actual wage implementation based on the wage rate after adjustment;

* Vthđg: Fund for actual wage implementation based on the wage rate;

* Vw: Fund for wage adjustment according to labor productivity, calculated according to the following formula:

 

 

Wth, Wkh: Actual average labor productivity and planned average labor productivity of the company, determined according to the provisions of Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids and Social Affairs.

* Vp: Fund for wage adjustment according to profit (in cases where after adjusting the fund for actual wage implementation according to labor productivity, the realized profit is still lower than the planned profit), calculated according to one of the two methods below:

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

                                  Vp = Pkh - Pth (4)

Where:

Vp: Fund for wage adjustment according to profit;

Pkh: Planned profit corresponding to the wage rate according to the provisions at points a and b, clause 2.2, part A, section III of this Circular;

Pth: Realized profit (after adjusting the fund for actual wage implementation according to labor productivity).

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

 

 

Where:

Vp: Fund for wage adjustment according to profit;

Vthđg: Fund for actual wage implementation based on the wage rate;

Vcđ: Wage system fund, determined by multiplying the number of standard workers with the average salary grade coefficient, average supplementary salary coefficient, and the general minimum wage level;

Vw: Fund for wage adjustment according to labor productivity, calculated according to formula (3);

Pth: Realized profit (after adjusting the wage fund according to labor productivity);

Pkh: Planned profit corresponding to the wage rate according to the provisions at points a and b, clause 2.2, part A, section III of this Circular;

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

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

Where:

* Vthđgđc: Fund for actual wage implementation based on the wage rate after adjustment;

* Vthđg: Fund for actual wage implementation based on the wage rate;

* Vw: Fund for wage adjustment according to labor productivity, calculated according to formula (3).

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

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

Where:

* Vthđgđc: Fund for actual wage implementation based on the wage rate after adjustment;

* Vthđg: Fund for actual wage implementation based on the wage rate;

* Vp: Fund for wage adjustment according to profit, calculated according to one of the two methods below:

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

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

 

 

Where:

Vp: Fund for wage adjustment according to profit;

Vthđg: Fund for actual wage implementation based on the wage rate;

Vcđ: Wage system fund, determined by multiplying the number of standard workers with the average salary grade coefficient, average supplementary salary coefficient, and the general minimum wage level;

Pth: Realized profit;

Pkh: Planned profit corresponding to the wage rate according to the provisions at points a and b, clause 2.2, part A, section III of this Circular;

The fund for actual wage implementation after adjustment according to labor productivity and profit mentioned above shall not be lower than the wage system fund (Vcđ).

+ For companies implementing production and business plans resulting in losses or no profits, the fund for actual wage implementation based on the wage rate is determined by multiplying the actual average number of workers used with the average salary grade coefficient, average supplementary salary coefficient, and the general minimum wage level.

b) Determining the fund for actual wage implementation based on the wage system (not included in the wage rate):

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

                                  V_thcđ = V_kct + V_bs + V_tg + V_lđ

Where:

- Vthcđ: Fund for actual wage implementation based on the wage system (not included in the wage rate);

- Vpc; Vbs: Various salary supplements and other benefits not included in the wage rate; wages for days off paid according to the provisions of the Labor Code at point b, clause 2.3, part A, section III of this Circular, calculated according to actual expenditures as prescribed by the State;

- Vtg: Overtime pay, calculated according to actual overtime hours (total planned overtime hours and unplanned overtime hours not exceeding the maximum allowed under the Labor Code) to implement additional workloads and tasks not covered in the planned wage fund.

- Vlđ: Night shift pay, calculated according to actual night shift hours to implement additional workloads and tasks not covered in the planned wage fund.

3. Wage regulations:

a) Companies have the responsibility to establish wage regulations in accordance with the law, ensuring democracy, fairness, transparency, and encouraging talented individuals with high professional skills and labor productivity who make significant contributions to the company.

When establishing wage regulations, the participation of the Company Trade Union Executive Board is required, and these regulations must be communicated to each worker and registered with the owner before implementation.

b) The company shall establish a reserve fund to supplement the salary fund for the following consecutive year to ensure uninterrupted salary payments and shall not use it for other purposes. The annual reserve level shall be determined by the General Director or Director after consulting with the Trade Union Executive Board, but shall not exceed 17% of the actual salary fund.

c) Based on the actual salary fund and the salary regulations, the company shall pay salaries according to productivity, quality, and business efficiency to each unit, department, and individual employee. In cases where expenditures exceed the actual salary fund, the company must repay the excess salary from the actual salary fund of the following consecutive year.

4. Bonus system:

a) The annual bonus fund shall be derived from the company's incentive fund as stipulated in Circular No. 24/2007/TT-BTC dated March 27, 2007, issued by the Ministry of Finance, guiding the financial regulations of state-owned limited liability companies, political organizations, and socio-political organizations.

Specifically, the Deputy General Director and Deputy Director of the company shall also receive additional bonuses from the management bonus fund according to the provisions of the aforementioned Circular No. 24/2007/TT-BTC.

b) The company shall be responsible for establishing a bonus regulation in accordance with the law, ensuring democracy, fairness, transparency, and encouraging individuals with talent, professional expertise, high labor productivity, and significant contributions to the company.

When formulating the bonus regulation, the participation of the Trade Union Executive Board shall be required, and it must be communicated to each employee and registered with the owner before implementation.

c) Based on the bonus fund, the company shall award bonuses to employees according to the company's bonus regulations.

B. Management of Salaries and Bonuses and Liability System for Members of the Board of Directors or Chairman of the Company, General Director, Director, and Auditor as specified in Article 5 of Decree No. 86/2007/NĐ-CP are detailed as follows:

1. Salary Management:

a) The salaries and allowances of members of the Board of Directors or Chairman of the company, General Director, Director, and Auditor shall be paid based on the company's profit and labor productivity according to the principle that increased profits and labor productivity result in increased salaries and allowances, while decreased profits and labor productivity result in reduced salaries and allowances, but not less than the minimum wage calculated based on the company's salary grade coefficient, allowance (if any), and the general minimum wage set by the Government (from October 1, 2006, the general minimum wage is VND 450,000/month as stipulated in Decree No. 94/2006/NĐ-CP dated September 7, 2006).

b) The salary fund of members of the Board of Directors or Chairman of the company, Auditors (including job responsibility allowances for non-executive members of the Board of Directors or non-executive Chairman of the company, non-executive Auditors), General Director, and Director of the company shall be determined annually, with monthly advances not exceeding 80% of the planned salary fund (the planned salary fund is determined according to Clause 2.1, Part B, Section III of this Circular). The remaining portion of the salary (at least 20% of the planned salary fund) shall be paid at the end of the year based on the degree of completion of production and business plans.

The salary fund of members of the Board of Directors or Chairman of the company, General Director, Director, and Auditor shall not be included in the unit price of the company's salary but shall be accounted for in the cost of goods sold or operating expenses and reflected as a separate item in the company's annual financial report.

2. Determination of the Salary Fund:

The salary fund of members of the Board of Directors or Chairman of the company, General Director, Director, and Auditor of the company as specified in Point c, Clause 1, Article 5 of Decree No. 86/2007/NĐ-CP is detailed as follows:

2.1. Determination of the Planned Salary Fund:

- The planned salary fund is calculated using the following formula:

khql

                                  V_{= [ L} x (H_ql cv_pc + H_kct) + (L_pctn x H_{] x TL}) ] x TL_{x 12 months} : Planned salary fund;

Where:

+ Vkhql: Planned salary fund;

+ Lql: Number of full-time members of the Board of Directors or full-time Chairman of the company, General Director, Director (including independent unit directors of the company), and full-time Auditors counted based on actual figures at the time of determining the planned salary fund;

+ Hcv: Average salary coefficient, calculated based on the current salary coefficient of full-time members of the Board of Directors or full-time Chairman of the company, General Director, Director (including independent unit directors of the company), and full-time Auditors;

+ Hpc: Average allowance coefficient, calculated based on various allowances and benefits of full-time members of the Board of Directors or full-time Chairman of the company, General Director, Director (including independent unit directors of the company), and full-time Auditors including position allowance; regional allowance; attraction allowance; hazardous and dangerous work allowance; and safety reward system (if applicable);

+ Lkct: Number of part-time members of the Board of Directors or part-time Chairman of the company, part-time Auditors counted based on actual figures at the time of determining the planned salary fund;

- Hpctn: Job responsibility allowance coefficient for part-time members of the Board of Directors or part-time Chairman of the company, part-time Auditors as stipulated in Point a, Clause 2, Section II of this Circular;

+ TLmincty: Minimum wage level chosen by the company to calculate the unit price of salary according to Clause 2.1, Part A, Section III of this Circular. For companies with multiple minimum wage levels to calculate the unit price of salary, the highest minimum wage level may be selected.

- Adjusted planned salary fund:

khqlđc

                                  V_{x (1 + K} = V_{= [ L} đcql_{: Adjusted planned salary fund (this fund is referred to as the planned salary fund);})

Where:

+ Vkhqlđc: Adjusted planned salary fund (this fund is referred to as the planned salary fund).

+ Vkhql: Planned salary fund;

+ Kđcql: The additional adjustment factor for the planned salary fund, with a maximum of not more than two times, shall be selected by the company, but must ensure the following conditions:

* The increase rate of average salary must be lower than the increase rate of average labor productivity.

* The rate of increase (in percentage terms) of average wages must be lower than the rate of increase (in percentage terms) of average labor productivity.

The average salary increase is calculated based on the number of full-time members of the Board of Directors or the Chairman of the company, General Director, Director (including the Director of independent accounting units of the company), and dedicated internal auditors; the average productivity increase is calculated according to the entire company's regulations stipulated in Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005, issued by the Ministry of Labor, Invalids and Social Affairs. In cases where the company has multiple salary rates based on different criteria, it shall be calculated based on total revenue;

* Must have profit. The planned profit must not be lower than the actual profit achieved in the immediately preceding year, except in special cases (the State intervenes to stabilize the market; increases depreciation to recover capital quickly, innovate technology, expand production and business operations; new investment).

b) For companies without profit or with losses:

The planned salary fund is calculated using the following formula:

                                  V_{= [ L} = [L_ql cv_pc + H_kct) + (L_pctn x H_{] x TL}) ] x TL_{Maximum Downhill Gradient} x 12 months (1)

Where:

- Vkhql: Planned salary fund;

- Lql, Hcv, Hpc, Lkct, Hpctn are determined according to the provisions at point a, Clause 2.1, Part B, Section III of this Circular;

- TLmin: The general minimum wage level.

c) Reviewing the planned salary fund:

After determining the planned salary fund, the company must submit it for review by the owner before implementation.

For state-owned joint stock companies classified as Special State Corporations, the planned salary fund must be registered with the Ministry of Labor, Invalids and Social Affairs, and the Ministry of Finance.

d) Advance monthly salary:

Based on the results of the previous year's production and business tasks, the owner decides specifically the amount of advance salary payment monthly, but not exceeding 80% of the planned salary fund for members of the Board of Directors or the Chairman of the company, General Director, Director, internal auditors under their management. The remaining portion will be paid at the end of the year according to the degree of completion of tasks.

2.2. Actual salary fund:

a) For companies that achieve actual profits and average productivity equal to or higher than the plan, the actual salary fund equals the reviewed planned salary fund;

b) For companies that achieve actual profits and average productivity lower than the plan, the actual salary fund must be adjusted according to the following formula:

                                  V_thqlđc = V_{= [ L} - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_p - V (VND/year): is the total investment capital allocated annually for the usable area of social housing for rent, ensuring the preservation of capital, calculated according to the following formula:_w

Where:

- Vthqlđc: Actual salary fund after adjustment;

- Vkhql: Reviewed planned salary fund;

- Vp: Salary fund adjusted according to profit, calculated according to the following formula:

 

 

 

Where:

+ Vkhql: Reviewed planned salary fund;

+ Vcđ: Salary fund according to regulations, calculated according to formula (1) stipulated at point b, Clause 2.1, Part B, Section III of this Circular;

+ Pth, Pkh: Actual profit and planned profit of the company;

- Vw: Salary fund adjusted according to productivity, calculated according to the following formula:

 

 

Where:

+ Vkhql: Reviewed planned salary fund;

+ Vp: Salary fund adjusted according to profit, calculated according to formula (2);

+ Wth, Wkh: Actual average productivity and planned productivity of the company, determined according to the regulations stipulated in Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005, issued by the Ministry of Labor, Invalids and Social Affairs. In cases where the company has multiple salary rates based on different criteria, it shall be calculated based on total revenue.

c) For companies that achieve actual profits lower than the plan and average productivity equal to or higher than the plan, the actual salary fund must be adjusted according to the following formula:

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

Where:

- Vthqlđc: Actual salary fund after adjustment;

- Vkhql: Reviewed planned salary fund;

- Vp: Salary fund adjusted according to profit, calculated according to formula (2).

d) For companies that achieve average productivity lower than the plan and actual profit equal to or higher than the plan, the actual salary fund must be adjusted according to the following formula:

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

Where:

- Vthqlđc: Actual salary fund after adjustment;

- Vkhql: Reviewed planned salary fund;

- Vw: Salary fund adjusted according to productivity, calculated according to the following formula:

 

 

Where:

+ Vkhql: Reviewed planned salary fund;

+ Wth, Wkh: Actual average productivity and planned productivity of the company, determined according to the regulations stipulated in Circular No. 09/2005/TT-BLDTBXH dated January 5, 2005, issued by the Ministry of Labor, Invalids and Social Affairs. In cases where the company has multiple salary rates based on different criteria, it shall be calculated based on total revenue.

The actual salary fund after adjustment according to points b, c, and d above must not be lower than the salary fund according to regulations, calculated according to formula (1) stipulated at point b, Clause 2.1, Part B, Section III of this Circular.

đ) For companies that implement loss-making or non-profitable production and business plans, the actual salary fund equals the salary fund according to regulations, calculated according to formula (1) stipulated at point b, Clause 2.1, Part B, Section III of this Circular.

Based on the actual salary fund received and the temporarily advanced salary fund, members of the Board of Directors or the Chairman of the company, General Director, Director, internal auditors determine the remaining salary fund they are entitled to receive. If expenses exceed the actual salary fund received, the excess salary payments must be refunded within the same year.

2.3. Salary regulation:

a) Members of the Board of Directors or the Chairman of the company, General Director, Director are responsible for directing specialized departments to develop a salary regulation to issue as a basis for paying salaries to members of the Board of Directors or the Chairman of the company, General Director, Director, internal auditors according to the degree of completion of planned production and business tasks and the responsibilities of each member;

b) When developing a salary regulation, the company's trade union executive board must participate. This regulation must ensure fairness, democracy, transparency, and must be registered with the owner before implementation.

3. Bonus system:

a) The annual bonus fund for members of the Board of Directors or the Chairman of the company, General Director, Director includes: bonuses taken from the company's general award fund and bonuses taken from the management team's bonus fund according to the regulations stipulated in Circular No. 24/2007/TT-BTC.

b) Based on the annual bonus fund and the degree of completion of planned production and business tasks, the owner specifies the specific bonus extraction ratio, not exceeding 60% of the annual bonus fund to reward members of the Board of Directors or the Chairman of the company, General Director, Director under their management at the end of the year.

c) The remaining annual bonus fund (at least 40% of the annual bonus fund) shall be used to award at the end of the term (called the term bonus fund), based on the degree of completion of the total profit plan for the entire term, specifically:

- In the case where the actual total profit does not fall below the planned total profit for the entire term, the full term bonus fund will be enjoyed.

- In cases where the actual total profit achieved is lower than the planned total profit for the entire term, for every 1% decrease in actual total profit compared to the planned total profit, there must be a corresponding 1% reduction from the remaining bonus fund.

The term for determining the bonus fund for members of the Board of Directors or the Chairman of the company, General Director, Director shall be calculated according to the term of the member of the Board of Directors (for companies with a Board of Directors structure) or the Chairman of the company (for companies with a Chairman structure).

d) Members of the Board of Directors or the Chairman of the company, General Director, Director have the responsibility to direct specialized departments to develop bonus regulations to issue as the basis for awarding members of the Board of Directors or the Chairman of the company, General Director, Director based on the degree of completion of production and business plans and responsibilities of each member.

When developing bonus regulations, the participation of the Company Trade Union Executive Committee must be involved. This regulation must ensure fairness, democracy, transparency, and must be registered with the owner before implementation.

đ) For Supervisors who receive bonuses from the company's reward fund according to Clause 4, Part A, Section III of this Circular, they shall implement the company's bonus regulations.

4. Liability System.

The liability system for members of the Board of Directors or the Chairman of the company, General Director, Director of the company according to Clause 3, Article 5 of Decree No. 86/2007/ND-CP is specified as follows:

a) Members of the Board of Directors or the Chairman of the company, General Director, Director of the company who perform their rights, obligations, and responsibilities in accordance with the Law on Enterprises and the Company Charter shall enjoy the salary and bonus system stipulated in Clause 2 and Clause 3, Part B, Section III of this Circular;

b) In cases where the following situations occur but do not reach the level of criminal prosecution, they shall be handled regarding salary and bonuses as follows:

- Failure to ensure salaries and other benefits for employees in the company or allowing the company to establish incorrect wage rates contrary to labor laws, resulting in violations in capital management, asset management, accounting systems, auditing systems, and other systems prescribed by the state, then they shall not be entitled to additional adjustment factors for the planned wage fund in that year; they shall not receive year-end bonuses and shall not be entitled to the portion of the year's bonus fund in the term bonus fund;

- Making ineffective investment project decisions, failing to recover invested capital, unable to repay debts; causing the company to incur losses (except in special cases: the State has intervened to stabilize the market; increasing depreciation to quickly recover capital, modernize technology, expand production and business; new investments); losing state capital, then they shall be handled as follows:

+ Postponing the time for salary grade promotion by at least 12 months (in cases where there are still grades available for promotion);

+ Only entitled to receive the salary fund based on the salary coefficient according to the company's rank, any allowances (if applicable), and the minimum wage level prescribed by the State; no year-end bonuses and no entitlement to the term bonus fund.

- Causing the company to incur losses for two consecutive years or failing to achieve the profit rate on capital for two consecutive years or having alternating profits and losses but unable to correct them (except in special cases where the State intervenes to stabilize the market; increasing depreciation to quickly recover capital, modernize technology, expand production and business; new investments), then they shall be handled as follows:

+ Demoting one salary grade (for those currently at Grade 2, demote to Grade 1, those currently at Grade 1, demote to Grade 2 of the next lower company rank);

+ Only entitled to receive the salary fund based on the salary coefficient according to the company's rank, any allowances (if applicable), and the minimum wage level prescribed by the Government in those years; no year-end bonuses and no entitlement to the term bonus fund.

IV. IMPLEMENTATION

1. The company's responsibilities according to Article 6 of Decree No. 86/2007/ND-CP are specified as follows:

a) In January each year, build a labor usage plan and register with the owner according to Form No. 1; business plan and profit to serve as the basis for determining the wage rate and planned wage fund for members of the Board of Directors or the Chairman of the company, General Director, Director, Supervisor.

b) In the first quarter of each year, build the wage rate and planned wage fund for members of the Board of Directors or the Chairman of the company, General Director, Director, Supervisor, submit to the owner for review before implementation (Form No. 2a, 2b). After approval, the company must send the wage rate and the planned wage fund report for members of the Board of Directors or the Chairman of the company, General Director, Director, Supervisor to the provincial tax office where the company's headquarters is located to determine taxable income;

c) Determine the actual wage fund and the company's bonus fund according to this Circular;

d) Develop labor norms; technical grade standards for skilled workers, professional standards for civil servants and staff; regulations on job grade promotion, salary grade promotion; company salary payment regulations, bonus regulations according to the law;

đ) In the first quarter of each year, report to the owner on the implementation of the previous year's production and business plan, labor situation of the company, and the previous year's salary, bonuses, and income of employees, members of the Board of Directors, the Chairman of the company, General Director, Director, Supervisor of the company, and simultaneously send to the local Department of Labor, Invalids and Social Affairs (for companies owned by the Provincial People's Committee) according to Form No. 3.

2. The owner's responsibilities according to Article 7 of Decree No. 86/2007/ND-CP are specified as follows:

- Direct, inspect, and supervise the implementation of labor regulations, wage policies, and bonuses for companies under management;

- At the beginning of each year's first quarter, receive and provide comments on the wage rates, salary payment rules, and bonus systems of the company; appraise the planned wage fund, decide on provisional advance payments for salaries and bonuses, and determine the repayment of excess salary and bonus amounts exceeding the state-prescribed limits for members of the Board of Directors or Chairpersons, General Managers, Directors, and Supervisors;

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

- Coordinate with the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance to receive registration of wage rates and wage funds for state-owned limited liability companies classified as special rank;

- In the second quarter of each year, report to the Ministry of Labor, Invalids and Social Affairs on the previous year's production and business results, labor conditions, wages, and bonuses, as well as the construction and registration of planned wage rates for companies under management according to Form No. 4, and the construction and appraisal of planned wage funds, along with the implementation of previous year's wages and bonuses for members of the Board of Directors or Chairpersons, General Managers, Directors, and Supervisors of companies under management according to Form No. 5.

3. The responsibilities of the Ministry of Labor, Invalids and Social Affairs as stipulated in Article 8 of Decree No. 86/2007/NĐ-CP are specified as follows:

a) Coordinate with sector-managing ministries, provincial People's Committees, and centrally-administered municipal People's Committees to guide, inspect, and supervise the implementation of the provisions set forth in this Circular;

b) In the first quarter of each year, receive and provide comments on the appraisal of wage rates and planned wage funds for members of the Board of Directors or Chairpersons, General Managers, Directors, and Supervisors of state-owned limited liability companies with 100% state capital classified as special rank, after exchanging opinions with the Ministry of Finance;

V. IMPLEMENTATION PROVISIONS

1. Based on the guidance provided in this Circular, ministries, ministerial-level agencies, government-affiliated agencies, provincial People's Committees, centrally-administered municipal People's Committees, Chairpersons of the Management Councils or Board of Directors or Chairpersons of parent companies in state-owned economic groups, and Chairpersons of State-Owned Joint Stock Corporations shall direct companies under their management to implement labor management, wage policies, bonuses, and accountability systems for employees, members of the Board of Directors or Chairpersons, General Managers, Deputy General Managers, Directors, Deputy Directors, Chief Accountants, and Supervisors in accordance with state regulations;

2. State-owned limited liability companies whose owners are scientific institutes, educational institutions, and political organizations or political-social organizations shall apply the provisions of this Circular;

3. This Circular shall take effect fifteen days after its publication in the Official Gazette. The provisions of this Circular shall be implemented from the date when Decree No. 86/2007/NĐ-CP of the Government dated May 28, 2007 comes into force;

Any difficulties encountered during implementation should be reported to the Ministry of Labor, Invalids and Social Affairs for consideration and resolution by relevant ministries, provincial People's Committees, centrally-administered municipal People's Committees, and companies./.