Joint Circular No. 18/1998/TTLT-BLDTBXH-BTC guides the determination of the actual wage fund when state-owned enterprises fail to meet budget contribution targets and profit indicators.

JOINT CIRCULAR

Joint Circular No. 18/1998/TTLT-BLDTBXH-BTC dated December 31, 1998 of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance guiding the determination of the actual wage fund when state-owned enterprises fail to meet budget contribution targets and profit indicators.

Implementing Clause 2, Article 1 of Decree No. 28/CP dated March 28, 1997 of the Government on the reform of salary and income management in state-owned enterprises, the Joint Circular of the Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance guides the determination of the actual wage fund when state-owned enterprises fail to meet budget contribution targets and profit indicators, as follows:

I. APPLICABLE OBJECTS.

The applicable objects are state-owned enterprises as defined in Circular No. 13/LĐTBXH-TT dated April 10, 1997 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of Decree No. 28/CP dated March 28, 1997 of the Government on the reform of salary and income management in state-owned enterprises.

II. DETERMINATION OF THE ACTUAL WAGE FUND WHEN STATE-OWNED ENTERPRISES FAIL TO MEET BUDGET CONTRIBUTION TARGETS AND PROFIT INDICATORS

1/ When enterprises fail to meet budget contribution targets:

During the production and business process, state-owned enterprises must be responsible for paying the actual amounts due to the State budget according to the Law. If enterprises violate this leading to failure to meet budget contribution targets, they will be handled according to the Law on Taxation and other related guiding documents.

2/ When enterprises fail to meet profit realization targets:

When realized profits are lower than the previous year, enterprises must reduce the wage fund corresponding to the decrease in profit compared to the previous year, following one of the two methods below:

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

Vth = Vđg - ( Pnt - Pth ) + Vpc + Vbs + Vtg

Where:

- Vth: the actual wage fund of the enterprise;

- Vđg: the wage fund calculated based on the assigned unit price corresponding to the volume of products realized, or revenue (sales) realized, or total income minus total expenses (excluding wages) realized, or realized profit;

- Pnt: realized profit of the previous year;

- Pth: reported profit of the current year;

- Vpc: the fund for additional allowances and other benefits (if any);

- Vbs: the supplementary wage fund;

- Vtg: the overtime wage fund.

The calculation of Vpc, Vbs, and Vtg (if applicable) is determined according to the provisions in Clause a, Point 2, Part C, Section IV of Circular No. 13/LĐTBXH-TT dated April 10, 1997 of the Ministry of Labor, Invalids and Social Affairs.

Method 2: The actual wage fund is calculated based on the principle that for every 1% decrease in profit compared to the previous year, there is a 0.5% reduction in the adjusted wage fund increase, but the deduction amount does not exceed 50% of the adjusted wage fund increase, and is calculated using the following formula:

Where:

- Vth: the actual wage fund of the enterprise;

- Vcđ: the wage fund under regulations, determined by multiplying the number of quota workers with the average job grade salary coefficient (including wage allowances) and the general minimum wage set by the Government (in 1998 it was 144,000 VND/month);

- Vđc: the adjusted wage fund increase, determined by subtracting the wage fund under regulations (Vcđ) from the wage fund calculated based on the assigned unit price (Vđg as stated in Method 1);

- Pnt: realized profit of the previous year;

- Pth: reported profit of the current year;

- Vpc, Vbs, Vtg are determined as in Method 1 above.

Example: Enterprise A had the following performance indicators in 1998:

- The approved wage rate for 1998 is: 15 dong/1,000 dong revenue.

- The wage fund under regulations is: 800 million dong.

- The wage fund (Vpc, Vbs, Vtg) is: 300 million dong

The actual wage fund for settlement in 1998 is as follows:

* Method 1:

- The wage fund calculated based on the assigned unit price corresponding to the realized revenue (110,000 million dong) is:

110,000 x 15/1,000 = 1,650 million dong.

- The portion of the wage fund reduced corresponding to the decrease in realized profit in 1998 compared to 1997 is:

( 1,000 million dong - 800 million dong ) = 200 million dong.

- The remaining wage fund after reduction is:

( 1,650 million dong - 200 million dong + 300 million dong ) = 1,750 million dong.

* Method 2:

- The wage fund calculated based on the assigned unit price is: 1,650 million dong.

- The adjusted wage fund increase is:

1,650 million dong - 800 million dong = 850 million dong.

The actual wage fund after reduction is:

III. IMPLEMENTATION.

1/ Based on the provisions and guidance in this Circular, the Chairman of the Board of Directors (for enterprises with a Board of Directors), the General Director or Managing Director of state-owned enterprises shall determine the actual wage fund of the enterprise when profit realization targets are not met, aiming to use the wage fund reasonably without exceeding the prescribed limit, avoiding arrears or deficits in the wage fund which would affect the living standards of employees and the production and business plan for the next year, while serving as a basis for annual financial settlement according to Decree No. 59/CP dated October 3, 1996 of the Government and guiding documents of the Ministry of Finance.

2/ For important enterprises producing key products ensuring major economic balances and making significant contributions to the State budget, where the State adjusts policies and mechanisms causing a substantial decrease in realized profits compared to the previous year, significantly affecting employee salaries and incomes, the Heads of Ministries managing industries, provincial People's Committees Chairmen, and the Chairman of the Board of Directors of the State Corporation 91/TTg shall examine and issue documents to the Joint Ministries for specific resolution.

3/ The effective wage rate for determining the actual wage fund of enterprises is specified as follows:

- For enterprises classified as special category: The Chairman of the Board of Directors decides the wage rate corresponding to the budget contribution and profit targets of member units, but the total must not exceed the wage rate already reviewed by the Ministry of Labor, Invalids and Social Affairs;

- For enterprises directly under the industry-managing ministries: the wage rate according to the decision of the Head of the industry-managing ministry or the authorized agency according to the分级管理系统，请问您需要我继续翻译剩余的内容吗？这样可以确保翻译的完整性和准确性。

- For local enterprises: single wage rate determined by the Director of the Provincial Department of Labor - Invalids and Social Affairs, the Director of the Industry Management Department, or the Chairman of the People's Committee of the district or county, depending on the local management hierarchy;

- For State-owned corporations established pursuant to Decision No. 90/TTg dated March 7, 1994 of the Prime Minister, which are not classified as special category, the Chairman of the Board of Directors (for enterprises with a Board of Directors) or the General Director (for enterprises without a Board of Directors) shall determine the single wage rate corresponding to the budget contribution and profit targets of the member units, but the total must not exceed the single wage rate approved by the Ministry managing the industry or the Director of the Provincial Department of Labor - Invalids and Social Affairs;

4/ The Ministries managing industries, the People's Committees of provinces and centrally governed cities, and the Chairmen of the Boards of Directors (for enterprises with a Board of Directors) are responsible annually for compiling and reporting the results of determining the actual wage fund implementation of the enterprises under their management to the Joint Ministry of Labor - Invalids and Social Affairs - Finance in the first quarter of the following year;

5/ This Circular takes effect from the date of signature and applies to settle the wage fund from 1998 onwards;

During the implementation process, if there are any difficulties, the Ministries managing industries, the People's Committees of provinces and centrally governed cities, and state-owned enterprises are requested to reflect them to the Joint Ministry of Labor - Invalids and Social Affairs - Finance for study and resolution.