Decree No. 197-CP provides detailed regulations and guidance on implementing certain provisions of the Labor Code concerning wages.

DECREE

RESOLUTION NO. 197-CP OF THE GOVERNMENT DATED DECEMBER 31, 1994 ON DETAILING AND GUIDING IMPLEMENTATION OF CERTAIN ARTICLES OF THE LABOR CODE REGARDING WAGES

THE GOVERNMENT

Pursuant to the Government Organization Law dated September 30, 1992;
Based on the Labor Code dated June 23, 1994;
At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREE:

Chapter 1:

OBJECTS AND SCOPE OF APPLICATION

Article 1.

The objects and scope of application of wages under Articles 2 and 3 of the Labor Code are workers employed in the following organizations:

1- State-owned enterprises;

2- Enterprises belonging to other economic sectors;

3- Public service units operating under economic accounting systems;

4- Business and service organizations under administrative agencies, public service units, armed forces, people's mass organizations, political and social organizations, and other economic sectors permitted to register for practice;

5- Foreign-invested enterprises, enterprises within Export Processing Zones and Industrial Parks;

6- Foreign and international organizations operating on Vietnamese territory that hire Vietnamese laborers, except where international treaties to which the Socialist Republic of Vietnam is a party provide otherwise.

Article 2.

The objects and scope not subject to application under Article 4 of the Labor Code are defined as follows:

1- Civil servants and employees working in state administrative and public service agencies;

2- Individuals holding positions elected, appointed, or nominated in state agencies;

3- Members of people's mass organizations and other political and social organizations according to their respective regulations; cooperative members;

4- Officers, non-commissioned officers, and soldiers in the armed forces.

Chapter 2:

MINIMUM WAGE, PAY SCALE SYSTEMS

Article 3.

1- The minimum wage level under Article 56 and Clause 2 of Article 132 of the Labor Code is the wage paid to workers performing the simplest tasks (without training) under normal working conditions and environments.

2- The Ministry of Labor, War Invalids and Social Affairs, after consulting with the Vietnam General Confederation of Labor and representatives of employers, shall submit to the Government for decision and announcement of the minimum wage levels for each period.

3- The Ministry of Labor, War Invalids and Social Affairs, after consulting with the Vietnam General Confederation of Labor, the State Committee on Cooperation and Investment, and representatives of employers, shall submit to the Government for announcement or the Government may delegate the Ministry of Labor, War Invalids and Social Affairs to announce the minimum wage levels for Vietnamese workers employed in foreign-invested enterprises, within Export Processing Zones and Industrial Parks, and foreign and international organizations operating in Vietnam.

Article 4.

The pay scale system under Article 57 of the Labor Code is defined as follows:

1- The Government shall announce the pay scales and wage allowances applicable in state-owned enterprises, business and service organizations, and public service units operating under economic accounting systems.

2- The Ministry of Labor, War Invalids and Social Affairs, based on the state's wage policy, shall guide the implementation of wage systems in enterprises and production, business, and service organizations belonging to other economic sectors.

Chapter 3:

WAGE PAYMENT REGIME AND BONUSES

Article 5.

FORMS OF PAYMENT UNDER ARTICLE 58 OF THE LABOR CODE ARE AS FOLLOWS:

1- Payment by time is a form of payment made to workers based on actual hours worked:

Monthly wage is a fixed monthly wage based on the labor contract;

Weekly wage is the wage paid for a week's work determined by multiplying the monthly wage by 12 months and dividing by 52 weeks;

Daily wage is the wage paid for a day's work determined by dividing the monthly wage by 26 days;

Hourly wage is the wage paid for an hour's work determined by dividing the daily wage by the number of standard hours specified in Article 68 of the Labor Code.

2- Payment by product is a form of payment made to workers based on the quantity and quality of products they produce.

3- Piece-rate payment is a form of payment made to workers based on the volume and quality of work completed.

Article 6.

Special cases provided for in Clause 1 of Article 59 of the Labor Code include situations where power or water outages occur, preventive measures against workplace accidents and occupational diseases are applied, workplaces are relocated, or difficulties arise in production and business operations, and the employer has taken all possible measures but cannot resolve them, then delayed payment of wages up to one month is allowed, and compensation must be provided to the worker as follows:

If the wage payment delay is less than 15 days, no compensation is required.

If the wage payment delay is 15 days or more, compensation must be provided in an amount at least equal to the delayed payment multiplied by the interest rate for non-term savings deposits published by the State Bank at the time of wage payment.

Article 7.

Deductions from workers' wages under Clause 1 of Article 60 of the Labor Code are as follows:

Based on the monthly wage received by the worker after deducting social insurance, health insurance, and personal income tax, the employer shall gradually deduct amounts temporarily advanced as stipulated in Article 67 and material damage compensation as stipulated in Article 89 of the Labor Code.

Article 8.

Payment of wages when workers work overtime or night shifts under Article 61 of the Labor Code is as follows:

1- If payment is by time, workers will be paid for overtime work when working beyond the standard hours.

2- If payment is by product or piece-rate, workers will be paid for overtime work when the employer requires additional production or work outside the standard hours.

3- Workers who work night shifts will be paid at least 30% more than the daytime wage if they do not regularly work nights; at least 35% more than the daytime wage if they regularly work in three-shift rotations or primarily work nights.

Article 9.

The deduction of bonuses from remaining profits (after fulfilling state obligations) to reward workers who have been employed in enterprises for one year or more under Article 64 of the Labor Code is as follows:

1- For state-owned economic enterprises and business organizations, the maximum amount of bonus shall not exceed six months' salary as stipulated in the labor contract.

2- For foreign-invested enterprises and enterprises within Export Processing Zones and Industrial Parks, the amount of bonus shall be agreed upon by both parties, but it must not be less than one month's salary as stipulated in the labor contract.

3- For private enterprises, the amount of bonus shall be agreed upon by both parties, but the minimum percentage of profit to be allocated for bonuses shall be ten percent.

Article 10.

The advance payment of wages for workers under Articles 1 and 2 of Clause 67 of the Labor Code shall be regulated as follows:

1- When the worker or their family encounters difficulties, the worker may receive an advance payment of wages, but it must be at least equal to one month's salary. The method of paying the advance wage shall be agreed upon by both parties, but interest shall not be charged on the advance payment.

2- When a worker must temporarily stop working to fulfill civic duties for one week or more, the worker shall receive an advance payment of wages corresponding to the number of days they are temporarily absent from work and this amount shall be deducted from their wages according to Article 7 of this Decree.

Article 11.

The advance payment of wages for workers who are detained or imprisoned under Article 3 of Clause 67 of the Labor Code shall be regulated as follows:

1- During the period of detention or imprisonment, the employer shall provide an advance payment of fifty percent of the worker's salary as stipulated in the previous month's contract.

2- Upon completion of the detention or imprisonment period, if the worker is at fault, they shall not have to repay the advance payment of wages; if the employer is at fault, the employer shall pay the full salary as stipulated in the labor contract; if the fault lies with the legal authority, that authority shall be dealt with according to the law.

Article 12.

1- Annual leave, holiday leave, and leave with pay for personal matters shall be paid based on time-based wages, calculated as monthly wages (rank-based wages, position-based wages, regional allowances, hardship allowances, and position-based allowances if applicable) divided by twenty-six days multiplied by the number of days of leave as prescribed.

2- Overtime wages and night shift wages shall be calculated according to the wage payment methods stipulated in Article 5 of this Decree.

3- If work ceases during a work shift as stipulated in Article 62, Clause 1 of the Labor Code for two hours or more, wages for cessation of work shall be paid.

Article 13.

Wages used as the basis for calculating severance benefits, unemployment benefits, and compensation for occupational accidents and diseases shall be the wages stipulated in the labor contract, averaged over the six consecutive months immediately preceding the occurrence of the event, including rank-based wages, position-based wages, regional allowances, hardship allowances, and position-based allowances (if applicable).

Article 14.

Wages paid during the periods specified in Articles 41, 53, 62, 73, 74, 76, 77, 78, and 92 of the Labor Code shall be the wages of the previous month and shall be calculated according to the time-based wage payment methods stipulated in Article 5, Clause 1 of this Decree.

Chapter 4:

OTHER PROVISIONS

Article 15.

Apprentices and trainees stipulated in Article 23, Clause 2 of the Labor Code, if directly producing products, shall be paid wages. The level of wages shall be agreed upon by both parties but shall not be lower than seventy percent of the rank-based wages of workers performing the same job.

Article 16.

Female workers stipulated in Article 111 of the Labor Code, if performing the same job as male workers, shall be paid equally. When increasing wages, if female workers meet the conditions and standards of male workers, priority shall be given to increasing the wages of female workers.

Article 17.

Young workers stipulated in Article 121 of the Labor Code, if performing the same job as adult workers, shall be paid equally.

Article 18.

Workers who are elderly persons, if their working hours are shortened according to Article 123 of the Labor Code, shall be paid their full wages.

Article 19.

Workers who are disabled persons, if performing the same job as regular workers, shall be paid equally.

Article 20.

Workers with high-level professional and technical qualifications stipulated in Article 129 of the Labor Code shall be subject to the wage scale for senior specialists, experts, and masters based on their positions and professional standards. Enterprises are entitled to establish wage mechanisms to attract such workers.

Article 21.

Vietnamese citizens permitted to work abroad under the subcontracting form stipulated in Article 134, Clause 2 of the Labor Code shall be paid part of their wages in the local currency or convertible foreign currency during their time working abroad.

Article 22.

Based on the guidance of the Ministry of Labor, Invalids, and Social Affairs, foreign-invested enterprises and enterprises within Export Processing Zones and Industrial Parks are entitled to:

1- Establish and apply wage scales, wage levels, allowances, and wage payment regulations to ensure the interests of all parties.

2- Determine the salaries of General Directors (Chairmen), Deputy General Directors (Vice Chairmen), and other key officials in the enterprise for the Board of Directors to decide.

Article 23.

The Ministry of Labor, Invalids, and Social Affairs, based on the provisions of Article 136 of the Labor Code regarding special occupations in the arts sector, shall submit to the Government for consideration and decision.

Chapter 5:

IMPLEMENTING PROVISIONS

Article 24.

This Decree shall take effect from January 1, 1995.

Article 25.

The Minister, Heads of Ministries equivalent to Ministries, Heads of Agencies under the Government, and Chairpersons of People's Committees of provinces and centrally-administered cities shall be responsible for implementing this Decree.