Decree No. 203/2004/ND-CP on the minimum wage

DECREE OF THE GOVERNMENT

Regulations on the minimum wage

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;

Pursuant to the Labor Code on June 23, 1994; Law Amending and Supplementing Certain Articles of the Labor Code on April 2, 2002;

Pursuant to Resolution No. 17/2003/QH11 dated November 4, 2003 on the state budget estimate for 2004 and Resolution No. 19/2003/QH11 dated November 16, 2003 on the tasks of the 11th National Assembly session in 2004;

At the proposal of the Minister of Labor, Invalids and Social Affairs,

 DECREE:

Article 1

1. To stipulate the general minimum wage to pay workers for the simplest work under normal working conditions.

2. The general minimum wage is VND 290,000 per month. The general minimum wage will be adjusted based on economic growth rates, living cost indices, and labor supply during each period.

Article 2

1. The general minimum wage prescribed in this Decree shall serve as the basis for calculating wage levels in the wage scale, salary table, and salary allowances in the public sector, calculating wage levels recorded in labor contracts for enterprises that establish wage scales and salary tables according to labor laws, and implementing certain other benefits for workers as prescribed by law.

2. The general minimum wage prescribed in this Decree shall apply to:

a) State agencies, public service units, armed forces, political organizations, and political-social organizations;

b) Companies operating under the Law on State-Owned Enterprises, including: state companies; independent accounting subsidiaries of State-owned corporations established by the State's decision to invest;

c) Companies and businesses operating under the Enterprise Law;

d) Cooperatives, production cooperatives, farms, households, individuals, and other organizations employing workers.

3. The general minimum wage prescribed in Clause 2, Article 1 of this Decree shall also be applied to calculate severance pay for years of service from 2003 onwards for surplus labor under Government Decree No. 41/2002/NĐ-CP dated April 11, 2002 on policies for surplus labor due to restructuring state-owned enterprises, Government Decree No. 155/2004/NĐ-CP dated August 10, 2004 amending and supplementing Government Decree No. 41/2002/NĐ-CP, and for those who cease employment due to streamlining staff under Government Resolution No. 16/2000/NQ-CP dated October 18, 2000 on streamlining staff in administrative agencies, public service units, and Government Resolution No. 09/2003/NQ-CP dated July 28, 2003 amending and supplementing Government Resolution No. 16/2000/NQ-CP (years of service before 2002 are calculated according to guidelines prior to January 1, 2003).

Article 3

1. The additional adjustment factor compared to the general minimum wage applicable in state agencies, public service units, armed forces, political organizations, and political-social organizations shall be implemented according to the provisions of the Government, depending on the state budget capacity and salary sources.

2. The additional adjustment factor compared to the general minimum wage for calculating unit price wages applicable in companies operating under the Law on State-Owned Enterprises shall be implemented according to the provisions of the Government, depending on labor productivity and business efficiency. The additional adjustment factors prescribed in Clauses 1 and 2 of this Article shall not be used to calculate contributions and benefits under social insurance and health insurance schemes and to implement certain other benefits as prescribed by law.

3. Companies and businesses operating under the Enterprise Law; cooperatives, production cooperatives, farms, households, individuals, and other organizations employing workers have the right to set a higher minimum wage than the general minimum wage prescribed in this Decree.

Article 4

1. The Ministry of Labor, Invalids and Social Affairs, after consulting with the Vietnam General Confederation of Trade Unions, representatives of employers, and relevant ministries and sectors, shall submit to the Government for the announcement of the general minimum wage for each period and the additional adjustment factor compared to the general minimum wage applicable in companies operating under the Law on State-Owned Enterprises.

2. The Ministry of Home Affairs shall take the lead, coordinate with the Ministry of Finance and relevant ministries and sectors to submit to the Government for the regulation of the additional adjustment factor compared to the general minimum wage applicable in state agencies, public service units, armed forces, political organizations, and political-social organizations.

Article 5

1. This Decree shall take effect fifteen days after its publication in the Official Gazette.

2. These regulations in this Decree shall be implemented from October 1, 2004.

3. Abolish Clause 1, Article 1; Clause 2, Article 4; and Clause 2, Article 6 of Government Decree No. 03/2003/NĐ-CP dated January 15, 2003 on adjusting salaries, social allowances, and reforming the salary management mechanism.

4. For Vietnamese workers employed in enterprises with foreign investment capital in Vietnam, continue to apply the minimum wage as prescribed in Decision No. 53/1999/QĐ-TTg dated March 26, 1999 of the Prime Minister on some measures to encourage direct foreign investment.

Article 6. Ministers, heads of ministerial-level agencies, heads of agencies under the Government, Chairmen of provincial people's committees directly under the central government are responsible for implementing this Decree./.