Circular No. 23/2011/TT-BLDTBXH guides the implementation of the minimum wage for workers employed by companies, enterprises, cooperatives, production cooperatives, farms, households, individuals, and organizations that hire labor.

CIRCULAR

Guidelines for implementing the minimum wage level for workers employed by companies, enterprises,

cooperatives, production cooperatives, farms, households, individuals, and organizations that hire labor.

______________________

 
Pursuant to Decree No. 70/2011/NĐ-CP dated August 22, 2011 of the Government stipulating the minimum wage level for agricultural workers employed by companies, enterprises, cooperatives, production cooperatives, farms, households, individuals, and organizations that hire labor;

Pursuant to Decree No. 186/2007/NĐ-CP dated December 25, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor - War Invalids and Social Affairs;

The Ministry of Labor - Invalids and Social Affairs provides guidelines for implementing the minimum wage level for workers employed by companies, enterprises, cooperatives, production cooperatives, farms, households, individuals, and organizations that hire labor as follows:

Article 1. Scope of Regulation

1. Enterprises established, managed, and operated under the Enterprise Law (including foreign-invested enterprises in Vietnam).

2. Cooperatives, cooperative unions, production cooperatives, farms, households, individuals and other Vietnamese organizations that hire labor.

3. Foreign organizations, international organizations, and foreign individuals in Vietnam that hire labor (except where international treaties to which the Socialist Republic of Vietnam is a member provide otherwise).

Companies, enterprises, organizations, and individuals specified in Clauses 1, 2, and Clause 3 of Article 1 of this Circular shall hereinafter be referred to collectively as enterprises.

Article 2. Applicability

1. Workers who work under labor contracts as prescribed in 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 on labor contracts.

2. Management officials receiving salaries in enterprises, including members of the Board of Directors, members of the Board of Members or the Chairman of the company, General Director, Director, Deputy General Director, Deputy Director, Chief Accountant, Auditor, and other management staff receiving salaries.

Article 3. Minimum Wage Levels

1. The minimum wage level applicable from October 1, 2011 to December 31, 2012 is stipulated in Article 2 of Decree No. 70/2011/NĐ-CP dated August 22, 2011 of the Government (hereinafter referred to as the minimum wage level) as follows:

a) VND 2,000,000 per person per month applicable to enterprises operating in areas within Region I.

b) VND 1,780,000 per person per month applicable to enterprises operating in areas within Region II.

c) VND 1,550,000 per person per month applicable to enterprises operating in areas within Region III.

d) VND 1,400,000 per person per month applicable to enterprises operating in areas within Region IV.

2. The areas applying the minimum wage level are defined in the Appendix issued together with Decree No. 70/2011/NĐ-CP dated August 22, 2011 of the Government.

3. The application of the regional minimum wage level in certain specific cases is stipulated as follows:

a) Areas whose names have changed or have been divided shall temporarily implement the minimum wage level applicable to the area before the name change or division; if a new area is established from areas with different minimum wage levels, it shall implement the minimum wage level according to the area with the highest minimum wage level; if a provincial city is established from an area or multiple areas within Region IV, it shall implement the minimum wage level applicable to areas within Region III.

b) Enterprises operating in contiguous areas with different minimum wage levels shall implement the minimum wage level according to the area with the highest minimum wage level; if an enterprise has branches or subsidiaries operating in areas with different minimum wage levels, the branch or subsidiary operating in a particular area shall implement the minimum wage level according to that area.

c) Industrial zones and export processing zones located in areas with different minimum wage levels shall implement the minimum wage level according to the area with the highest minimum wage level; if an industrial zone or export processing zone has sub-zones located in areas with different minimum wage levels, the enterprise operating in a sub-zone located in a particular area shall implement the minimum wage level according to that area.

b) The lowest wage paid to trained workers (including those trained by the enterprise itself) must be at least 7% higher than the minimum wage level for the region.

1. The minimum wage level set by the Government is the lowest wage level serving as the basis for enterprises and workers to negotiate wages paid to workers, but the monthly wage paid to untrained workers performing the simplest tasks under normal working conditions, ensuring the standard number of working days in a month and completing the agreed labor quota or work, must not be lower than the minimum wage level set by the Government.

2. The lowest wage payable to trained workers (including workers trained by the enterprise itself) must be at least 7% higher than the minimum wage level set by the Government.

Trained employees include:

- Those who have been granted vocational certificates, diplomas, or secondary vocational diplomas as stipulated in Decree No. 90/CP dated November 24, 1993 on the structure of the national education system, the system of educational and training certificates;

- Those who have been issued vocational certificates or vocational diplomas in accordance with the Education Law in 1998 and the Education Law in 2005;

- Those who have been granted certificates under regular vocational training programs, primary vocational certificates, secondary vocational graduation diplomas, higher vocational graduation diplomas, or have completed vocational training programs under vocational training contracts as prescribed in the Vocational Training Law;

- Those who have been issued vocational certificates or diplomas from foreign training institutions;

- Those who have been trained in vocational skills by enterprises or self-taught and tested and assigned to jobs requiring vocational training by enterprises.

3. The minimum wage level set by the Government serves as the basis for building and adjusting wage scales for workers employed in enterprises when constructing and issuing wage scales in accordance with labor laws as follows:

a) For enterprises that have already established and issued wage scales, they shall base their adjustments of wage scales, salary supplements, wage levels in labor contracts, and other systems for workers on the minimum wage level set by the Government, but must ensure the principles of establishing wage scales as prescribed in 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, and Circular No. 13/2003/TT-BLĐTBXH dated May 30, 2003, Circular No. 14/2003/TT-BLĐTBXH dated May 30, 2003, and Circular No. 28/2007/TT-BLĐTBXH dated December 5, 2007 of the Ministry of Labor - Invalids and Social Affairs.

b) For enterprises that have not established a wage scale or wage table, the minimum regional wage level prescribed by the Government shall be the basis for determining the wage levels when establishing the wage scale and wage table, and the wage allowances of the enterprise, but it must ensure the principles of establishing the wage scale and wage table as stipulated by labor laws (the wage levels may be defined as a ratio compared to the minimum wage level chosen by the enterprise or a specific amount of money, but the wage level of grade 1 in the wage scale and wage table must be higher than the minimum regional wage level prescribed by the Government); determine and adjust the wage levels in labor contracts and implement other systems for workers in accordance with the provisions.

c) The determination of the adjustment levels of wages in the wage scale and wage table (for enterprises that have already established and issued a wage scale and wage table) or the determination of the wage levels when establishing a wage scale and wage table (for enterprises that have not yet established a wage scale and wage table); the adjustment levels of wages in labor contracts and other systems for workers as stipulated in points a and b, Clause 3 of this Article, shall be agreed upon by the enterprise, the Trade Union Committee of the enterprise or the Temporary Trade Union Committee and the workers, but it must ensure a reasonable wage relationship between untrained workers and trained workers, workers with high professional and technical qualifications, newly recruited workers and workers with long-term service at the enterprise.

4. When applying the provisions of this Circular, enterprises shall not eliminate or reduce the wage systems for overtime work, night work, wages or allowances for working under harsh conditions, toxic environments, and the system of in-kind benefits for positions with heavy and toxic work, and other systems as prescribed by labor laws.

Any allowances, subsidies, and bonuses prescribed by the enterprise shall be implemented according to the agreement in the labor contract or collective labor agreement or in the enterprise regulations as prescribed by labor laws.

5. Encourage enterprises to agree to apply a higher minimum wage than the minimum regional wage level prescribed by the Government as the basis for implementing the systems stipulated in Clause 3, Article 4 of this Circular; pay workers a higher wage than the provisions in Clause 1 and Clause 2, Article 4 of this Circular.

Article 5. Effective Date

1. This Circular takes effect from October 31, 2011.

2. Encourage enterprises to organize midday meals to ensure the health of workers, contributing to increasing labor productivity and improving business efficiency. The amount for midday meals and the organization of midday meals shall be agreed upon by the enterprise, the Trade Union Committee of the enterprise or the Temporary Trade Union Committee and the workers on the basis of ensuring nutrition, quality, and food safety and hygiene.

For a single-member limited liability company owned by the State, a parent company of a state economic group, or a state company that has not been converted into a limited liability company or a joint-stock company, organizations and units currently applying the wage system of state companies shall continue to implement the midday meal allowance as prescribed in Circular No. 12/2011/TT-BLDTBXH dated April 26, 2011 of the Ministry of Labor, Invalids, and Social Affairs.

3. Companies, organizations, and units specified in Clause 4, Article 5 of Decree No. 70/2011/NĐ-CP dated August 22, 2011 of the Government shall apply the general minimum wage to calculate the unit price of wages and the wage levels in the wage scale, wage table, and allowances issued together with Decree No. 205/2004/NĐ-CP, Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government as the basis for implementing social insurance, health insurance, unemployment insurance, and other systems as prescribed by labor laws; pay workers in accordance with the regulations on applying the minimum regional wage level as stipulated in Clause 1 and Clause 2, Article 4 of this Circular.

The application of the general minimum wage and the minimum regional wage to determine the unit price of wages, planned wage fund, and actual wage fund shall be applied in the following specific cases:

3.1. In 2011:

Enterprises, organizations, and units that do not establish and report the unit price of wages as prescribed, or do not have profits or incur losses, or have average labor productivity and realized profits lower than the plan, when determining the actual wage fund, shall apply the minimum regional wage level prescribed by the Government (from January 1, 2011 to September 30, 2011 as prescribed in Decree No. 108/2010/NĐ-CP dated October 29, 2010; from October 1, 2011 to December 31, 2011 as prescribed in Decree No. 70/2011/NĐ-CP dated August 22, 2011) to determine the wage fund for workers and the wage fund for managerial staff as prescribed in Circular No. 07/2005/TT-BLDTBXH, Circular No. 08/2005/TT-BLDTBXH dated January 5, 2005, and Circular No. 27/2010/TT-BLDTBXH dated September 14, 2010 of the Ministry of Labor, Invalids, and Social Affairs.

3.2. From 2012:

a) Companies, organizations, units that ensure all conditions as prescribed in point b, Clause 1, Section III Circular No. 07/2005/TT-BLDTBXH dated January 5, 2005; Article 5 of Circular No. 27/2010/TT-BLDTBXH dated September 14, 2010 of the Ministry of Labor, Invalids and Social Affairs may choose to apply a higher minimum wage rate (with no upper limit) than the general minimum wage rate set by the Government for each period to determine the unit price of wages for workers and the wage fund plan for managerial staff. In addition, companies, organizations, units may choose to apply an additional adjustment factor to determine the wage fund plan for managerial staff according to Circular No. 08/2005/TT-BLDTBXH dated January 5, 2005 and Circular No. 27/2010/TT-BLDTBXH dated September 14, 2010 of the Ministry of Labor, Invalids and Social Affairs when they also ensure the condition that the average planned wage increase (as a percentage) compared to the previous year's actual implementation (from the approved and audited wage fund) of dedicated managerial staff does not exceed the average planned wage increase (as a percentage) compared to the previous year's actual implementation of workers.

b) Companies, organizations, units that do not ensure all conditions as prescribed in point b, Clause 1, Section III Circular No. 07/2005/TT-BLDTBXH dated January 5, 2005; Article 5 of Circular No. 27/2010/TT-BLDTBXH dated September 14, 2010 of the Ministry of Labor, Invalids and Social Affairs, or have production and business plans with losses or without profit shall apply the general minimum wage rate set by the Government for each period to determine the unit price of wages for workers and the wage fund plan for managerial staff according to Circular No. 07/2005/TT-BLDTBXH, Circular No. 08/2005/TT-BLDTBXH dated January 5, 2005 and Circular No. 27/2010/TT-BLDTBXH dated September 14, 2010 of the Ministry of Labor, Invalids and Social Affairs.

c) Companies, organizations, units that do not establish and report the unit price of wages, or have production and business results with losses or without profit, or have actual labor productivity and realized profit lower than the plan shall apply the general minimum wage rate set by the Government for each period to determine the wage system fund for workers and the wage system fund for managerial staff (in cases where the unit price of wages is not established and reported, or production and business results have losses or without profit), the wage system fund when adjusting the realized wage fund based on labor productivity and profit (in cases where actual average labor productivity and realized profit are lower than the plan).

For companies, organizations, units specified in points b and c, Clause 3.2 of this Article, when determining the realized wage fund, for workers whose wage system level (current salary grade according to the salary scale issued together with Decree No. 205/2004/ND-CP, Decree No. 204/2004/ND-CP of the Government multiplied by the general minimum wage rate) is lower than the regional minimum wage rate set by the Government, it shall be calculated at the regional minimum wage rate to pay wages to workers.

d) Project management boards under companies, organizations, units may choose to apply a higher minimum wage rate than the general minimum wage rate, but must not exceed the minimum wage rate chosen by the company, organization, unit to calculate the unit price of wages and must ensure that it does not increase the management costs of the project management board as the basis for establishing the wage fund to pay workers.

4. The costs for implementing the regional minimum wage as prescribed in this Circular shall be accounted for in the production cost or business expenses of the enterprise.

5. Repeal Circular No. 36/2010/TT-BLDTBXH dated November 18, 2010 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of regional minimum wage rates for enterprises, cooperatives, cooperative unions, production cooperatives, farms, households, individuals, and other organizations in Vietnam that hire labor: Clause 1 and Clause 2, Article 4 of Circular No. 12/2011/TT-BLDTBXH dated April 26, 2011 of the Ministry of Labor, Invalids and Social Affairs guiding the implementation of the general minimum wage rate for limited liability companies with one member owned by the State.

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 directing, urging, and inspecting enterprises to implement in accordance with the provisions of this Circular.

During the implementation process, if there are difficulties, please reflect them to the Ministry of Labor, Invalids and Social Affairs for timely supplementary guidance./.