Circular No. 35/2009/TT-BLDTBXH guiding the implementation of the minimum wage for state-owned enterprises and joint-stock companies with 100% state-owned charter capital.

CIRCULAR

Guidelines for implementing the minimum wage level for state-owned enterprises and

limited liability companies with 100% state capital ownership

____________________

Pursuant to Decree No. 97/2009/NĐ-CP dated October 30, 2009 of the Government stipulating the minimum wage levels for workers employed by companies, enterprises, cooperatives, joint ventures, farms, households, individuals, and other organizations in Vietnam 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;

After receiving opinions from the Vietnam General Confederation of Labor, representatives of employers, and relevant ministries and sectors, the Ministry of Labor - Invalids and Social Affairs provides guidelines for implementing the minimum wage levels for state-owned enterprises and limited liability companies with 100% state capital ownership as follows:

Article 1. Scope of application

1. Enterprises established, managed, and operated under the Law on State-Owned Enterprises include:

a) State-owned corporations;

b) Independent state-owned enterprises;

c) Parent companies that are state-owned enterprises within economic groups decided by the Prime Minister to establish;

d) Parent companies that are state-owned enterprises within corporations or companies operating under the parent-subsidiary model;

đ) Corporations and independent subsidiaries with 100% state capital belonging to economic groups during the period before conversion and re-registration pursuant to Decree No. 139/2007/NĐ-CP dated September 5, 2007 of the Government detailing and guiding the implementation of certain provisions of the Enterprise Law;

e) Independent subsidiaries with 100% state capital belonging to corporations decided by the State to invest and establish.

2. The Vietnam Deposit Insurance Corporation, the Vietnam Development Bank, project management boards, and other state organizations applying salary systems similar to those of state-owned enterprises.

3. Limited liability companies with 100% state capital ownership are established, managed, and operated under the Enterprise Law.

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

Article 2. Applicability

1. Workers employed under labor contracts 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 regarding labor contracts.

2. Members of the Board of Directors, members of the Management Board, members of the Supervisory Board, members of the Board of Members (or Chairman of the company), Supervisors, General Directors, Directors, Deputy General Directors, Deputy Directors, Chief Accountants (excluding General Directors, Directors, Deputy General Directors, Deputy Directors, and Chief Accountants working under contracts).

Article 3. Implementation of the minimum wage level

1. The minimum wage level for paying wages to workers performing the simplest work under normal working conditions in enterprises shall be implemented from January 1, 2010, according to Article 2 of Decree No. 97/2009/NĐ-CP as follows:

a) A monthly rate of 980,000 VND applicable to enterprises operating in areas within Region I, including:

- Districts in Hanoi City;

- Districts in Ho Chi Minh City.

b) A monthly rate of 880,000 VND applicable to enterprises operating in areas within Region II, including:

- Counties of Gia Lam, Dong Anh, Soc Son, Thanh Tri, Tu Liem, Thanh Xuan, Hoai Duc, Dan Phuong, Thach That, Quoc Oai, and Son Tay Town in Hanoi City;

- Counties in Ho Chi Minh City;

- Counties and districts of Thuy Nguyen, An Duong, An Lao in Hai Phong City;

- The districts under the city of Da Nang;

- The districts under the city of Can Tho;

- Ha Long city in Quang Ninh province;

- Bien Hoa City, Long Khanh Town, and counties of Nhon Trach, Long Thanh, Vinh Cuu, Trang Bom in Dong Nai Province;

- Thu Dau Mot Town and counties of Thu An, Di An, Ben Cat, Tan Uyen in Binh Duong Province;

- Vung Tau City, Ba Ria Town, and Tan Thanh County in Ba Ria-Vung Tau Province. c) A monthly rate of 810,000 VND applicable to enterprises operating in areas within Region III, including:

- Provincial cities directly under provinces (except provincial cities mentioned in Region II);

- From Son Town and counties of Que Vo, Tien Du, Yen Phong in Bac Ninh Province;

- Remaining counties in Hanoi city;

- Counties of Viet Yen, Yen Dung in Bac Giang Province;

- Hoanh Bo County in Quang Ninh Province;

- Hung Yen Town and counties of My Hao, Van Lan, Van Giang, Yen My in Hung Yen Province;

- Counties of Cam Giang, Nam Sach, Chi Linh, Kim Thanh, Kinh Mon, Gia Loc, Binh Giang, Tu Ky in Hai Duong Province;

- Phuc Yen Town and Binh Xuyen County in Vinh Phuc Province;

- Towns of Uong Bi, Cam Pha in Quang Ninh Province;

- Remaining counties in Hai Phong city;

- Counties of Dien Ban, Dai Loc in Quang Nam Province;

- Bao Loc Town in Lam Dong Province;

- Cam Ranh Town in Khanh Hoa Province;

- Trang Bang County in Tay Ninh Province;

- Dong Xoei Town and counties of Chon Than, Dong Phu in Binh Phuoc Province;

- Remaining counties in Binh Duong Province;

- Tan An Town and counties of Duc Hoa, Ben Luc, Can Douc, Can Giuoc in Long An Province;

- The remaining districts in the province of Dong Nai;

- Counties of Chau Duc, Long Dien, Dat Doc, Xuyen Moc in Ba Ria-Vung Tau Province.

- The districts under the city of Can Tho;

d) A monthly rate of 730,000 VND applicable to enterprises operating in areas within Region IV, which includes all remaining areas. c) A monthly rate of 810,000 VND applicable to enterprises operating in areas within Region III, including:

2. For enterprises with units or branches operating in areas with different minimum wage regions, the unit or branch operating in a specific region applies the minimum wage level of that region.

3. Enterprises specified in Clause 1 and Clause 2 of Article 1 of this Circular apply the minimum wage level to calculate the unit price of wages according to Clause 1, Article 3 of Decree No. 97/2009/NĐ-CP as follows:

a) Enterprises ensuring all conditions stipulated in Article 4 of Decree No. 206/2004/NĐ-CP dated December 14, 2004 of the Government and point b, Clause 1, Section III of Circular No. 07/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor - Invalids and Social Affairs may apply a higher minimum wage level to calculate the unit price of wages, wherein enterprises may apply an adjustment factor (K

) not exceeding 1.34 times the general minimum wage level._đcFor enterprises ensuring all conditions stipulated in Article 4 of Decree No. 206/2004/NĐ-CP and point b, Clause 1, Section III of Circular No. 07/2005/TT-BLDTBXH and having planned profits higher than 5% compared to the actual profit of the previous year, they may apply an additional adjustment factor (K

For a company that meets the conditions stipulated in Article 4 of Decree No. 206/2004/NĐ-CP and Point b, Clause 1, Section III of Circular No. 07/2005/TT-BLDTBXH and has planned profit higher than the previous year's actual profit by 5% or more, shall be entitled to apply an additional adjustment factor (K) for determining the company’s wage fund as follows:_đcshall not exceed twice the national minimum wage level.

b) Based on the additional adjustment coefficient compared to the national minimum wage level (K_đc) mentioned above, the company selects the minimum wage level to calculate the unit price of wages (the provision for selecting this minimum wage level replaces the provision for selecting the minimum wage level according to point b, clause 2, section III Circular No. 07/2005/TT-BLDTBXH) within the range of minimum wage levels prescribed as follows:

- The lowest selected minimum wage level equals the regional minimum wage level set by the Government (TL_minregion). In cases where the company has units or branches operating in regions with different regional minimum wage levels, the weighted average of the regional minimum wage levels and the number of workers of the company working in those regions shall be calculated.

- The highest selected minimum wage level: TL_max = TL_{Maximum Downhill Gradient} (1 + K_đc), wherein:

+ TL_{Maximum Downhill Gradient}: National minimum wage level.

+ K_đc: Additional adjustment coefficient compared to the national minimum wage level according to point a, clause 3, Article 3 of this Circular, with:

(TL_minregion/TL_{Maximum Downhill Gradient} � 1)< K_đc ≤ 1.34 or 2

Based on the range of minimum wage levels from TL_minregion to TL_max, the company may choose any minimum wage level within this range to calculate the unit price of wages while ensuring the provisions at point a, clause 3, Article 3 of this Circular.

The national minimum wage level at points a and b, clause 3, Article 3 of this Circular is stipulated in Article 1 of Decree No. 33/2009/NĐ-CP dated April 6, 2009 of the Government. When the Government adjusts the national minimum wage level, it shall be implemented according to the adjusted national minimum wage level.

4. The company referred to in clause 3, Article 1 of this Circular applies the lowest minimum wage level equal to the regional minimum wage level set by the Government to calculate the unit price of wages. If the conditions stipulated in clause 2, Article 4 of Decree No. 86/2007/NĐ-CP dated May 28, 2007 of the Government and clause 2.1, part A, section III Circular No. 15/2007/TT-BLDTBXH dated August 31, 2007 of the Ministry of Labor, War Invalids and Social Affairs are met, it may choose to apply a higher level than the regional minimum wage level set by the Government (with no maximum limit).

5. The regional minimum wage level set by the Government (TL_minregion) replaces the national minimum wage level (TL_{Maximum Downhill Gradient}shall be used to determine the company's wage fund as follows:

a) Determining the wage fund under the system (V_cđ), the wage fund is implemented according to the unit price of wages as prescribed in point a, clause 4, section III Circular No. 07/2005/TT-BLDTBXH dated January 5, 2005; point a, clause 2.4, part A, section III Circular No. 15/2007/TT-BLDTBXH dated August 31, 2007 of the Ministry of Labor, War Invalids and Social Affairs.

Example: According to the provisions in point a, clause 4, section III Circular No. 07/2005/TT-BLDTBXH: "The wage fund under the system (V_cđ), determined by multiplying the number of quota workers by the average job grade salary coefficient, the average salary allowance coefficient, and the national minimum wage level" is now adjusted as follows: "the wage fund under the system (V_cđ), determined by multiplying the number of quota workers by the average job grade salary coefficient, the average salary allowance coefficient, and the regional minimum wage level set by the Government."

b) Determining the planned wage fund and the wage fund of members of the Board of Directors, members of the Board of Members (or Chairman of the Company), General Director, Company Director without profit or loss according to the provisions in point b, clause 1, point b, d, đ, clause 2, section III Circular No. 08/2005/TT-BLDTBXH dated January 5, 2005 and point b, clause 2.1, point b, d, đ, clause 2.2, part B, section III Circular No. 15/2007/TT-BLDTBXH dated August 31, 2007 of the Ministry of Labor, War Invalids and Social Affairs.

6. Based on the regional minimum wage level prescribed in clause 1, Article 3 of this Circular, the company reviews, adjusts, and supplements the wage payment regulations, ensuring that the wages paid to workers are not lower than the regional minimum wage level set by the Government.

Article 4. Effectiveness

1. This Circular takes effect from January 1, 2010.

Repeal Circular No. 23/2008/TT-BLDTBXH dated October 20, 2008 guiding the implementation of the regional minimum wage level for state-owned companies and limited liability companies with 100% state-owned charter capital.

2. The funds for implementing the minimum wage levels prescribed in this Circular shall be guaranteed by the company and recorded in production costs or business expenses.

3. Ministries, ministerial-level agencies, agencies under the Government, People's Committees of provinces and centrally governed cities, Chairmen of the Board of Directors, Chairmen of the Board of Members or Chairmen of the Company of the parent company in State-owned Economic Groups and State-owned Corporations have the responsibility to direct, urge, and inspect companies 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, War Invalids and Social Affairs for timely guidance and supplementation./.