Circular No. 36/2010/TT-BLDTBXH guiding the implementation of the minimum wage for workers employed by companies, enterprises, cooperatives, cooperative unions, production groups, farms, households, individuals, and other organizations in Vietnam that hire labor.

CIRCULAR

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

cooperatives, cooperative unions, production groups, households, individuals, and other organizations in Vietnam that hire labor.

These guidelines apply to organizations that lease or hire labor.

_________________________

Pursuant to Decree No. 108/2010/NĐ-CP dated October 29, 2010 of the Government stipulating the minimum wage levels for workers employed by companies, enterprises, cooperatives, 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, Invalids and Social Affairs;

The Ministry of Labor, Invalids, and Social Affairs provides guidelines for implementing the minimum wage levels for workers employed by companies, enterprises, cooperatives, cooperative unions, production groups, farms, households, individuals, and other organizations in Vietnam that hire labor as follows:

Article 1. Scope of Regulation

1. A state-owned joint stock company with a single member is organized and operates under the Enterprise Law, including:

a) Joint stock companies with a single member belonging to Ministries, Provincial People's Committees, and Municipal People's Committees directly under the Central Government.

b) Joint stock companies with a single member that are parent companies of economic groups, parent companies of state corporations established, converted, and approved for organizational operation by the Prime Minister, Ministers, and Chairmen of Provincial People's Committees and Municipal People's Committees directly under the Central Government.

c) Joint stock companies with a single member belonging to economic groups, state corporations established, converted, and approved for organizational operation by the Prime Minister, Ministers, and Chairmen of Provincial People's Committees and Municipal People's Committees directly under the Central Government.

2. Enterprises established, organized, and operated under the Enterprise Law include: joint stock companies with a single member not owned by the state, joint stock companies with two or more members, public limited companies, partnerships, and private enterprises (excluding foreign-invested companies and enterprises).

3. Cooperatives, cooperative unions, production groups, farms, households, individuals, and other organizations in Vietnam that hire labor under employment contracts (excluding foreign agencies, organizations, and foreigners in Vietnam).

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

Article 2. Applicability

1. Workers employed under employment contracts as stipulated 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 employment contracts.

2. Members of the Board of Directors or the Chairman of the company, Supervisors, General Managers, Directors, Deputy General Managers, Deputy Directors, Chief Accountants (excluding General Managers, Directors, Deputy General Managers, Deputy Directors, and Chief Accountants working under contracts) working in enterprises specified in Clause 1, Article 1 of this Circular.

3. Management personnel receiving salaries in enterprises specified in Clauses 2 and 3, Article 1 of this Circular.

Article 3. Implementation of Minimum Wage Levels by Region

1. The minimum wage level is used to pay wages for the simplest work performed under normal working conditions in enterprises operating in the regions as prescribed in Article 2 of Decree No. 108/2010/NĐ-CP as follows:

a) VND 1,350,000 per month applicable to enterprises operating in Region I.

b) VND 1,200,000 per month applicable to enterprises operating in Region II.

c) VND 1,050,000 per month applicable to enterprises operating in Region III.

d) VND 830,000 per month applicable to enterprises operating in Region IV.

The application areas of the minimum wage levels by region are specified in Appendix No. 01 and Appendix No. 02 attached to this Circular.

2. Enterprises operating in which area shall apply the minimum wage level corresponding to that area. For enterprises with branches or subsidiaries operating in different areas with different minimum wage levels, the branch or subsidiary operating in which area shall apply the minimum wage level corresponding to that area.

3. The lowest salary paid to workers who have completed vocational training (including workers trained by the enterprise itself) must be at least 7% higher than the minimum wage level prescribed in Clause 1 of this Article.

Trained employees include:

- Those who have been issued vocational certificates, diplomas, or secondary vocational diplomas according to Decree No. 90/CP dated November 24, 1993 stipulating the structure of the national education system, the system of educational and training qualifications and 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 issued certificates from regular vocational programs, primary vocational certificates, secondary vocational diplomas, or have completed vocational training programs as stipulated 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.

4. Enterprises specified in Clause 1, Article 1 of this Circular may choose and apply a higher minimum wage level than the one prescribed by the Government to calculate unit labor costs and the wage fund for full-time members of the Board of Directors or the Chairman of the company, General Manager (Director), Deputy General Manager (Deputy Director), Chief Accountant, and full-time Supervisors, but must ensure compliance with the conditions stipulated in Point a, Clause 2, Article 4 of Decree No. 86/2007/NĐ-CP dated May 28, 2007 of the Government and Article 5, Section II of Circular No. 27/2010/TT-BLĐTBXH dated September 14, 2010 of the Ministry of Labor, Invalids, and Social Affairs guiding the management of labor, wages, remuneration, and bonuses in state-owned joint stock companies with a single member.

5. Enterprises specified in Clauses 2 and 3, Article 1 of this Circular shall apply the minimum wage level to determine and adjust other wage levels for workers as follows:

a) For enterprises that self-establish salary scales, wage tables, and allowances in accordance with 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, Circular No. 13/2003/TT-BLDTBXH dated May 30, 2003, and Circular No. 28/2007/TT-BLDTBXH dated December 5, 2007 of the Ministry of Labor, Invalids, and Social Affairs, the minimum regional wage stipulated in this Circular shall be used as the basis for calculating the levels within the salary scale, wage table, and allowances, the wage stated in the labor contract, and other systems according to the laws on labor. Joint-stock companies and limited liability companies with two or more members converted from state-owned enterprises continue to apply the salary scale prescribed by the State under Decree No. 205/2004/NĐ-CP and Decree No. 204/2004/NĐ-CP dated December 14, 2004 of the Government, and shall implement the provisions of Clause 6, Article 3 of Circular No. 06/2010/TT-BLDTBXH dated April 7, 2010 of the Ministry of Labor, Invalids, and Social Affairs.

b) For wage levels already agreed upon in labor contracts or in the salary scales established by enterprises, enterprises shall base their adjustments on the prevailing market wage rates and living costs to ensure that the agreed-upon wage levels are appropriate. The specific adjustment level shall be agreed upon between the employer and employee, ensuring the principles of establishing salary scales prescribed by the Government and reasonable wage relationships between newly hired employees and those with seniority at the enterprise.

c) When applying the provisions of this Circular, enterprises may not eliminate or reduce wage systems for overtime work, night shifts, wages or allowances for working in harsh conditions, toxic environments, or supplementary benefits in kind for hazardous occupations, as well as other systems prescribed by labor laws.

Allowances, subsidies, and bonuses stipulated by enterprises shall be implemented according to agreements in labor contracts or collective labor agreements or regulations of the enterprise as prescribed by labor laws.

d) Enterprises are encouraged to apply higher minimum regional wages than those stipulated in this Circular to determine wages and pay employees in accordance with productivity, business efficiency, and market wage rates.

Article 4. Effective date

1. The minimum regional wage stipulated in Clause 1, Article 3 of this Circular shall be applied as follows:

a) The areas specified in Appendix 01 issued together with this Circular shall be implemented from January 1, 2011.

b) The areas adjusted for the application of the minimum regional wage stipulated in Appendix 02 issued together with this Circular shall be implemented from July 1, 2011.

2. Repeal Circular No. 35/2009/TT-BLDTBXH dated November 13, 2009 guiding the implementation of the minimum regional wage for state-owned enterprises and limited liability companies with one member wholly owned by the State, and Circular No. 36/2009/TT-BLDTBXH dated November 13, 2009 guiding the implementation of the minimum regional wage for enterprises, cooperatives, cooperative unions, production cooperatives, family households, individuals, and other organizations in Vietnam that hire workers.

3. State-owned economic group parent companies during the period before establishing a salary system in accordance with Decree No. 101/2009/NĐ-CP dated November 5, 2009 of the Government on piloting the establishment, organization, operation, and management of state-owned economic groups, state-owned enterprises yet to be converted into limited liability companies with one member, and organizations currently applying the wage system of state-owned enterprises shall continue to apply the additional wage adjustment factor above the general minimum wage to determine the unit price of wages and the wage fund of the Board of Directors (or Board of Members), General Director (Director) as prescribed in Decrees No. 205/2004/NĐ-CP, No. 206/2004/NĐ-CP, No. 207/2004/NĐ-CP dated December 14, 2004, No. 141/2007/NĐ-CP dated September 5, 2007, and No. 28/2010/NĐ-CP dated March 25, 2010 of the Government, and Circulars No. 07/2005/TT-BLDTBXH, No. 08/2005/TT-BLDTBXH dated January 5, 2005, No. 19/2007/TT-BLDTBXH dated October 4, 2007, and No. 06/2010/TT-BLDTBXH dated April 7, 2010 of the Ministry of Labor, Invalids, and Social Affairs until the Government issues new regulations.

The minimum regional wage stipulated in this Circular shall be used to determine the wage fund system and the wage fund implementation according to the unit price of wages prescribed in Point a, Clause 4, Section III of Circular No. 07/2005/TT-BLDTBXH dated January 5, 2005, the planned wage fund and the wage fund system of members of the Board of Directors, General Director, Director of non-profit or loss-making companies as prescribed in Point b, Clause 1 and Point b, d, đ, Clause 2, Section III of Circular No. 08/2005/TT-BLDTBXH dated January 5, 2005 of the Ministry of Labor, Invalids, and Social Affairs.

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

5. Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, Chairmen of Provincial People's Committees, Chairmen of Municipal People's Committees directly under the Central Government, Chairmen of the Board of Members or Chairmen of parent companies of state-owned economic groups, and Chairmen of parent companies of state-owned total companies have the responsibility to direct, urge, and inspect companies to comply with the provisions of this Circular.

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