Circular No. 38/2016/TT-BLDTBXH guiding the management of labor, wages, and remuneration for the Small and Medium Enterprise Development Fund.

CIRCULAR

Guidelines for managing labor, wages, and remuneration for the Small and Medium Enterprise Development Fund

Pursuant to Decree No. 106/2012/NĐ-CP dated December 20, 2012, of the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor, Invalids, and Social Affairs;

Pursuant to Decree No. 51/2016/NĐ-CP dated June 13, 2016 of the Government on the management of labor, wages, and bonuses for employees working in state-owned joint-stock companies with 100% state capital;

Pursuant to Decree No. 52/2016/NĐ-CP dated June 13, 2016 of the Government on the management of wages, remuneration, and bonuses for managers of state-owned joint-stock companies with 100% state capital;

At the proposal of the Director of the Department of Labor and Wages;

Implementing Document No. 1111/VPCP-KTTH dated February 22, 2016 of the Government Office on the implementation of activities of the Small and Medium Enterprise Development Fund, the Minister of Labor, Invalids and Social Affairs issues this Circular guiding the management of labor, wages, and remuneration for the Small and Medium Enterprise Development Fund.

Section 1

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the management of labor, wage fund, planned remuneration fund, actual wage and remuneration fund for employees, Chairman of the Management Board, members of the Management Board, Director, Deputy Director, Chief Accountant, Head of Supervisory Board, members of the Supervisory Board of the Small and Medium Enterprise Development Fund (hereinafter referred to as the Fund).

Article 2. Applicability

1. Workers working under labor contracts as prescribed by the Labor Code.

2. Head of the Supervisory Board, members of the Supervisory Board.

3. Director, Deputy Director, Chief Accountant, excluding Directors, Deputy Directors, and Chief Accountants employed under labor contracts (hereinafter collectively referred to as managers).

4. Chairman of the Management Board, members of the Management Board.

5. Other agencies, organizations, and individuals related to the implementation of the provisions of this Circular.

Section 2

MANAGEMENT OF LABOR AND WAGES FOR THE HEAD OF THE SUPERVISORY BOARD, MEMBERS OF THE SUPERVISORY BOARD, AND EMPLOYEES

Article 3. Labor Management

The Fund implements labor management in accordance with Article 3 of Decree No. 51/2016/NĐ-CP dated June 13, 2016 of the Government on the management of labor, wages, and bonuses for employees working in state-owned joint-stock companies with 100% state capital (hereinafter referred to as Decree No. 51/2016/NĐ-CP), Articles 3, 4, 5, 6, 7, and 8 of Circular No. 26/2016/TT-BLDTBXH dated September 1, 2016 of the Ministry of Labor, Invalids and Social Affairs guiding the management of labor, wages, and bonuses for employees working in state-owned joint-stock companies with 100% state capital (hereinafter referred to as Circular No. 26/2016/TT-BLDTBXH).

Article 4. Wage scale, pay grade, allowances, and wage adjustment

The Fund establishes and decides on the wage scale, pay grade, and implements wage adjustment for employees, Head of the Supervisory Board, and members of the Supervisory Board in accordance with Article 93 of the Labor Code, Decree No. 49/2013/NĐ-CP dated May 14, 2013 of the Government detailing certain provisions of the Labor Code on wages, and Circular No. 17/2015/TT-BLDTBXH dated April 22, 2015 of the Ministry of Labor, Invalids and Social Affairs guiding the establishment of wage scales, pay grades, allowances, and wage adjustments for employees in state-owned joint-stock companies in accordance with Decree No. 49/2013/NĐ-CP dated May 14, 2013 of the Government detailing certain provisions of the Labor Code on wages.

Article 5. Classification of salaries and wages for the Chairperson and members of the Supervisory Board

1. The Chairperson and members of the Supervisory Board shall be classified according to the salary scale and wage list established and decided by the Fund in accordance with Article 4 of this Circular.

2. The Chairperson and members of the Supervisory Board shall receive wages from the labor wage fund in accordance with Article 6 of this Circular.

Article 6. Planned wage fund, advance payment of wage fund, actual wage fund, distribution of wages

1. The planned average wage level, planned wage fund, advance payment of wages, unit price of wages, actual wage fund, and distribution of wages for workers shall be determined in accordance with Articles 5, 6, and 7 of Decree No. 51/2016/NĐ-CP, Articles 9, 10, 13, 14, and 15 of Circular No. 26/2016/TT-BLDTBXH.

2. When determining the planned average wage level and the actual average wage level to calculate the planned wage fund and the actual wage fund as prescribed in Articles 9 and 14 of Circular No. 26/2016/TT-BLDTBXH, the profit indicator (planned or realized within the year or realized in the immediately preceding year) shall be replaced by the total revenue minus total expenses for the year.

The total revenue and total expenses for the year shall be determined in accordance with the laws on financial management applicable to the Fund.

Article 7. Exclusion of external factors when determining the average wage level of workers

1. When determining the average wage level of workers as prescribed in Article 6 of this Circular, the Fund may exclude external factors affecting labor productivity and the total revenue minus total expenses for the year, including:

a) External factors as stipulated in Clause 1, Article 11 of Circular No. 26/2016/TT-BLDTBXH;

b) The State has made decisions to adjust policies that increase or decrease receivables and expenses incurred during the year by the Fund;

2. The exclusion of objective factors as prescribed in Clause 1 of this Article shall be carried out according to the following principles:

a) Labor productivity and the total revenue minus total expenses for the year affected by external factors must be quantified and calculated using specific data.

b) External factors reducing (or increasing) labor productivity and the total revenue minus total expenses for the year shall be added (or deducted) to the corresponding reduction (or increase) in labor productivity and the total revenue minus total expenses for the year, thereby adjusting the labor productivity and total revenue minus total expenses for the year indicators.

c) The Fund must reassess the implementation of external factors affecting labor productivity and the total revenue minus total expenses for the year compared to the plan to exclude them when determining the annual actual wage fund for workers.

Section 3

WAGE MANAGEMENT FOR MANAGERS, REMUNERATION FOR THE CHAIRPERSON AND MEMBERS OF THE MANAGEMENT BOARD

Article 8. Classification of wages for managers

Managers shall be classified, promoted, and reclassified in wages when the Fund's grade changes, in accordance with Article 3 of Government Decree No. 52/2016/NĐ-CP dated June 13, 2016, which stipulates wages, remuneration, and bonuses for managers of state-owned limited liability companies with 100% state capital, and Section 2 of Circular No. 27/2016/TT-BLDTBXH dated September 1, 2016, issued by the Ministry of Labor, Invalids, and Social Affairs, guiding the implementation of wage, remuneration, and bonus systems for managers of state-owned limited liability companies with 100% state capital (hereinafter referred to as Decree No. 52/2016/NĐ-CP and Circular No. 27/2016/TT-BLDTBXH).

Article 9. Determination of salary fund and payment of salaries for managers

1. The determination of planned salary fund; actual salary fund; and payment of salaries for managers shall be carried out in accordance with the provisions set forth in Clauses 1, 2, 3, 4, 5 of Article 3, Article 9, Clauses 1, 3, 4, 5, 6 of Article 10, Clauses 1, 2 of Article 11, Articles 14, 15, and 18 of Circular No. 27/2016/TT-BLDTBXH.

2. When determining the planned salary and remuneration fund, and the actual salary and remuneration fund as stipulated in Clause 1 of this Article, the profit indicator shall be replaced by the total revenue minus total expenses for the year according to the guidance provided in Clause 2 of Article 6 of this Circular, wherein:

In cases where the Fund meets all conditions: ensuring the preservation and development of state capital; paying taxes and setting up risk reserve funds as prescribed; average labor productivity does not decrease and the total revenue minus total expenses for the year exceeds that of the immediately preceding year, then the average planned salary for managers shall be determined as follows:

TL_bqkh= TL_cb + TL_cb x H_ln

Where:

- TLbqkh: The planned average wage level for managers.

- TLcb: The basic salary level for managers shall be determined according to Clause 1 of Article 10 of Circular No. 27/2016/TT-BLDTBXH.

- Hln: The additional salary coefficient compared to the basic salary level, linked to the total revenue minus total expenses for the year, is as follows: if the total revenue minus total expenses for the year is less than 50 billion VND, Hln shall be calculated at a maximum of 0.3; if the total revenue minus total expenses for the year is from 50 billion VND to less than 100 billion VND, Hln shall be calculated at a maximum of 0.5; if the total revenue minus total expenses for the year is from 100 billion VND to less than 150 billion VND, Hln shall be calculated at a maximum of 0.7; if the total revenue minus total expenses for the year is 150 billion VND or more, Hln shall be calculated at a maximum of 1.0.

3. When determining the planned salary fund and the actual salary fund as stipulated in Clauses 1 and 2 of this Article, the Fund shall exclude factors affecting labor productivity and the total revenue minus total expenses for the year as prescribed in Article 7 of this Circular.

Article 10. Remuneration for the Chairman of the Management Board and Management Board Members

1. The Chairman of the Management Board and Management Board members shall receive remuneration based on their work and working time; the planned remuneration and actual remuneration of the Chairman of the Management Board shall not exceed 20% of the planned salary and actual salary of the Director; the planned remuneration and actual remuneration of Management Board members shall not exceed 20% of the planned salary and actual salary of Deputy Directors.

2. The planned remuneration fund (actual remuneration fund) shall be determined based on the number of planned Management Board members (the actual number of Management Board members at various points during the year), working time, planned salary (actual salary) of Directors and Deputy Directors, and the remuneration ratio determined by the Fund according to the provisions of Clause 1 of this Article.

3. Based on the planned remuneration fund and the projected average actual salary of managers for the year (linked to the degree of achievement of annual plan indicators), the Fund shall make advance payments from the remuneration fund to the Chairman and Management Board members. The amount of advance remuneration payment shall be determined by the Fund but shall not exceed 80% of the planned remuneration fund for the year.

4. Based on the actual remuneration received and the advance remuneration paid to the Chairman and Management Board members, the Fund shall determine the remaining remuneration; in cases where the advance remuneration exceeds the actual remuneration received, the Chairman and Management Board members must repay the excess remuneration immediately within the year.

Section 4

IMPLEMENTATION

Article 11. Responsibilities of the Director

1. Organize the establishment of new or review existing job positions, duties; salary scales, pay tables, allowances according to job positions and duties, and implement salary adjustments in accordance with Article 4 of this Circular.

2. Annually, review or establish new labor norms, labor plans, assess the situation of labor utilization; develop and promulgate recruitment regulations, labor usage, and organize labor recruitment in accordance with the provisions.

3. In the first quarter of each year, determine the planned wage fund and the actual wage fund of the previous year for workers, the Head of the Supervisory Board, and members of the Supervisory Board, compile data in Form No. 2 issued together with Circular No. 26/2016/TT-BLDTBXH, report to the Management Council for approval.

4. Develop, promulgate, or amend and supplement the wage payment regulations for workers.

5. Advance payment of wages, decide on the establishment of unit price of wages, wage reserve deduction rate; implement wage payments to workers in accordance with the Fund's wage payment regulations.

6. Regularly report to the Management Council on labor conditions and wages in accordance with this Circular.

Article 12. Responsibilities of the Management Council

1. In the first quarter of each year, examine and approve production and business plans, labor norms, labor plans, planned wage funds, and actual wage funds of the previous year for workers, the Head of the Supervisory Board, and members of the Supervisory Board, in accordance with this Circular, and send to the Ministry of Planning and Investment within ten days from the date of approval using Form No. 2 issued together with Circular No. 26/2016/TT-BLDTBXH for inspection and supervision.

2. In the first quarter of each year, accept the planned wage fund and actual wage fund of the previous year for managers, the planned remuneration fund and actual remuneration fund of the previous year for the Chairman of the Management Council and members of the Management Council, report to the Ministry of Planning and Investment for approval along with data in Form No. 1 issued together with Circular No. 27/2016/TT-BLDTBXH.

3. Decide on wage adjustments and promotions for managers within its appointment authority; report to the Ministry of Planning and Investment to decide on wage adjustments and promotions for managers within the Ministry's appointment authority.

4. Direct the Director to improve organizational structure and personnel for labor and wage work to implement labor and wage management contents as stipulated in this Circular.

5. Develop and approve wage and remuneration regulations for managers, the Chairman of the Management Council, and members of the Management Council, and report to the Ministry of Planning and Investment before implementation; pay wages and remuneration to managers, the Chairman of the Management Council, and members of the Management Council in accordance with approved wage and remuneration regulations.

6. In the second quarter of each year, aggregate wages, remuneration, and average monthly income of the previous year for each manager, the Chairman of the Management Council, and members of the Management Council to report to the Ministry of Planning and Investment along with data in Form No. 2 issued together with Circular No. 27/2016/TT-BLDTBXH.

Article 13. Responsibilities of the Ministry of Planning and Investment

1. Accept and provide comments on the wage scale, pay table, allowances, and wage adjustment plans of the Fund.

2. Organize the implementation and guidance on labor and wage systems and policies for workers, manager wages, and remuneration for the Chairman of the Management Council and members of the Management Council as stipulated in this Circular.

3. In the first quarter of each year, accept, monitor, and inspect the Management Council's reports on labor norms, labor plans, planned wage funds, and actual wage funds of the previous year, and provide comments on objective factors affecting productivity, total revenue minus total expenses in the year (if applicable); accept and review, approve the actual wage and remuneration funds of the previous year and the planned wage and remuneration funds for managers, the Chairman of the Management Council, and members of the Management Council as stipulated in this Circular.

4. Decide on wage adjustments and promotions for managers within its appointment authority.

5. Accept, review, and provide comments on wage and remuneration regulations for workers, managers, the Chairman of the Management Council, and members of the Management Council.

6. Inspect and supervise the establishment of wage scales, pay tables, allowances, and wage adjustments; implement labor and wage policies as stipulated in this Circular.

Article 14. Responsibilities of the Ministry of Finance

Coordinate with the Ministry of Planning and Investment to inspect and supervise the implementation of labor usage plans, planned wage funds, actual wage funds, and the Fund's wage payment regulations as stipulated in this Circular.

Article 15. Responsibilities of the Ministry of Labor, Invalids and Social Affairs

Coordinate with the Ministry of Planning and Investment to inspect and supervise the implementation of labor usage plans, planned wage funds, actual wage funds, and the Fund's wage payment regulations; conduct inspections and audits on the implementation of the Fund's labor and wage policies.

Article 16. Effective Date

1. This Circular takes effect from January 1, 2017.

2. The Fund implements a midday meal allowance for workers, the Head of the Supervisory Board, members of the Supervisory Board, and managers not exceeding 730,000 VND/person/month. The implementation of the midday meal system follows the guidelines set out in Circular No. 22/2008/TT-BLDTBXH dated October 15, 2008, of the Ministry of Labor, Invalids, and Social Affairs guiding the implementation of the midday meal system in state-owned enterprises.

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