Consolidated Document number 4759/VBHN-BLDTBXH Decree detailing the implementation of certain provisions of the Labor Code regarding wages

DECREE

DETAIL REGULATIONS ON IMPLEMENTATION OF CERTAIN PROVISIONS OF THE LABOUR CODE REGARDING WAGES

Decree No. 49/2013/NĐ-CP dated May 14, 2013 of the Government detailing implementation of certain provisions of the Labour Code regarding wages, which took effect from July 1, 2013, was amended and supplemented by:

Decree No. 121/2018/NĐ-CP dated September 13, 2018 of the Government amending and supplementing certain articles of Decree No. 49/2013/NĐ-CP dated May 14, 2013 of the Government detailing implementation of certain provisions of the Labour Code regarding wages, which took effect from November 1, 2018.

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

Pursuant to the Labor Code dated June 18, 2012;

Decree No. 07/2021/NĐ-CP

The Government promulgates this Decree to detail implementation of certain provisions of the Labour Code regarding wages.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Decree stipulates the functions, tasks, and organizational structure of the National Wage Council as provided for in Clause 2, Article 92; principles for building wage scales and labor norms as provided for in Clause 1, Article 93 of the Labour Code.

Article 2. Applicability

1. Members of the National Wage Council as provided for in Clause 1, Article 92 of the Labour Code.

2. Workers employed under labor contracts as provided for in Clause 1, Article 3 of the Labour Code.

3. Employers as provided for in Clause 2, Article 3 of the Labour Code (hereinafter referred to collectively as enterprises).

4. Agencies, organizations, and individuals related to the regulations and implementation of the functions, tasks, and organizational structure of the National Wage Council and the construction of wage scales, labor norms as prescribed in this Decree.

Chapter II

NATIONAL WAGE COUNCIL

Article 3. Functions of the National Wage Council

1. The National Wage Council performs the function of advising the Government on adjusting and announcing the minimum regional wage levels.

2. The Prime Minister decides to establish the National Wage Council.

Article 4. Tasks of the National Wage Council

1. Analyze economic and social conditions, living standards of the population to determine and forecast the minimum living needs of workers and their families; assess the implementation of the minimum regional wage levels, market wage levels, and the ability of enterprises to pay to build and recommend to the Government annual and periodical minimum regional wage plans.

2. Study and recommend to the Government the hourly minimum wage applicable to certain irregular jobs or part-time work.

3. Organize reviews and evaluations of the division of regions applying minimum regional wage levels to recommend to the Government adjustments and supplements to the division of regions applying minimum regional wage levels.

4. Survey practices, study foreign experiences to enhance advisory capacity and effectiveness on minimum wages.

5. Study and advise on other issues related to wage policy at the request of the Government and the Prime Minister.

Article 5. Organizational Structure of the National Wage Council

1. The National Wage Council has 15 members, including: five members representing the Ministry of Labor, War Invalids and Social Affairs, five members representing the Vietnam General Confederation of Labor, and five members representing central-level employer organizations, among which:

a) The Chairman of the Council is a Deputy Minister of the Ministry of Labor, War Invalids and Social Affairs;

b) Three Vice Chairmen of the Council, including: one Vice Chairman representing the Vietnam General Confederation of Labor, one Vice Chairman representing the Vietnam Chamber of Commerce and Industry, and one Vice Chairman representing the Vietnam Federation of Trade Unions;

c) Council members, including: four members representing the Ministry of Labor, War Invalids and Social Affairs; four members representing the Vietnam General Confederation of Labor; one member representing the Vietnam Association of Small and Medium Enterprises; two members representing two central-level industry associations with significant labor usage.

2. The Prime Minister appoints the Chairman and Vice Chairmen of the National Wage Council upon the proposal of the Minister of Labor, War Invalids and Social Affairs and authorizes the Minister of Labor, War Invalids and Social Affairs to appoint Council members.

3. The Chairman, Vice Chairmen, and Council members of the National Wage Council must be professionals and have experience in the field of labor and wages; they must have the qualifications and capabilities to consider and propose recommendations required by the agencies they represent and have the opportunity to participate in the activities of the National Wage Council. The Chairman, Vice Chairmen, and Council members of the National Wage Council work on a part-time basis, with a term of five years.

4. The National Wage Council has technical units and standing units to assist the Council in researching, surveying, compiling, and building minimum regional wage plans, regional divisions for minimum wage application to be discussed at the Council and to carry out administrative work of the Council.

5. The operating funds of the National Wage Council are guaranteed by the state budget, allocated in the annual budget of the Ministry of Labor, War Invalids and Social Affairs, and other legitimate sources according to the law.

Article 6. Rules of Operation of the National Wage Council

1. The Chairman of the National Wage Council shall stipulate the rules of operation for the National Wage Council, technical units, and permanent units.

2. The Chairman of the National Wage Council may invite experts, scientists, researchers from ministries, sectors, research institutes, universities to consult opinions or participate in meetings of the Council.

Chapter III

PRINCIPLES FOR BUILDING WAGE SCALES AND LABOR STANDARDS

Article 7. Principles for Building Wage Scales

1. Based on production organization and labor organization, enterprises shall establish and decide upon wage scales for managerial workers, specialized technical and vocational workers, and direct production, business, and service workers.

2. The multiplier of the wage scale is the coefficient difference between the highest wage level for work or position requiring the highest technical qualifications and the lowest wage level for work or position requiring the lowest technical qualifications. The number of steps in the wage scale depends on the complexity of management, the level of work or position required. The difference between two consecutive wage levels must ensure encouragement for workers to improve their professional skills, accumulate experience, and develop talent, but not less than 5%.

3. The lowest wage level (starting point) for work or position within the wage scale shall be determined by the company based on the complexity of the work or position corresponding to the level of education, skills, responsibility, and experience required to perform the work or position, including:

a) The lowest wage level for the simplest work or position under normal working conditions shall not be lower than the minimum regional wage set by the Government;

b) The lowest wage level for work or position requiring trained or skilled labor (including labor trained by the enterprise itself) shall be at least 7% higher than the minimum regional wage set by the Government;

c) The wage level for work or position under arduous, toxic, or dangerous working conditions shall be at least 5% higher; for work or position under particularly arduous, toxic, or dangerous working conditions, it shall be at least 7% higher than the wage level for work or position with equivalent complexity performed under normal working conditions.

4. When establishing and applying wage scales, equality must be ensured without discrimination based on gender, ethnicity, skin color, social class, marital status, belief, religion, HIV status, disability, or reasons related to union membership and activities when it comes to workers, while also establishing standards for grading wages and conditions for advancing wage grades.

5. Wage scales must be periodically reviewed to amend and supplement them to be consistent with actual conditions regarding technological innovation, production organization, labor organization, wage levels in the labor market, and ensuring compliance with labor laws.

6. When establishing or amending wage scales, enterprises must seek the opinions of representative organizations of workers at the enterprise and publicly announce them at the workplace before implementation, while simultaneously submitting them to the local labor administration authority at the district level where the enterprise's production base is located. For state-owned single-member limited liability companies, when establishing or amending wage scales, they must report to the owner for comments before implementation; for parent companies of state economic groups and parent companies of special-class state-owned corporations, they must also submit to the Ministry of Labor, Invalids, and Social Affairs for monitoring and supervision.

Article 8. Principles for Establishing Labor Norms

Enterprises establish labor norms as the basis for paying wages to workers who are paid according to products, ensuring the following principles:

1. Labor norms shall be implemented for each step of work, each process, and the entire production process of products and services based on scientific labor organization and reasonable production organization.

2. The level of labor shall be established based on the rank of the job or position, consistent with the rank, educational qualifications of the worker, technological processes, technical standards of machinery and equipment, and ensuring labor standards.

3. The level of labor must be an advanced average level that ensures the majority of workers can achieve it without extending the standard working time of the enterprise as prescribed by law.

4. New levels of labor must be piloted before being officially issued. The enterprise must notify the workers at least 15 days before piloting. The trial period varies depending on the nature of the work but shall not exceed three months and must evaluate the implementation of the level.

In cases where, during the standard working hours, the actual level achieved based on output is lower than 5% or higher than 10% compared to the assigned level, or the actual level achieved based on time is higher than 5% or lower than 10% compared to the assigned level, the enterprise must adjust the labor level.

5. Labor levels must be periodically reviewed and evaluated for revision, supplementation, and adjustment to ensure appropriateness. When establishing or revising, supplementing, or adjusting labor levels, the enterprise must consult the opinions of the representative organizations of the workforce at the enterprise and publicly announce them at the workplace of the workers before implementation, while simultaneously sending them to the competent state management agency regarding labor at the district where the enterprise's production base is located.

Chapter IV

IMPLEMENTING PROVISIONS

Article 9. Effective Date

1. This Decree takes effect from July 1, 2013. The provisions of this Decree shall be applied from May 1, 2013.

2. Decree No. 114/2002/NĐ-CP dated December 31, 2002 of the Government detailing and guiding the implementation of certain articles of the Labor Code concerning wages; Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government stipulating the wage scale system and allowance system in state-owned companies cease to be effective from the date this Decree takes effect.

Article 10. Responsibility for Implementation

1. Responsibilities for organizing the implementation of regulations on the functions, tasks, and organizational structure of the National Wage Council:

a) Heads of agencies and organizations specified in Clause 1, Article 5 of this Decree appoint representatives to participate in the National Wage Council and submit lists for the Ministry of Labor, Invalids and Social Affairs to compile;

b) The Chairman of the Vietnam Chamber of Commerce and Industry selects and proposes the heads of two central industry associations employing many workers to appoint representatives to participate in the National Wage Council;

c) The Minister of Labor, Invalids and Social Affairs compiles and proposes the Prime Minister to appoint the Chairperson and Deputy Chairpersons of the National Wage Council; decides on the appointment of members of the National Wage Council.

2. Responsibilities for organizing the implementation of the establishment of wage scales and labor norms.

a) Enterprises organize the establishment or review, revision, supplementation of wage scales, labor norms, and send them to the competent state management agency regarding labor at the district where the enterprise's production and business base is located for monitoring and inspection in accordance with this Decree. In cases where enterprises have multiple units or branches operating in different areas, after establishing and deciding on wage scales and labor norms, enterprises send them to the competent state management agency regarding labor at the district where the unit or branch is located for monitoring and inspection. For enterprises employing fewer than ten workers, they are exempted from the procedure of submitting wage scales and labor norms to the competent state management agency regarding labor at the district where the enterprise's production and business base is located;

b) The competent state management agency regarding labor at the district where the enterprise's production and business base is located receives the wage scales, labor norms of enterprises in accordance with Clause 2, Article 93 of the Labor Code; Clause 6, Article 7 and Clause 5, Article 8 of this Decree to review and inspect. In cases where non-compliant contents are found, they must issue a written request for enterprises to amend, adjust, and supplement in accordance with the provisions of labor laws;

c) Provincial People's Committees, municipal people's committees directly under the Central Government direct the Department of Labor, Invalids and Social Affairs to cooperate with the Trade Union and relevant agencies to organize propaganda, guidance, inspection, and supervision of the establishment of wage scales, labor norms for enterprises within their jurisdiction in accordance with this Decree;

d) Agencies and organizations entrusted with the rights and obligations of the owner of a single-member limited liability company owned by the State accept, inspect, and supervise the establishment of wage scales for such companies;

đ) The Ministry of Labor, Invalids and Social Affairs guides single-member limited liability companies owned by the State, organizations, units of the State, joint-stock companies, and limited liability companies with two or more shareholders converted from state-owned companies and single-member limited liability companies owned by the State currently classified according to the wage scale and table issued together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 of the Government to implement the establishment of wage scales, allowances according to this Decree, ensuring reasonable wage relations among types of workers in the company and industries; transfer the classification of workers' wages from the wage scale and table issued by the Government together with Decree No. 205/2004/NĐ-CP dated December 14, 2004 to the wage scale issued by the company.

3. The Minister, the Heads of Ministries-equivalent agencies, the Heads of government agencies, the Chairpersons of People's Committees of provinces and centrally governed cities, and related agencies, organizations, enterprises, and individuals shall be responsible for implementing this Decree./.