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THE
MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No:
10-LDTBXH/TT
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Hanoi,
April 19, 1995
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CIRCULAR
GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF DECREE
No.197-CP OF THE GOVERNMENT ON WAGES
In execution of Decree No.197-CP
on the 31st of December 1994 of the Government providing details and guidance
for the implementation of a number of articles of the Labor Code on wages, after
consulting with a number of concerned ministries and branches, the Ministry of
Labor, War Invalids and Social Affairs provides the following guidance for the
application of a number of articles on wages :
I. OBJECTS
AND SCOPE OF REGULATION:
1. The objects and scope of the
regulation on wages are the objects and scope defined in Items 1, 2, 3, 4 of
Article 1 of Decree No.197-CP.
2. The objects and scope of non
regulation are the subjects and scope defined in Items 5 and 6 of Article 1,
and Article 2 of Decree No.197-CP.
II. SYSTEM OF
WAGE SCALES AND WAGE BRACKETS:
1. The system of wage scales,
wage brackets and wage subsidies stipulated in Item 1, Article 4 of Decree
No.197-CP, concerning the enterprises, business and service organizations,
public service and economic units operating according to the system of
accountancy and accounting in the State economic sector, shall apply the
provisions in Decree No.26-CP on the 23rd of May 1993 of the Government
providing for a provisional system of new wages in the enterprises, and the
following guiding circulars:
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- The inter-ministerial Circular
No.12-LB/TT on the 2nd of June 1993 of the Ministry of Labor, War Invalids and
Social Affairs, and the Ministry of Finance, guiding the conversion of the old
wages to the new wages among the workers and personnel in the enterprises;
- The Inter-ministerial Circular
No.20-LB/TT on the 2nd of June 1993 of the Ministry of Labor, War Invalids and
Social Affairs, and the Ministry of Finance guiding the management of wages and
bonuses in the enterprises;
- The inter-ministerial Circular
No.21-LB/TT on the 17th of June 1993 of the Ministry of Labor, War Invalids and
Social Affairs, and the Ministry of Finance, guiding the classification of
enterprises, and the criteria for classification of the enterprises of the
ministries and branches issued in line with Circular No.21-LB/TT;
- The inter-ministerial Circular
No.28-LB/TT on the 2nd of December 1993 of the Ministry of Labor, War Invalids
and Social Affairs, and the Ministry of Finance, providing supplementary
guidance for the implementation of the new wage system concerning the workers
and personnel in the enterprises;
- Circular No.15-LDTBXH/TT on
the 2nd of June 1993 of the Ministry of Labor, War Invalids and Social Affairs,
guiding the implementation of the regime of area allowances;
- Circular No.16-LDTBXH/TT on
the 2nd of June 1993 of the Ministry of Labor, War Invalids and Social Affairs,
guiding the implementation of the regime of incentive allowances.
- Circular No.17-LDTBXH on the
2nd of July 1993 of the Ministry of Labor, War Invalids and Social Affairs
guiding the implementation of the responsibility allowances;
- Circular No.19-LDTBXH/TT on
the 2nd of July 1993 of the Ministry of Labor, War Invalids and Social Affairs,
guiding the implementation of the regime of the traveling allowances;
- Circular No.23-LDTBXH/TT on
the 7th of July 1993 of the Ministry of Labor, War Invalids and Social Affairs,
guiding the implementation of the regime of noxiousness and danger allowances;
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- Circular No.29-LDTBXH/TT on
the 9th of December 1993 of the Ministry of Labor, War Invalids and Social
Affairs, providing supplements to the regime of area allowances.
2. The wage regime in the
enterprises, production, business and service organizations belonging to other
economic sectors employing 10 and more laborers as stipulated in Item 2,
Article 4 of Decree No.197-CP, shall be implemented as follows:
a/ With regard to the
enterprises, which have a stable production and business and a level of
production equipment and management equivalent to the State enterprises and
which are making profits in production and business, shall apply the system of
wage scales, wage brackets and wage subsidies of the State for the
corresponding branches and occupations.
The State encourages all
enterprises to work out and apply a system of wage scales, wage brackets and
wage subsidies higher and more beneficial to the laborers.
b/ With regard to the
enterprises which are meeting with difficulties in production and business, or
which still have a low level of equipment and management, or which are still
using a large labor force with low professional and technical skills, they are
allowed to work out for themselves their wage scales and wage brackets.
However, the lowest wage should not be lower than the minimum wage prescribed
by the State. The elaboration of the wage scales and wage brackets must be done
in consultation with the local organization of the trade union and recorded in
the collective labor accord.
c/ With regard to the laborers
who work under seasonal contracts or for specific jobs which require less than
three months, or who work in places employing less than 10 laborers, or with
regard to houseworkers, the employer shall have to pay, in addition to the wage
mutually agreed upon on the principle stipulated in Points a and b, an extra
sum equal to at least 17% of the agreed wage, so that the laborer may look
after his/her own insurance.
III. REGIME
OF PAYMENT OF WAGES AND BONUSES
1. Basing himself on the form of
wage payment stipulated in Article 5 of Decree No.197-CP, the employer may
choose the form of wage payment, or change the form of payment, to make it
conform to the conditions and character of the work and the production
organization of the enterprise. But this choice or this change must be written
down in the collective labor accord or the labor contract.
2. Payment for overtime work
under Items 1 and 2 of Article 8 of Decree 197-CP shall be carried out as
follows :
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b/ Method of calculation of
overtime work pay :
- Pay for time-work :
+ 150% of hourly pay of a normal
work day, applied to overtime work on normal days.
+ 200% of hourly pay of a normal
day applied to the overtime work on weekly rest days or holidays.
In case the laborer is allowed
to take his/her time off to compensate for the overtime hours, the employer
shall have to pay only the difference representing 50% of the hourly pay of a
normal workday if the overtime work takes place in normal days, and 100% if it
takes place on the weekly rest days or holidays.
Example 1: The laborer working
in standard hours is paid 3,000 VND/hour (including wage and wage subsidies).
If he/she works overtime on normal days, he/she is paid 4,500 VND/hour (3,000
VND x 150%). But if he/she has taken his/her time off for compensation, he/she
shall be paid only 1,500 VND/hour (4,500 VND/hour - 3,000 VND/hour).
If he/she works overtime on the
weekly rest days or holidays, he/she is paid 6,000 VND/hour (3,000 VND x 200%).
If he/she takes his time off in compensation, he/she shall be paid only 3,000
VND/hour (6,000 VND/hour - 3,000 VND/hour).
- With regard to the laborer
working on a quota basis, after fulfilling his/her norm concerning the volume
and quantity of products based on standard hour (the standard hour is defined
in Article 3 of Decree No.195-CP), if the employer requires overtime work, the
unit price of the product produced outside the standard time shall be increased
by 50% if the products are made on normal days, and 100% if the products are
made on the weekly rest days or the holidays.
Example 2: The wage unit price
of Product A is 1,000 VND/product. In case of overtime work:
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- The wage unit price shall be
2,000 VND/product, if the product is made on the weekly rest days or holidays.
3. The laborer on night shifts
under Item 3, Article 8 of Decree No.197-CP shall be paid as follows:
a/ Level of pay:
- The lowest level is 35% of the
daytime wage, if the laborer works on night shifts for eight days and more
consecutively in a month, irrespective of the form of wage payment.
- The lowest level is 30% of the
daytime pay, applied to all other night work, irrespective of the form of wage
payment.
b/ Method of calculating extra
pay for night work:
- With regard to the laborers
who are paid for time-work:
Example 3 : During
day-time work, the laborer is paid 2,000 VND/hour (including wage and wage
subsidies). If the enterprise organizes night work for less than eight
consecutive days in a month, the hourly pay during the night shift is:
2,000 VND/hour + (2,000 VND/hour
x 30%) = 2,600 VND/hour
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Example 4 : Wage unit price on
normal days (daytime) of product B is 1,000 VND per unit.
The extra pay per unit for night
shifts is:
1,000 VND/unit x 30% = 300
VND/product.
The wage unit price of product B
during the night shifts is:
1,000 VND + 300 VND = 1,300
VND/product.
For overtime work during night
shifts, the hourly pay is the hourly pay for overtime work in daytime plus
extra pay for nightshift work.
Example 5 : The laborer doing
overtime work in daytime is paid 4,500 VND/hour (3,000 VND/hour x 150%). If
he/she works on night shifts (for the enterprises which organize night shifts
for less than eight consecutive days in a month), he/she shall be paid :
4,500 VND/hour + (3,000 VND/hour
x 30%) = 5,400 VND/hour
Example 6 : The wage unit of
overtime work in daytime of product D is 1,500 VND/product. If the overtime
work is done in night shifts, the wage unit shall be:
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4. The deduction of bonuses from
the remaining profits under Article 9 of Decree No.197-CP, shall be effected as
follows:
a/ With regard to the
enterprises, business and service organizations in the State economic sector:
- Persons eligible for bonuses:
+ Laborers who have worked at
the enterprise for one year and longer.
+ Having contributed to the
results of production and business of the enterprise.
- Bonus level:
+ For the laborers who have
signed labor contracts, the bonus shall not exceed six months' wage agreed in
the labor contract.
+ For the workers and employees
in the permanent force of the enterprise, who have changed to the labor
contract without specification of the term of the contract as stipulated in
Decree No.198-CP on the 31st of December 1994 of the Government, the maximum
bonus shall not exceed six months' wage according to grade and position or the
position allowance, which they are receiving in the system of wage scales and
brackets defined by the State in Decree No.26-CP on the 23rd of May 1993 of the
Government.
- Bonus regime : The enterprise
must work out its bonus regime on the following bases :
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+ The time during which the
laborers work at the enterprise, those who work longer shall receive larger
bonuses.
+ The observance of the
regulations and discipline of the enterprise by the laborers.
This bonus regime must be done
in consultation with the Executive Committee of the local trade union organization,
or the representative of the laborers' collective where no trade union has been
founded.
b/ With regard to the private
enterprises:
The lowest bonus must represent
10% of the remaining profit of the enterprise. The method of determining the
remaining profit of the private enterprise shall be defined by the Ministry of
Finance.
The enterprise must elaborate
its bonus regime just as in a State-owned enterprise according to Point a in
order to pay bonus to its laborers. This regime must be worked out in
consultation with the local trade union, or the representative of the laborers'
collective where no trade union has been founded.
5. Wage payment during work
stoppage under Item 3 of Article 12 of Decree No.197-CP shall be effected as
follows:
During a workshift, if the work
is stopped for two hours and more, the wage shall be paid for every hour of the
stoppage. If the stoppage lasts until the end of the shift, the laborer shall
be paid for the whole shift. If the stoppage lasts until the end of a week or a
month, he/she will receive his/her weekly or monthly pay for the whole of that
week or that month. The wage level paid for work stoppages shall comply with
Article 14 of Decree No.197-CP.
IV. OTHER
STIPULATIONS
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- If he/she is a wage earner by
time (day, week or month), he/she shall be paid fully (100%) his/her daily,
weekly and monthly wage.
- If he/she receives product pay
or package pay, he/she can accept only 50% of the volume of products under
contract. If he/she fulfils 50% of the assigned norm, he/she shall receive the
same salary as a person (who is not an elderly laborer) who has fulfilled 100%
of the norm.
2. The laborers, having a high
professional and technical level under Article 20 of Decree No.197-CP, shall
receive their wages according to the wage bracket B19- specialist and artisan.
The high-level specialists, the high-level economists and high-level engineers
shall receive their wages, according to the wage bracket of the specialized,
professional and executive labor serving in the enterprises issued together
with Decree No.26-CP on the 23rd of May 1993 of the Government.
On the basis of the above wage
brackets, the enterprise shall base itself on the effeciciency to determine the
income corresponding to the result of the labor of each person.
3. The laborer, who is a
Vietnamese citizen working abroad defined in Article 21 of Decree No.197-CP,
shall be paid part of his wage in foreign currency or the equivalent in
Vietnamese Dong, according to the following regulations:
a/ The pay in foreign currency
comprises expenditures on food, clothing and pocket money for the person concerned,
in order to ensure the normal living and working conditions for the laborer
during his/her working stay abroad.
b/ Principle for calculating the
part of the wage in foreign currencies:
- Based on the local cost of
living (food, clothing and pocket money for the person working abroad).
- The length of his/her working
period abroad.
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c/ The part of the wage to be
paid in foreign currency shall also depend on the concrete wage level of each category
of labor, but in any case it must not exceed 60% of the wage level written in
the labor contract.
V.
IMPLEMENTATION PROVISION
This Circular takes effect on
the 1st of January 1995. All the earlier provisions which are contrary to this
Circular are now annulled.
In the process of
implementation, if any question arises, the ministries, branches and localities
are requested to inform the Ministry of Labor, War Invalids and Social Affairs
for settlement.
THE
MINISTER OF LABOR,
WAR INVALIDS AND SOCIAL AFFAIRS
Tran Dinh Hoan