Thông tư 13/2003/TT-BLDTBXH

CIRCULAR

GUIDING THE IMPLEMENTATION OF A NUMBER OF ARTICLES OF DECREE NO.114/2002/ND-CP DATED DECEMBER 31, 2002 OF THE GOVERNMENT REGARDING WAGES OF LABORERS WORKING IN THE ENTERPRISES OPERATING UNDER THE LAW ON ENTERPRISES

Implementation of the Decree No.114/2002/ND-CP of December 31, 2002 of the Government detailing and guiding the implementation of some Articles of the Labor Code on wages, after consultation with the concerned Ministries and agencies, the Ministry of Labour - Invalids and Social Affairs guides the implementation of wages of employees working in enterprises operating under the Enterprise Law as follows:

I. SUBJECTS AND SCOPE OF APPLICATION.

Subjects and scope of application of wages under the provisions of this Circular are laborers working under regime of labor contracts in the following organizations:

1 / Enterprises established and operating under the Enterprise Law, including:

a) Limited liability companies;

b) Shareholding companies;

c) Partnership;

d) Private enterprise.

2 / Organizations and individuals that employ laborers, including: cooperatives, farm, artel, households, individuals, and other organizations.

The enterprises, companies, organizations, units and individuals mentioned above are referred to as enterprises.

II. MINIMUM WAGE LEVEL.

The minimum wage level in accordance with Article 4 of Decree No.114/2002/ND-CP is specified as follows:

1 / The minimum wage level applying from January 01, 2003 for laborers doing the simplest works (untrained) with normal working conditions in enterprises not less than the general minimum wage level is 290,000 VND/month according to provisions in the Decree No.03/2003/ND-CP dated January 15, 2003 of the Government.

When the state adjusts general minimum wage, comply with such new regulations.

2 / Based on labor productivity, efficiency of production and business, enterprises may set a minimum wage level higher than general minimum wage level stipulated by the Government as a basis for payment of wages to employees.

III. WAGE SCALE, PAYROLL, AND ALLOWANCES.

1 / Wage scale, payroll under clause 1, 3, Article 5 of Decree No.114/2002/ND-CP is specified as follows:

a) The enterprises are responsible for formulating wage scale, payroll, and technical rank standards of workers, titles, professional criteria of officials as a basis for signing labor contracts and collective labor agreements, identifying wage funds, paying wages, and settling other benefits for laborers.

The formulation of the wage scale and payroll must ensure the principles prescribed in clause 1, Article 5 of Decree No.114/2002/ND-CP enterprises select method in Appendix 1 attached to this Circular or apply other appropriate methods to formulate wage scales, payroll.

b) When formulating and promulgating the wage scale and payroll, the enterprises must consult the Executive Committee of the grassroots trade union or Executive Committee or the provisional trade union and publicize in the enterprises before applying.

c) The enterprise must register system of wage scale and payroll with the state management agencies of labor in the provinces and centrally-run cities where enterprises locate their head offices within one month from the date of publication of applying the wage scale, payroll. Dossiers consist of a written request, together with the system of wage scale and payroll formulated by enterprises.

2 / Wage allowance:

In addition to formulating wage scale, payroll as prescribed above, the enterprises may stipulate the wage allowances or apply the wage allowance regime stipulated by the Government for state-owned enterprises to pay for laborers.

IV. LABOR NORMS.

Labor norms under clause 2, 3, Article 5 of Decree No.114/2002/ND-CP are specified as follows:

1 / Enterprises are responsible for setting system of labor norms to determine the labor plan, organize, and use laborers and pay salary to laborers. The formulation of labor norms must ensure the principles provided for in clause 2, Article 5 of Decree No.114/2002/ND-CP

2 / The formulation of the labor norms are implemented as follows:

a) Enterprises establish Council of labor norms to organize the formulation or review, adjustment and supplementation of the system of labor norms applied in the enterprises. The compositions of the Council comprise of corporate director, some members who are qualified, technical and professional qualifications chosen by the director and representative of the grassroots trade union executive committee or provisional trade union executive committee.

b) Based on the actuality of organization of production, labor, enterprises choose the method of formulating labor norms in Appendix 2 attached to this Circular or apply the method of formulating the other suitable labor norms to formulate labor norms ensuring the above principles.

c) Annually, enterprises organize to valuate situation to implement the labor norms to modify and supplement to suit to the organization of production, labor. If the labor norms implemented less than 5% or more than 15% compared with the norms assigned, within three months, the enterprises must consider and adjust accordingly.

3 / As formulating, modifying, supplementing labor norms, the enterprises must consult the Executive Committee of the grassroots trade union or Executive Committee of provision trade union and publicize in the enterprise.

V. PAYMENT MODE.

1 / Form of payment:

Form of wage payment under Article 7 of Decree No.114/2002/ND-CP is specified as follows:

a) The time-based wage (monthly, weekly, daily or hourly), applied to those working as manager, specialist, technician and with professional skill; those who do the work under the line of technology, machinery and equipment and those who work that time-based wage payment is more effective than other forms of payment.

b) The piecework wage, applied to individuals or group of employees, based on the extent of completion of the quantity and quality of products assigned.

c) The package wage, applied to individuals or group of employees, based on the volume and quality of work and time to complete.

Based on the above method of payment, enterprises select form of payment consistent with the nature of work and conditions of production, business, and associating wage with the outcome of work, ensuring to encourage the employees to improve efficiency, productivity of labor. The choice or change of the payment form must be stated in labor contracts and collective labor agreements.

2 / Overtime Payment:

Payment of wage when employees work overtime in accordance with clause 1, 2 and 3, Article 10 of Decree No.114/2002/ND-CP is specified as follows:

a) For laborers who are paid based on time, if they work overtime, the enterprises must pay overtime by the method of calculation as follows:

In which:

- Hourly wage actually paid is determined on the basis of monthly salary actually paid that the employees work overtime (except for overtime wage, extra payment for night work, bonuses and other incomes without wage nature) divides by the number of hours actually worked in the month (excluding overtime) but not more than 208 hours for jobs with normal working conditions, working environment or the 156 hours for jobs with hazardous or dangerous, extremely hard working conditions. Where the daily wage payment, the hourly wage actually paid is determined on the basis of salary actually paid of such working day (except for overtime, extra payment for night work, bonuses and other incomes without wage nature) divides by the number of hours actually worked during the day (not including overtime) but not more than 8 hours for jobs with the normal labor conditions, working environment or 6 hours for jobs with hazardous or dangerous, extremely hard working conditions;

- The 150% rate, applied to overtime on weekdays;

- The 200% rate, applied to overtime on weekends stipulated in Article 72 of the Labor Code;

- The 300% rate, applied to overtime on holidays, on leave with wage payment (such 300% rate was included payment for time off to be fully paid under Articles 73, 74, 75 and 78 of the Labour Code);

- The overtime is stipulated in Decree No.109/2002/ND-CP of December 27, 2002 of the Government amending and supplementing some Articles of Decree No.195/CP dated December 31, 1994 of The Government detailing and guiding the implementation of some Articles of the Labor Code on working time, rest time.

In case of overtime work, if laborers are arranged to be off in compensation of the overtime, the enterprises shall pay only the difference of 50% of the hourly wage actually paid for the work being done, if working overtime on weekdays and 100%, if working overtime on weekends; 200%, if working overtime on holidays, on leave with wage payment.

Example 1. Wages and other incomes actually paid in the month of Mr. A (working in normal working conditions with the number of days actually worked by the number of working days of enterprise is 24 days/month) is 1,013. 600 VND (including bonus is VND 150,000, extra payment for working at night is 57,600 VND; mid-shift meal is 180,000 VND; the support for travelling is 50,000 VND):

- The monthly wage actually paid (including wage and its allowances) is:

VND 1,013,600 - (150,000 VND + 57,600 VND + 180,000 VND + 50,000 VND) = 576,000 VND.

- Hourly wage actually paid is:

576,000 VND: (24 days x 8 hours) = 3,000 VND.

- Overtime wage of an hour on weekdays is paid is:

VND 3,000 x 150% x 1 hour = VND 4,500.

If Mr. A is arranged to be off in compensation for the overtime, the enterprise pays only the difference compared to the wage of existing job on weekdays, one hour is:

4,500 VND - VND 3,000 = 1,500 VND

Example 2. Hourly wage actually paid of Mr. A as example 1, if he works overtime an hour on weekends, he will be paid 6,000 VND (VND 3,000 x 200% x 1 hour). If Mr. A is arranged to be off in compensation for the overtime, the enterprise pays only the difference compared to the wage of existing job on weekdays, one hour is 3,000 VND (6,000VND - 3,000 VND);

Example 3. Hourly wage actually paid of Mr. A as example 1, if he works overtime an hour on public holidays, on leave with wage payment, he shall be paid 9,000 VND (VND 3,000 x 300% x 1 hour). If Mr. A is arranged to be off in compensation for the overtime, the enterprise pays only the difference compared to the wage of existing job on weekdays, one hour is 6,000 VND (VND 9,000 - 3,000 VND).

b) For laborers who are paid by piecework, if out of standard time, enterprises require them to work further for the number, volumes of products, work out of the norms or the works arising undetermined in the annual plan of production, trading that the enterprises need their laborers to work extra hours, the wage unit price of the products, further-doing work is paid by 150% compared to the wage unit price of products made in the standard time, if they work further on weekdays; by 200%, if they work further on weekends; by 300%, if they work further on holidays, on leave with wage payment.

Example 4. Wage unit price of product B done in standard time is VND 1,000/product, If the enterprise requires to work further beyond norms and out of standard time, the wage unit price of products done extra is paid as follows:

- 1,500 VND/product, if the products are made on weekdays (VND 1,000 x 150%);

- 2,000 VND/product, if the products are made on weekends (VND 1,000 x 200%);

- 3,000 VND/product, if the products are made on holidays, on leave with wage payment (VND 1,000 x 300%)

3 / Wages paid for working at night:

Wages of laborers working at night under clause 4, Article 10 of Decree No.114/2002/ND-CP is specified as follows:

a) For laborers paid wages based on time, if they work at night, the enterprises must pay wages for working at night, by the method of calculation as follows:

In which:

- Time-based wage actually paid is calculated according to section a, point 2 above;

- The 130% rate includes time-based wage actually paid working during the day and 30% of time-based wage actually paid working at night;

- The Time to work at night as prescribed in Article 6 of Decree No.195/CP dated December 31, 1994 of the Government is determined from 22 pm of the previous day to 6 am of the next day for the provinces, cities from Thua Thien - Hue to the north; from 21 pm of the previous day to 5 am of the next day for the provinces, cities from from Da Nang southward;

Example 5. Wages actually paid of the work being done during daytime of an hour is 2,000 VND, if laborers work at night, the wages of an hour working at night to be paid is:

VND 2,000 x 130% x 1 hour = VND 2,600.

b) For laborers who are paid wage by piecework:

Example 6. Wage unit price made in standard time at daytime of the product C is 1,000 VND, the wage unit price paid for such product as made at night is VND 1,300 (VND 1,000 x 130%) and based on the number of products made at night to pay salaries based on actual performance.

c) Where the laborers work overtime at night, overtime wages are calculated as follows:

- For laborers paid based on time:

Example 7. The laborers who work at night 1 hour paid 2,600 VND (eg 5), if they work overtime at night on weekdays, an hour is paid as:

VND 2,600 x 150% x 1 hour = VND 3,900.

- For laborers paid wages by piecework:

Example 8. Wage unit price of product C made at night is paid VND 1,300 (eg 6), if the product C is made at night on weekdays, the wage unit price is paid as:

VND 1,300 x 150% = 1,950 VND.

d) Wages for overtime work, working at night specified in points 2 and 3 above shall be taken in the annual wage fund corresponding to the plans of production and business. In case of generating number and volume of new works not yet specified in the wage fund of the annual plan, the enterprises need their laborers to work overtime, working at night, then such wages for overtime works, working at night are supplemented into the wage fund of enterprises and accounted for in costs or fee of circulation.

Overtime rate of payment is equal to 150%, 200%, 300%, working at night by 130% prescribed at point 2, 3 mentioned above is the rate required the enterprises to pay to employers when they work overtime, work at night, besides employer and employees may agree a higher rate.

4 / Mode of wage rank increase:

The mode of wage rank increase pursuant to clause 2, Article 6 of Decree No.114/2002/ND-CP is specified as follows:

a) Each year, based on work requirements, the situation of production, trading, after consulting the Executive Committee of the grassroots trade union or Executive Committee of the provisional trade union, the enterprises make plan and organize to increase the wage rank for employees working in the enterprises.

b) The employees who have full the following conditions shall be considered to increase an annual wage:

- Having the time to work at enterprise for at least 1 year (full 12 months);

- Regularly completing the assigned works on quantity and quality under the labor contract signed;

- Not in the time of execution of labor discipline under the provisions of the Labor Code and labor internal rule of the enterprises.

c) The regime of wage rank increase for laborers must be stated in labor contracts and collective labor agreements. To encourage the employers to increase wage rank early for talented workers, contributed to efficiency of production and business of the enterprises.

5 / Regulation of wage payment:

Under clause 4, Article 5 of Decree No.114/2002/ND-CP enterprises are responsible for formulating and promulgating regulations to pay wage and encourage employees to improve productivity, quality, efficiency, talents to ensure harmony between the interests of enterprises and employees.

VI. ORGANIZATION OF IMPLEMENTATION.

1 / Enterprises are responsible for:

- Developing, promulgating, and registering the system of wage scales, payroll applied in the enterprise with the state management agencies of labor in the provinces and centrally-run cities where enterprises locate their head offices. Where the amendments and supplements of the system of wage scale and payroll are conducted, the enterprises shall register such amendments and supplements;

- Developing and issuing allowances, the system of labor norms and regulations on payment, bonuses, and standards of the technical level of workers, titles, qualifications, and professional skill employees to apply in the enterprises.

Cooperatives, farms, artels, households and individuals that employ laborers are not required to formulate wage scale, payroll and labor norms as prescribed in Item III and IV mentioned above which may be applied or self-regulate properly;

- Reviewing, amending and supplementing the labor internal rule, collective labor agreements, labor contracts in accordance with the contents specified above;

- Directly timely disseminating to employees the policies, regime of the State on labor, wages and income; the provisions of the enterprises on wage scale, payroll, allowance; standards of the technical level of workers; titles, qualifications and professional skill employees; labor norms; regulation on wage payment and bonuses.

2 / The People's Committees of provinces and cities under central authority direct the Departments of Labor - Invalids and Social Affairs to be responsible for:

- Guiding the enterprises under their management to implement policies and regimes of the state on laborers, wages and income;

- Receiving, recording in tracking book of registration of system of wage scale and payroll of enterprises locating in the area under their management. Where the wage scale and payroll of construction enterprises which are not in accordance with the provisions of Article 5 of Decree No.114/2002/ND-CP within 15 days from the date of receiving the registration, the Departments of Labour - Invalids and Social Affairs shall notify the enterprises to repair;

- Checking and inspecting the implementation of regimes and policies for employees in enterprises under their management.

VII. IMPLEMENTATION PROVISIONS.

This Circular takes effect after 15 days from the date of its publication on Official Gazette.

The provisions of this Circular shall not apply to employees working in the enterprises operating under the Enterprise Law of subjects, scope of application of Circular No.12/2003/TT-BLDTBXH dated May 30, 2003 of the Ministry of Labour - Invalids and Social Affairs guiding the implementation of some Articles of Decree No.114/2002/ND-CP of December 31, 2002 of the Government on wages for employees working in the state-owned enterprises.

To annul Circular No.10/LDTBXH-TT dated April 19, 1995 guiding the implementation of some Articles of Decree No.197/CP dated December 31, 1994 of the Government on wages and Circular No.05/LDTBXH- TT dated March 22, 1995 guiding the wage rank increase for workers and employees in the enterprises of the Ministry of Labour - Invalids and Social Affairs./.

ANNEX 1.

METHOD OF FORMULATING WAGE SCALE, PAYROLL
(Issuing together with Circular No.13 /2003/TT-BLDTBXH dated May 30, 2003 of Ministry of Labour, Invalids and Social Affairs)

Based on the principles of formulating wage scales, payroll and organizational conditions of production, business, labor organizations, and enterprises formulate wage scale, payroll for labor of management, labor of specialization, technical and professional labor and labor directly engaged in production and business in the following order:

1. Job analysis.

- Conducting full statistics of the works under each title being used in the enterprise;

- Collecting detail information on each specific job position to identify the main tasks, sub-tasks, the relationship of each job title and determine the professional requirements on education level, working experience, knowledge, skills, physical conditions, necessary working conditions of each job ....

2. Assessing the value of work.

On the basis of job analysis, assessment of work value to determine the positions of the same works for being grouped as a basis for determining wage scale and payroll for each group. Steps to assess the value of work as follows:

a) Making a list of the work elements by group of work factors mainly:

+ Knowledge and skills;

+ Mental power;

+ Physical strength and labor intensity;

+ Environment;

+ Responsibility.

In each group of work elements, enterprises identify specifically elements of composition from low to high levels. The job elements are the basis for comparison between the job positions in the enterprise.

b) Selecting the positions to assess: on the basis of a list of job elements, assess the work value for each separate position in the enterprise, and compare the professional requirements of each position.

c) Evaluating and scoring the levels of the elements to evaluate and score the component elements according to the levels, on that basis determining the score scale of elements to suit each job.

d) Balancing the score scale between the elements to assess the level of complexity or value of each element of the overall elements composing the work, thereby adjusting the reasonable score scale.

3. Ranking jobs.

After analyzing; assessing value of each job, grouping the works with function and requirement of knowledge, similar skills, each work group is defined as a rank of work, depending on the importance of work team. The order of the work rank is carried out by the following steps:

- A collection of separate works into the work groups;

- Establishment of the work rank levels and standard of ranking;

- Stipulation of a work rank for each work group.

4. Setting up wage scale, payroll for each job rank.

The wage scale and payroll as job rank determined in the following order:

a) Determination of affecting factors, includes: competitive ability of salaries compared to other enterprises; the provisions of law, especially compared to the minimum wage level stipulated by state; labor productivity; knowledge, skills, experience or seniority of the employees in the enterprises; forms of existing encouragement, bonuses ...

b) Formulation of the wage scale, payroll: Based on information collected and the affecting factors considered, the formulation of wage scale and payroll is conducted in order:

- Determination of number of wage ranks in the enterprise by getting information from the stage of job ranking.

- Determination of number of payroll scale in each rank based on the calculation of the points of advantage under the working result and considers the level of complexity required for the wage scale and payroll.

- Decision of wage level by rank and scale./.

ANNEX 2

METHOD OF FORMULATING LABOR NORMS
(Issuing together with Circular No.13 /2003/TT-BLDTBXH dated May 30, 2003 of Ministry of Labour, Invalids and Social Affairs)

Based on the principles for formulating labor norms and conditions for the organization of production, labor organizations, enterprises set up the specific labor norms by the following methods:

1. Method of analysis: The labor norms are set up by dividing the production process, the process of labor, and the job steps into component parts and study the factors that affect the time consuming to implement such component parts. On that basis, determine the structure and appropriate qualifications to perform the job steps, to perfect the organization of production, labor organization, the application of scientific achievements, new techniques, and the experiences of the advanced manufacturing people. Depending on production conditions, enterprises can build labor norms by method of survey analysis, calculating analysis or typical comparison, specifically:

- Method of survey analysis: The labor norms are set up based on the survey documents (take photos or hours) of working time, this method is usually applied in large mass production or work stages of the nature of the block goods. The steps to build the labor norms by this method are as follows:

+ Analyzing and studying the structure of job steps, determining the factors affecting the completion time of job step;

+ Based on the criteria or survey and research materials in the workplace to identify time of each department of job step and time in working shifts of workers (time for preparation, completion, operation, serve, relaxation, needs ...).

+ Using calculation method to determine the time norm, the norm of output.

- Method of calculation analysis: The labor norms are set up based on standard documents built availably (standard of time, quantity...), applying mathematical methods, using the formula to calculate the main time and other times in the norm. This method is usually applied to mass production conditions. The steps to set up labor norms under the method of calculation analysis as follows:

+ Analyzing the job step need to be determined norm into the component parts of labor and technology, eliminating the surplus parts and replacing obsolete parts with advanced parts to have the structure of reasonable job step.

+ Analyzing factors affecting the consumption of time to complete each part of the job step, on that basis determine the needed skilled level of workers, machinery and tools required, optimizing working mode and organizing the most reasonable workplace.

+ Based on technological processes and standards of all types of time for each part of each job step. Adding this consumption of time, shall have the time norm for the job step.

- Typical comparison method: The labor norms are set up based on typical consumption. Typical norm is built under method of survey analysis with scientific basis representing for work group with technological characteristics or the same structures content and performance order but different from size. This method applies to small, single conditions of production. The steps to set up labor norms by typical comparison method are as follows:

+ Analysis of work steps is required to perform the groups according to certain characteristics on structure and process of technologies relatively similar. In each group, select one or more of the typical job steps.

Identify the reasonable process of technology and the organizational-technical conditions to perform the typical job steps.

+ Set up the labor norm for the typical job steps by methods of survey analysis or methods of calculation analysis.

+ Determine the conversion factor Ki for the job steps in the group with the convention: the coefficient of the typical job steps by 1 (means K1 = 1), the coefficient of the remaining job steps in the group is determined based on the analysis of technology-specific, organizational conditions of each such job step, the factors affecting the time consumption of completion and compared to the typical job steps. If the organizational and technical conditions, the affecting factors of the job steps are more convenient than the typical job steps, then Ki <1; if it is similar to the typical job steps, Ki=1; if it is more difficult than the typical job steps, Ki > 1.

+ Based on the norm of typical job steps and the conversion factors Ki, determines the labor norm for each step of job in group by the following formula:

Mtgi = Mtg1 x Ki or Msli = Msl1 / Ki

In which:

Mtgi is the time norm for each job step i in group;

Mtg1 is the time norm for the typical job steps;

Ki is the conversion factor for the job steps in group;

Msli is the output coefficient for each job step i in group;

Msl1 is the output norm for the typical job steps.

2. Synthesis method: The labor norms are set up based on the statistics documents of actual consumption time to complete the job step, the experience accumulated by the person making the labor norms and consult experts to determine./.