Circular 04/2020/TT-BLDTBXH guidance on fund of wage under Decree 20/2020/ND-CP

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Circular No. 04/2020/TT-BLDTBXH dated May 25, 2020 of the Ministry of Labor, War Invalid and Social Affairs on providing guidance on the implementation of the regulations on contractual unit and the fund of wage for operation of employees and the Operation Board prescribed in Article 7 and Article 8 of the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on the pilot management of labor, wages and bonuses of a number of state economic groups and corporations
Issuing body: Ministry of Labor, Invalids and Social AffairsEffective date:
Known

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Official number:04/2020/TT-BLDTBXHSigner:Dao Ngoc Dung
Type:CircularExpiry date:Updating
Issuing date:25/05/2020Effect status:
Known

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Fields:Labor - Salary

SUMMARY

To add up to 02 average monthly wage to the paid wage fund in 2020

On May 25, 2020, the Ministry of Labor, War Invalid and Social Affairs issues the Circular No. 04/2020/TT-BLDTBXH on providing guidance on the implementation of the regulations on contractual unit and the fund of wage for operation of employees and the Operation Board prescribed in Article 7 and Article 8 of the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on the pilot management of labor, wages and bonuses of a number of state economic groups and corporations.

Accordingly, the company’s paid wage fund in 2020 shall be determined according to the wage fund calculated by the contractual unit price. In case a company’ earned profit is higher than the average profit in the 2018-2019 period, the company’s may additionally include the difference in the wage fund on the principle that for an increase of 1% in profit, the wage fund may be added by up to 2% provided that the addition must not exceed 20% of the excessive profit amount and 02 months’ paid wage amount of the actual average number of employees employed in a year.

In case a company’ earned profit is lower than the average profit in the 2018 - 2019 period, the company’s wage fund shall be decreased by either of the following two ways as selected by the company:  deduction in percentage (%) and such deduction is equal to a percentage deduction (%) between earned profits that is lower than the average earned profits of the period 2018 - 2019; or deduction in absolute value by the difference between the profits earned in 2020 that is lower than the average profits earned in the period 2018 - 2019. The deducted amount of the two above-mentioned methods must not exceed 02 months’ average paid wage amount of the actual average number of employees employed in 2020.

This Circular takes effect on July 10, 2020.

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Effect status: Known

THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS

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No. 04/2020/TT-BLDTBXH

THE SOCIALIST REPUBLIC OF VIETANAM

Independence - Freedom - Happiness

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Hanoi, May 25, 2020

 

                                                           

CIRCULAR

On providing guidance on the implementation of the regulations on contractual unit and the fund of wage for operation of employees and the Executive Board prescribed in Article 7 and Article 8 of the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on the pilot management of labor, wages and bonuses of a number of state economic groups and corporations

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Pursuant to the Government's Decree No. 14/2017/ND-CP dated February 17, 2017, on defining the functions, rights, responsibilities and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on pilot implementation of labor management, wage and bonus for a number of economic groups and state corporations;

At the proposal of the Director General of the Department of Industrial Relations and Wage;

The Minister of Labor, War Invalid and Social Affairs hereby promulgates the Circular on providing guidance on the implementation of the regulations on contractual unit and the fund of wage for operation of employees and the Executive Board prescribed in Article 7 and Article 8 of the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on the pilot management of labor, wages and bonuses of a number of state economic groups and corporations.

 

Article 1. Scope of regulation

This Circular provides guidance on the determination of the contractual wage unit prices under Article 7 and determination of the paid wage funds under Article 8 for employees and the Executive Board as prescribed in Clauses 1, 2 and 3, Article 1 of the Government’s Decree No. 20/2020/ND-CP dated February 17, 2020 on the pilot management of labor, wages and bonuses of a number of state economic groups and corporations (hereinafter referred to as to the Decree No. 20/2020/ND-CP).

Article 2. Subjects of application

Subjects of application of this Circular shall comply with Article 2 of the Decree No. 20/2020/ND-CP.

Article 3. Contractual wage unit prices

The contractual wage unit price (hereinafter referred to as the contractual unit price) for employees and the Executive Board in 2020 as prescribed in Article 7 of the Decree No. 20/2020/ND-CP shall be calculated according to the formula as follows:

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