Circular No. 29/2012/TT-BLDTBXH dated December 10, 2012 of the Ministry of Labor, War Invalids and Social Affairs guiding region-based minimum wage levels for laborers working for enterprises, cooperatives, cooperative groups, farms, households, individuals and labor-employing agencies and organizations

THE MINISTRY OF LABOR, WAR INVALIDS AND SOCIAL AFFAIRS

Circular No. 29/2012/TT-BLDTBXH of December 10, 2012, guiding region-based minimum wage levels for laborers working for enterprises, cooperatives, cooperative groups, farms, households, individuals and labor-employing agencies and organizations

Pursuant to the Government’s Decree No. 103/2012/ND-CP of December 4, 2012, prescribing region-based minimum wage levels for laborers working for enterprises, cooperatives, cooperative groups, farms, households, individuals and labor-employing agencies and organizations;

Pursuant to the Government’s Decree No. 186/2007/ND-CP of December 25, 2007, defining the functions, tasks, powers and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

At the proposal of the director of the Labor and Wage Department;

The Minister of Labor, War Invalids and Social Affairs promulgates the Circular guiding the Government’s Decree No. 103/2012/ND-CP of December 4, 2012, prescribing region-based minimum wage levels for laborers working for enterprises, cooperatives, cooperative groups, farms, households, individuals and labor-employing agencies and organizations.

Article 1. Scope of regulation

1. Enterprises established, organized, managed and operating under the Enterprise Law (including foreign-invested enterprises in Vietnam not re-registered under Point b, Clause 2, Article 170 of the Enterprise Law).

2. Cooperatives, cooperative unions, cooperative groups, farms, households, individuals and other Vietnamese organizations that employ laborers.

3. Foreign agencies and organizations, international organizations and foreigners in Vietnam that employ laborers (unless otherwise provided by treaties to which the Socialist Republic of Vietnam is a contracting party).

Enterprises, agencies, organizations and individuals defined in Clauses 1, 2 and 3 of this Article are below collectively referred to as enterprises.

Article 2. Subjects of application

1. Laborers working under labor contracts in accordance with the Labor Code.

2. Enterprise-paid managerial employees, including members of Boards of Directors, members of Members’ Councils or presidents of companies, directors general, directors, deputy directors general, deputy directors, chief accountants, controllers and other managerial officers.

Article 3. Region-based minimum wage levels

1. The region-based minimum wage levels applicable to laborers working in enterprises (below referred to as region-based minimum wage levels) are prescribed as follows:

a/ VND 2,350,000/month, for enterprises operating in region-I geographical areas.

b/ VND 2,100,000/month, for enterprises operating in region-II geographical areas.

c/ VND 1,800,000/month, for enterprises operating in region-III geographical areas.

d/ VND 1,650,000/month, for enterprises operating in region-IV geographical areas.

2. Geographical areas in which region-based minimum wage levels will be applied are specified in the Appendix to the Government’s Decree No. 103/2012/ND-CP of December 4, 2012.

3. The application of region-based minimum wage levels in different geographical areas in some specific cases is prescribed as follows:

a/ For renamed or separated/split-up geographical areas, the region-based minimum wage level that is applicable before the renaming or separation/split-up will be temporarily applied; for geographical areas newly established from geographical areas in which different region-based minimum wage levels are applied, the highest region-based minimum wage level will be applied; for provincial cities established from one or more than one region-IV geographical area, the region-based minimum wage level applicable to region-III geographical areas will be applied.

b/ For enterprises operating in two or more adjacent geographical areas in which different region-based minimum wage levels are applied, the highest region-based minimum wage level will be applied; for enterprises’ units or branches operating in different geographical areas in which different region-based minimum wage levels are applied, the region-based minimum wage level applicable in the geographical area in which they operate will be applied.

c/ For enterprises operating in industrial parks or export-processing zones located in different geographical areas in which different region-based minimum wage levels are applied, the highest region-based minimum wage level will be applied; for enterprises operating in industrial parks’ or export-processing zones’ sub-zones located in different geographical areas in which different region-based minimum wage levels are applied, the region-based minimum wage level applicable in the geographical area in which they operate will be applied.

Article 4. Application of region-based minimum wage levels

1. The Government-prescribed region-based minimum wage levels are the lowest wage levels serving as a basis for enterprises and laborers to reach agreement on wages to be paid to laborers, provided that monthly wages to be paid to untrained laborers doing the simplest jobs under normal working conditions with sufficient number of standard working days a month and accomplishing the agreed labor norms or jobs must not be lower than the Government-prescribed region-based minimum wage levels.

2. The lowest wage levels to be paid to trained laborers (including laborers trained by enterprises themselves) must be at least 7% higher than the Government-prescribed region-based minimum wage levels.

Trained laborers include:

- Persons who possess vocational certificates, vocational diplomas or vocational secondary diplomas prescribed in the Government’s Decree No. 90/CP of November 24, 1993, providing the framework structure of the national education system, and diplomas and certificates on education and training;

- Persons who possess vocational certificates or vocational diplomas granted under the 1998 or 2005 Education Law;

- Persons who possess certificates of completion of a regular vocational training program, vocational elementary certificates, vocational secondary diplomas or vocational collegial diplomas, or have completed vocational training programs under vocational training contracts provided in the Vocational Training Law;

- Persons who possess vocational diplomas or certificates granted by foreign training institutions;

- Persons who have been trained by enterprises or have learned job skills by themselves and have been tested and are assigned by enterprises the jobs requiring trained skills.

3. The Government-prescribed region-based minimum wage levels shall be used as a basis for determining and adjusting wage levels of laborers working in enterprises that formulate and issue wage scales and tables in accordance with the labor law as follows:

a/ Enterprises which have formulated their wage scales and tables shall base themselves on the Government-prescribed region-based minimum wage levels to consider and adjust wage levels in their wage scales and tables while still complying with the labor law-prescribed principles of formulating wage scales and tables; and determine and adjust wage levels and allowances under labor contracts and other regimes for laborers as appropriate.

b/ Enterprises which have not formulated their wage scales and tables shall base themselves on the Government-prescribed region-based minimum wage levels to determine wage levels when formulating their wage scales and tables while still complying with the labor law-prescribed principles of formulating wage scales and tables; and determine and adjust wage levels and allowances under labor contracts and other regimes for their laborers as appropriate.

c/ Enterprises, grassroots trade union executive committees and laborers shall reach agreement on the adjustment of wage levels in the wage scales and tables or the determination of wage levels when formulating the wage scales and tables, wage levels and allowances under labor contracts, and other regimes for laborers under Points a and b, Clause 3 of this Article, ensuring a rational balance of wages between untrained and trained laborers and laborers with highly professional and technical qualifications, and between newly recruited laborers and senior laborers in enterprises.

4. When applying the provisions of this Circular, enterprises may not cut or reduce wages for laborers doing overtime or night work, wages or allowances for persons doing hard and hazardous jobs, in-kind allowances for persons doing hard and hazardous jobs, and other regimes prescribed by the labor law.

Enterprise-prescribed allowances, subsidies and bonuses comply with the agreements in labor contracts or collective labor agreements or enterprises’ regulations.

5. Enterprises are encouraged to apply minimum wage levels higher than the Government-prescribed region-based minimum wage levels as a basis for implementing the regimes provided in Clause 3, Article 4 of this Circular; and to pay wages to laborers higher than the levels specified in Clauses 1 and 2, Article 4 of this Circular.

Article 5. Effect

1. This Circular takes effect on January 25, 2013. The region-based minimum wage levels specified in Article 3 and the regimes provided in this Circular apply from January 1, 2013.

2. This Circular replaces Circular No. 23/2011/TT-BLDTBXH of September 16, 2011, of the Ministry of Labor, War Invalids and Social Affairs, guiding region-based minimum wage levels for laborers working for companies, enterprises, cooperatives, cooperative groups, farms, households and individuals and labor-employing agencies and organizations.

3. When determining wage unit prices for laborers and wage funds for managerial employees under the Government’s Decrees No. 206/204/ND-CP of December 14, 2004; No. 207/2004/ND-CP of December14, 2004; No. 86/2007/ND-CP of May 28, 2007; and No. 141/2007/ND-CP of September 5, 2007, state-owned single-member limited liability companies, state companies not yet transformed into limited liability companies or joint-stock companies, organizations and units currently applying wage regimes like state companies or state-owned single-member limited liability companies (below collectively referred to as companies) may select to apply minimum wage levels as follows:

a/ Companies satisfying all the conditions specified in Circulars No. 07/2005/TT-BLDTBXH and No. 08/2005/TT-BLDTBXH of January 5, 2007, and No. 27/2010/TT-BLDTBXH of September 14, 2010, of the Ministry of Labor, War Invalids and Social Affairs, may apply minimum wage levels higher than the Government-prescribed common minimum wage levels in each period for determining wage unit prices for laborers and apply the wage fund-increasing co-efficient for determining planned wage funds for managerial employees provided that the increase level (in percentage) of planned average wages for full-time managerial employees compared to the actual wages paid in the preceding year (from owner-approved wage funds) must not exceed the increase level (in percentage) of planned average wages for laborers compared to the actual wages paid in the preceding year.

b/ Companies not satisfying all the conditions specified in Circulars No. 07/2005/TT-BLDTBXH and No. 08/2005/TT-BLDTBXH of January 5, 2007, and No. 27/2010/TT-BLDTBXH of September 14, 2010, of the Ministry of Labor, War Invalids and Social Affairs, not formulating and reporting on wage unit prices or suffering losses or having no profits shall apply the Government-prescribed common minimum wage levels in each period for determining wage unit prices, wage funds for laborers under regulations, planned wage funds, actually paid wage funds and wage funds for managerial employees.

When determining wage funds for laborers, if a company has laborers who have their wages calculated under regulations (being the wage coefficient according to the wage scales and tables promulgated together with the Government’s Decrees No. 205/2004/ND-CP and No. 204/2004/ND-CP, multiplied by the common minimum wage level) lower than the region-based minimum wage level, the company may add the difference between such wages and the region-based minimum wage level to the wage funds for paying to these laborers.

c/ The management units of construction investment projects of companies may apply the minimum wage level higher than the common minimum wage level which, however, must not exceed the minimum wage level selected by the companies to calculate wage unit prices, and must not increase the project management units’ management expenses, for use as a basis for establishing wage funds for paying wages to laborers.

d/ When the June 18, 2012 Labor Code takes effect, if documents providing common minimum wage levels and wage scales and tables are replaced with other documents, the provisions on common minimum wage levels and wage scales and tables at Points a, b and c above will comply with the replacing documents.

4. Funds for the implementation of the region-based minimum wage levels specified in this Circular shall be accounted into the cost prices or production and business costs of enterprises.

5. Ministers, heads of ministerial-level agencies, heads of government-attached agencies and chairpersons of provincial-level People’s Committees shall direct, urge and examine enterprises in implementing this Circular.

Any problems arising in the course of implementation should be reported to the Ministry of Labor, War Invalids and Social Affairs for prompt additional guidance.-

For the Minister of Labor, War Invalids and Social Affairs
Deputy Minister
PHAM MINH HUAN