Decree No. 167/2007/ND-CP dated November 16, 2007 of the Government providing area minimum wage rates for employees working for [Vietnamese] companies, enterprises, co-operatives, co-operative groups, farms, family households, individuals and other Vietnamese organizations which hire employees

DECREE

PROVIDING AREA MINIMUM WAGE RATES FOR EMPLOYEES WORKING FOR [VIETNAMESE] COMPANIES, ENTERPRISES, CO-OPERATIVES, CO-OPERATIVE GROUPS, FARMS, FAMILY HOUSEHOLDS, INDIVIDUALS AND OTHER VIETNAMESE ORGANIZATIONS WHICH HIRE EMPLOYEES

THE GOVERNMENT

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

Pursuant to the Labour Code dated 23 June 1994, the Law on Amendment of the Labour Code dated 2 April 2002, and the Law on Amendment of the Labour Code dated 29 June 2006;

Pursuant to Resolution 56-2006-NQ-QH11 of Legislature 11 of the National Assembly dated 29 June 2006 on the socio-economic developmental master plan for the five year period 2006 - 2010;

Having considered the proposal of the Minister of Labour, War Invalids and Social Affairs;

DECREES:

Article 1

The area minimum wage rate is hereby regulated and shall apply to the following:

1. Companies established and which organize their management and operate pursuant to the Law on State Owned Enterprises.

2. One member limited liability companies in which the State owns 100% charter capital and which organize their management and operate pursuant to the Law on Enterprises.

3. Enterprises established and which organize their management and operate pursuant to the Law on Enterprises (excluding enterprises with foreign owned capital).

4. Co-operatives, federations of co-operatives, co-operative groups, farms, family households, individuals and other Vietnamese organizations which hire employees. All the companies, enterprises, organizations and individuals stipulated in clauses 1 to 4 inclusive of this article are hereinafter collectively referred to as enterprises.

Article 2

The area minimum wage rate to be used to pay employees doing the most basic work in normal working conditions at the enterprises stipulated in article 1 of this Decree as from 1 January 2008 shall be as follows:

1. Six hundred and twenty thousand (620,000) Vietnamese Dong per month, applicable to enterprises operating in inner city districts of Hanoi and Ho Chi Minh City.

2. Five hundred and eighty thousand (580,000) Vietnamese Dong per month, applicable to enterprises operating in outer city districts of Hanoi and Ho Chi Minh City; in inner city districts of Hai Phong; in the city of Ha Long in the province of Quang Ninh; in the city of Bien Hoa, in the township of Long Khanh, and in the rural districts of Nhon Trach, Long Thanh, Vinh Cuu and Trang Bom in the province of Dong Nai; in the township of Thu Dau Mot and in the rural districts of Thuan An, Di An, Ben Cat and Tan Uyen in the province of Binh Duong; and in the city of Vung Tau in the province of Ba Ria Vung Tau.

Article 3

1. The enterprises stipulated in clauses 1 and 2 of article 1 of this Decree shall apply the area minimum wage rates stipulated in article 2 of this Decree in order to calculate their wage unit cost. The enterprises stipulated in article 1 of this Decree which ensure the conditions stipulated in article 4 of Decree 206-2004-ND-CP of the Government dated 14 December 2004 on labour management, wages and income in state owned companies, shall apply an increase co-efficient not to exceed 1.34 times the general minimum wage rate. If such enterprises ensure the condition stipulated in article of Decree 206 and have planned profits 5% or more

2. Any enterprise stipulated in clauses 3 and 4 of article 1 of this Decree:

(a) Shall apply the area minimum wage rates stipulated in article 2 of this Decree in order to calculate wage scales, wage tables, and all types of allowances; and for calculating wage rates to be recorded in labour contracts and for implementing other regimes formulated by the enterprise and promulgated by it in accordance with its authority as provided in the law on labour.

(b) The lowest wage rates payable for employees who have passed vocational training courses (including courses which the enterprise itself holds) must be at least 7% higher than the area minimum wage rates stipulated in article 2 of this Decree.

(c) Enterprises are encouraged to pay higher area minimum wage rates than those stipulated in article 2 of this Decree.

(d) Based on the area minimum wage rates stipulated in article 2 of this Decree, an enterprise shall adjust the amount of wages stipulated in labour contracts accordingly.

Article 4

1. The area minimum wage rates stipulated in article 2 of this Decree shall be amended depending on the economic growth rate, the cost of living index, and labour supply and demand at any one time.

2. The Ministry of Labour, or Invalids and Social Affairs shall, after consultation with the Vietnam General Confederation of Labour, representatives of employers and relevant ministries and branches, make submissions to the government for amendment of the area minimum wage rates stipulated in clause 2 of this article.

Article 5

This Decree shall be of full force and effect as from 1 January 2008.

The Minister of Finance shall provide guidelines on implementation of this Decree.

Article 6

Ministers, heads of ministerial equivalent bodies, heads of Government bodies, chairmen of people's committees of provinces and cities under central authority and the organizations and individuals concerned shall be responsible for implementation of this Decree.