Decree 44/2025: Guidelines on the distribution of salaries in state-owned enterprises in Vietnam

Decree 44/2025: Guidelines on the distribution of salaries in state-owned enterprises in Vietnam​ (Image from the Internet)

On February 28, 2025, the Government of Vietnam issued Decree 44/2025/ND-CP on the management of labor, salary, remuneration, and bonuses in state-owned enterprises.

Decree 44/2025: Guidelines on the distribution of salaries in state-owned enterprises in Vietnam

The salary distribution in state-owned enterprises is conducted as prescribed in Article 19 of Decree 44/2025/ND-CP as follows:

- Employees and the Executive Board are paid based on the salary regulation issued by the enterprise, where:

+ Employees' salaries are paid according to the position title or job, linked to labor productivity and each individual's contribution to the enterprise's business results;

+ The salaries of the Executive Board are paid according to position title, position, and business results, with the salary level of the General Director or Director (except in cases where the General Director or Director is hired under a labor contract) not exceeding 10 times the average salary of employees.

- When developing the salary payment regulation, the enterprise must consult the representative organization of employees at the workplace, organize dialogues at work as prescribed by labor law, and report to the owner's representative agency for monitoring, supervision, and publication at the enterprise before implementation.

Additionally, salary advances and reserves in state-owned enterprises are conducted as prescribed in Article 18 of Decree 44/2025/ND-CP as follows:

- Based on the planned salary fund determined according to regulations in Sections 2, 3, and 4 of Chapter III of Decree 44/2025/ND-CP, enterprises decide the advance payment to employees and the Executive Board monthly. In cases where the advance exceeds the actual salary fund, repayment of the excessive advance salaries must be made from the next year's salary fund.

- Based on the actual salary fund determined according to regulations in Sections 2, 3, and 4 of Chapter III of Decree 44/2025/ND-CP, enterprises may use the entire salary fund to pay employees and the Executive Board within the year or reserve a portion for the salary reserve fund for the next year after paying the full policy salary and additional night work, overtime salaries as prescribed by the Labour Code 2019. The maximum deduction for the salary reserve fund must not exceed 17% of that year’s actual salary fund and must be fully settled before June 30 of the subsequent year; If not fully paid by this time, the outstanding reserve must be reversed into the company's other income.

Note: For enterprises wholly owned by the State with a management structure modeled as the Company President cum General Director, allowed by the Government of Vietnam to set salaries of the Company President and Controller in the common salary fund with employees and the Executive Board, the determination of these salaries continues within the common salary fund under regulations in Chapter III of Decree 44/2025/ND-CP. Based on the salary regulation, annually the enterprise reports to the owner's representative agency for review and determination of specific salaries of the Company President and the Controller.

Decree 44/2025/ND-CP takes effect from April 15, 2025. The policies stipulated in Decree 44/2025/ND-CP are implemented from January 1, 2025.

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