How shall companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam pay employees salary advances?

How shall companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam pay employees salary advances?

Pursuant to Article 9 of the Circular 28/2016/TT-BLĐTBXH stipulating instructions for salary advance and unit pay for employees of companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam as follows:

1. Based on the production and business plan, a company may decide to pay employees monthly salary advances.

2. Depending on practical requirements, a company may calculate the unit pay based on the gross revenue, or by the gross revenue minus the gross cost, excluding salaries, or the profit, unit product or based on other production and business effectiveness indicators which are relevant to its operational characteristics for the purpose of managing its production and business operations.

What are regulations on realized salary payroll of companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam?

Pursuant to Article 10 of the Circular 28/2016/TT-BLĐTBXH stipulating realized salary payroll of companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam as follows:

1. The realized salary payroll of employees shall be determined on the basis of the actual average number of employees referred to in paragraph 2 and the realized average rate of salary specified in paragraph 3 of this Article.

2. Companies shall calculate the actual average number of salary according to instructions given in the Appendix hereto attached and in association with the planned number of employees which has been approved by the Members’ Board or the Management Board to ensure that, in either case where recognized production and business volume and duties do not increase or management positions, production or business establishments of the company do not increase in comparison with the plan, the actual average number of employees used as the basis for determining the salary payroll shall not exceed the planned average number of employees.

3. The realized average rate of salary shall be calculated on the basis of the planned average rate of salary associated with the increased or decreased level of the average labor productivity and the realized profit in comparison with the plan, subject to the principle whereby the planned average rate of salary is determined on the basis of the realized average rate of salary recorded in the previous year associated with the increased or decreased level of the average labor productivity and the planned profit in comparison with the realized ones recorded in the previous year, as prescribed by Article 8 hereof.

4. If a company incurs loss or generates no profit (after elimination of objective factors (if any)), it shall calculated the realized salary payroll by aggregating the average rate of salary agreed upon in the employment contract, salary amounts paid on national holidays or paid leaves (if not included yet), and extra pays for night work or overtime work, as prescribed by the Labor Code.

How shall salary of companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam be distributed?

Pursuant to Article 11 of the Circular 28/2016/TT-BLĐTBXH stipulating instructions for salary distribution of companies whose shares or contributed capital portions are predominantly owned by the State in Vietnam as follows:

1. Companies shall establish rules for payment of salary relative to work positions or titles, ensure compliance with law, democracy, equality, public availability, transparency and involvement of the trade union’s Executive Board and all employees.

2. Based on the realized salary payroll and rules for payment of salary, companies shall be obliged to pay salaries to employees in association with their operational output, quality and effectiveness, or pay deserving salaries to employees who have shown their brilliance, professional or engineering expertise, prove their high labor productivity and contribute significantly to these companies.

3. Companies shall not be allowed to use the salary payroll of employees for the purpose of paying salaries to company managers and for other purposes as well.

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