04 principles of determination and adjustment of unit labor costs applicable from February 15, 2020 in Vietnam

Currently, Circular No. 15/2019/TT-BXD of the Ministry of Construction of Vietnam instructs how to calculate unit labor costs in the building and construction sector (including construction workers and consultants) for determination and administration of investment and construction expenses, including preliminary total investment, total investment amount, estimated construction cost, construction bid price, construction project cost, construction contract value, construction price index and estimated cost of construction counseling service.

Unit labor costs in the building and construction sector determined according to instructions given in Circular No. 15/2019/TT-BXD must adhere to the following principles:

- Unit labor costs must be matched with workmanship corresponding to personnel ranks specified in the set of norms for estimated construction costs and working condition of construction workers; occupational characteristics and nature; must be tallied with work contents, nature, titles, qualification and quality of construction consultants.  

- Unit labor costs must agree with the level of construction personnel costs (already including indexing factors) on respective local labor markets provided that they are not lower than region-based minimum pay rates prescribed by the Government. 

- Unit labor costs must conform to requirements for payment of several costs for which construction employees are liable (e.g. social insurance, health insurance, unemployment insurance contributions and trade union dues).

- Unit labor costs in the building and construction sector must be calculated on the basis of an eight-hour working day.

Unit labor costs for construction personnel may be adjusted when there is any variation in the level of market costs of construction personnel.

View full text at Circular No. 15/2019/TT-BXD of the Ministry of Construction of Vietnam, effective from February 15, 2020.

Thu Ba

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