Instructions for Salary classification for managers in state-owned enterprises in Vietnam as of April 10, 2024

Instructions for Salary classification for managers in state-owned enterprises in Vietnam as of April 10, 2024 (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

On February 23, 2024, the Government issued Decree 21/2024/ND-CP amending Decree 51/2016/ND-CP on mangement of employees, salaries, bonuses of employees in single-member limited liability Companies of which charter capital is wholly owned by the State và Decree 52/2016/ND-CP providing for salary, remuneration and bonus payment to managers of single-member limited liability companies of which charter capital is wholly owned by the State

Instructions for Salary classification for managers in state-owned enterprises in Vietnam as of April 10, 2024

Salary classification for managers in state-owned enterprises from April 10, 2024, will be implemented as follows:

- Based on the organizational and management structure, the Board of Members or the President of the construction company develops and issues salary tables and salary classifications for managers and specialized controllers as a basis for implementing social insurance, health insurance, unemployment insurance, and other regimes according to the provisions of labor law.

- The salary levels in the salary schedule are decided by the Board of Members or the Company President, but it must be ensured that the salary fund calculated according to the salary levels in the salary schedule does not exceed the planned salary fund of managers and specialized controllers as prescribed in Decree 52/2016/ND-CP.

- When forming and amending the salary schedule of managers, controllers, the Board of members or the company president must consult with the representative organization of workers at the grassroots level, organize dialogue at the workplace according to regulations, report to the owner's representative agency for approval, and publicize it at the company before implementation.

Principles of determination, payment of salaries, remunerations and bonuses of managers in state-owned enterprises in Vietnam

Principles of determination, payment of salaries, remunerations and bonuses of managers in state-owned enterprises are as follows:

- Salaries paid to full-time company managers shall be determined in relation to production and business performance, outcomes achieved from management, administration and control efforts, and be restricted to maximum payment levels as well as ensure due proportion to salaries paid to company employees

- Remunerations awarded to part-time company managers working in other companies shall be calculated in relation to work duties and working hours and do not exceed 20% of salary amount paid to full-time company managers. With regard to company managers that may be appointed as representatives for contributed capital in many other companies or enterprises, remunerations paid by these companies or enterprises shall be remitted to their designating companies to decide payment of these remunerations in proportion to their performance, but restricted to a maximum of 50% of the actual amount of salaries paid by these designating companies. The remaining portion of remunerations (if any) shall be recorded as other earnings in the designating companies’ financial reports.

- The payroll and total remuneration for company managers shall be determined on a yearly basis, separated from the payroll for employees, established and submitted by designating companies at their discretion to owners for approval. Company managers shall be paid monthly salary in advance which equals 80% of the temporarily calculated amount of salaries or remunerations in that month; 20% of the remaining amount shall be subject to year-end financial settlements and payments.

- Salaries and remunerations paid to company managers shall be accounted for in the business cost or expense and posted as separate entries in annual financial statements prepared by their designating companies.

- Bonuses awarded company managers shall be determined by years in proportion to their production, business performance, outcomes produced from their management, administration or control efforts, and shall be partially paid at the end of a year and fully paid at the end of their terms of office.

- If a company President holds his/her second office as a Director General or Director, (s)he shall only be eligible to receive salary applicable to the highest position.

 After deducting amounts paid for social insurance and health insurance contributions and other payables to insurance agencies from salary, bonus and remuneration paid to the Head of the Control Board and Comptroller as provided for by Decree 52/2016/ND-CP, the designating company shall remit the difference to the owner’s representative entity to establish a general fund and pay comptrollers in proportion to their performance. 

(Article 4 of Decree 52/2016/ND-CP amended in Decree 21/2024/ND-CP)

More details can be found in Decree 21/2024/ND-CP taking effect on April 10, 2024.

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