Labor - Salary Policies in Vietnam Effective from October 2017

Enterprises in Vietnam are required to compensate for damages due to incorrectly determining the net value of the pension fund

This new content is stipulated in Circular 86/2017/TT-BTC guiding the implementation of Decree 88/2016/ND-CP on the voluntary supplemental retirement program, effective from October 1, 2017.

When the enterprise managing the pension fund incorrectly determines the net asset value of the pension fund, determines the wrong value of an individual pension account, and causes actual damages to fund participants:

- It must compensate participants as provided in Article 23 of Decree 88/2016/ND-CP dated July 1, 2016.

- The degree of error for compensation is stipulated in the regulations for determining the net asset value of the pension fund and the value of individual pension accounts, but not less than 0.75% of the net asset value of the fund.

The enterprise must announce the net asset value of the pension fund on the electronic information portals of the pension fund management enterprise and the pension agent within a maximum period of three working days from the evaluation date.

Employers using foreign labor in Vietnam must report and explain their demand via electronic means

This prominent content is stipulated in Circular 23/2017/TT-BLDTBXH (effective from October 2, 2017) guiding the issuance of work permits for foreign workers working in Vietnam via electronic means.

At least 20 days before the expected date of using foreign workers, employers must fill in information in the declaration form and submit a report explaining the demand for using foreign labor via electronic means.

Currently, the submission of declaration forms and reports explaining the demand for using foreign labor is conducted within 30 days from the expected date of use (according to Circular 40/2016/TT-BLDTBXH dated October 25, 2016).

Thus, compared to the current regulation of submitting paper documents reporting the explanation, the electronic submission of documents has shortened the time required for employers.

Support up to 300 USD/person/month for postdoctoral studies outside territory of Vietnam

Circular 88/2017/TT-BTC guides the financial mechanism for implementing the scheme of training and fostering scientific and technological human resources in the country and abroad with the state budget effective from October 7, 2017.

The subjects sent to foster scientific and technological human resources abroad will be guaranteed health insurance benefits by the state fully funding the cost of health insurance, specifically:

- The state will pay the health insurance fee at the mandatory health insurance rate according to the regulations of the host country (in US dollars or the local currency) and not exceeding 1,000 USD/person/year.

- For countries with mandatory health insurance purchase rates higher than the maximum limit specified above, the Ministry of Science and Technology will consider and decide specifically based on the agreement with the Ministry of Finance.

- In cases where the person sent for training or fostering wishes to purchase health insurance at a higher rate than specified in this Circular, they must self-fund the difference.

New regulations on the timing of salary grade increases for officers in Vietnam

This prominent regulation is found in Circular 208/2017/TT-BQP effective from October 10, 2017, guiding the salary grade transition for officers, defense workers, public employees in the def.ense sector, non-commissioned officers, and soldiers selected as professional military personnel 

The timing for the next salary grade increase for professional military personnel has been changed as compared to the current regulation in Circular 152/2007/TT-BQP dated September 25, 2007, specifically:

- The timing for the next salary grade increase for professional military personnel is calculated from the month and year of signing the decision on officer rank promotion or officer salary grade increase.

The current salary grade increase timing (according to Circular 152/2007) is determined based on the difference between the professional military personnel salary coefficient and the officer salary coefficient.

Additionally, Circular 208 also stipulates the salary grade transition for defense workers selected as professional military personnel.

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