This is one of the prominent contents related to the issue of wages proposed by the Ministry of Labor, War Invalids and Social Affairs in the amendment and supplementation of certain Articles of the Labor Code 2012.
Article table of contents
After 3 years of the Labor Code 2012 being implemented in practice, many limitations have been revealed. In the Draft Summary Report Evaluating 3 Years of Implementing the Labor Code dated October 3, 2016, the Ministry of Labor, Invalids and Social Affairs pointed out some limitations in the process of enforcing labor laws concerning wages, such as some unclear regulations causing confusion and difficulty in the application of the law: working hours of employees paid on a task-based basis, insurance policies of employees, wage increase issues for employees paid on a task-based basis; and not clearly specifying the type of salaries payable to employees.
There are many shortcomings in the implementation as follows:
- The wage mechanism in enterprises remains rigid and lacks flexibility, mainly based on the minimum wage regulations set by the Government of Vietnam. As a result, labor productivity and quality remain low.
- The construction of wage scales in enterprises: Wage scales are built with many levels, separating wages into various components such as base salary, allowances, benefits, and other supplements to evade social insurance contributions. Some enterprises stipulate complicated standards for wage increases, conditions for receiving allowances, benefits, bonuses, monthly, quarterly, and yearly bonus methods, which are difficult for workers and labor collectives to understand, monitor, and supervise.
- Enterprises establish wage payment, bonus payment, and wage scale increase policies in a formalistic manner, not suitable for the actual situation of the enterprise. Despite having many levels in their wage scales, employees do not receive wage increases. Only when the regional minimum wage increases do the employees get a corresponding increase or a fixed rate not lower than the regional minimum wage
.- Currently, many enterprises have 3 types of wages: wages for social insurance participation and policy resolution, wages for tax finalization, and actual wages paid to employees. This makes it difficult for state management agencies to manage and inspect wage policies concerning enterprises.
To address these limitations, the Ministry has proposed and recommended amendments to various contents:
- Add specific regulations and guidelines for task-based wage payment to employees;- Increase administrative penalties for the failure to establish and submit wage scales to the local labor management agency;
- To protect employees' rights, add regulations on administrative penalties for not issuing wage, bonus, and wage scale increase policies for employees, or issuing them but not implementing them;- Currently, the regulation of minimum wage beneficiaries is unreasonable and cannot determine the simplest job in normal working conditions. Additionally, sectoral minimum wages are established based on agreement among parties, depending on actual conditions, so rigid regulation in the law is unnecessary. There is an urgent need to promulgate a Minimum Wage Law for application and implementation in accordance with market mechanisms;
- Specify the National Wage Council;
- Provide guidelines on wage payment forms, especially time-based payment (monthly, weekly, daily, hourly) so that employers and employees can implement and establish wage levels corresponding to the minimum wage rates per month, day, and hour according to the Government of Vietnam's regulations;
- Include clearer and easier-to-implement regulations on calculating overtime wages when compensated with time off; wages for working on a holiday coinciding with a weekly day off;
- Clearly stipulate which wage should be the basis for wage payment? Actual or contractual wages? Should employees receive advance wages based on actual or contractual wages?
- Define specific main contents for the Wage Book for enterprises to implement.
