Contents of wage reform for employees in enterprises in Vietnam

Contents of wage reform for employees in enterprises in Vietnam (Internet image) 

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

1. Contents of wage reform for employees in enterprises in Vietnam

According to Resolution 27-NQ/TW in 2018, the contents of wage reform for employees in enterprises are regulated as follows:

* Regarding regional minimum wages

- Continuously improving policies on monthly regional minimum wages; supplementing regulations on hourly regional minimum wages to increase the coverage of minimum wages and meet the flexibility of the labor market.

- Adjusting regional minimum wages to ensure the minimum living standards of employees and their families, based on factors of the labor market and socio-economic development (labor supply and demand, economic growth rate, consumer price index, labor productivity, employment, unemployment, business's payment capacity, etc.).

- Strengthening the functions, tasks, and organizational structure of the National Wages Council; supplementing independent experts participating in the Council.

* Regarding wage and income management mechanisms

- Enterprises (including 100% state-owned enterprises) are allowed to independently decide wage policies (including wage scales, wage tables, and labor norms) and pay wages not lower than the minimum wage prescribed by the State and based on collective labor agreements suitable for the production and labor organization, the capacity of the enterprise, and publicly stated at the workplace.

- The State announces the monthly and hourly regional minimum wages, the average wages in the market for different professions, and supports the provision of labor market information without directly intervening in the wage policies of enterprises. Enterprises and employees negotiate and agree on wages, sign labor contracts, and pay wages based on productivity and labor results.

Enterprises and representative organizations of employees negotiate and agree on wages, bonuses, and other incentive schemes in collective labor agreements or in the enterprise's regulations. Enhancing the role and capacity of trade unions and the inspection and examination work of state management agencies.

* Regarding state-owned enterprises

- The State establishes general principles to determine wages and bonuses for state-owned enterprises based on labor productivity and business production and efficiency, aiming to ensure wage levels in the market. Implementing the budgeting of wage costs, including bonuses, based on tasks, business production conditions, sectors, and the nature of the enterprise's activities; gradually moving towards results-oriented production tasks, management effectiveness, and the use of state capital in enterprises.

- Clearly distinguishing the wages of state representatives from the wages of the executive board; implementing the principle that whoever hires and appoints will evaluate and pay wages. The State determines the basic wage, additional wage, and annual bonuses based on the scale, complexity of management, business production efficiency, and the use of state capital by state representatives.

The basic wage is adjusted appropriately according to the market wage level in the country and the region. Gradually hiring independent board members and paying wages to the board members and auditors from post-tax profits.

The General Director and members of the executive board work under labor contracts and receive wages from the enterprise's general wage fund, including controlling the maximum wage level based on business production results and the average wage of employees. Implementing the public disclosure of the annual wages and income of state representatives and state-owned enterprise General Directors.

- For enterprises assigned to stabilize the market according to the tasks assigned by the State, calculating and determining to exclude the costs of ensuring the implementation of market stabilization tasks as a basis for determining the wages and bonuses of employees and executives of an enterprise. For public service enterprises, the State accurately calculates and includes appropriate wage costs at the market level in the costs and prices of public service products. The State implements income regulation policies to ensure harmonious interests among enterprises, managers, employees, and the State.

2. General objectives of wage reform policies in Vietnam 

According to Resolution 27-NQ/TW in 2018, the general objectives of wage reform policies for officials, public employees, armed forces, and employees in enterprises are as follows:

- Building a scientific and transparent national wage policy system that is in line with the country's practical situation, meets the development requirements of the market-oriented socialist economy and proactive international integration, and establishes harmonious, stable, and progressive labor relations.

- Creating incentives to unleash productive forces, enhancing labor productivity, improving the quality of human resources, and contributing to the construction of a clean, streamlined, efficient political system; preventing corruption and waste; ensuring the livelihoods of wage earners and their families; and promoting social progress and justice.

To Quoc Trinh

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