New regulations on salary scales, tables and allowances for state-owned enterprise employees

This is a new regulation stated in Circular No. 06/2024 recently issued by the Ministry of Labor, War Invalids and Social Affairs, effective from September 15, 2024.

This Circular amends and supplements a number of articles of Circular No. 26/2016 guiding the implementation of labor management, wages and bonuses for employees working in single-member limited liability companies with 100% charter capital held by the State, and Circular No. 27/2016 guiding the implementation of salary, remuneration and bonus regimes for managers of single-member limited liability companies with 100% charter capital held by the State.

Accordingly, the salary scale, salary table, and salary allowances for employees in a single-member limited liability company with 100% state capital (state-owned enterprise) as prescribed in Circular No. 26/2016 are amended as follows:

Based on the production organization and labor organization, the company reviews and decides to continue maintaining or amending, supplementing or developing and issuing new salary scales, salary tables, and salary allowances (with applicable standards), as a basis for salary arrangement, salary payment, and implementation of regimes for employees according to the provisions of labor law.

The salary levels in the salary scale, salary table, and salary allowances are decided by the company. However, this must ensure that the salary fund is determined based on the total annual salary of all employees, calculated according to the salary levels in the salary scale, salary table, and salary allowances of the company, and must not exceed the planned salary fund of the employees.

When amending, supplementing or developing and issuing new salary scales, salary tables and salary allowances, the company must consult the opinions of the organization representing employees at the facility.

At the same time, organize dialogue at the workplace according to the provisions of the Labor Code and its implementing guidelines. Report to the owner's representative agency for comments, and make it public at the company before implementation.

For companies that are losing money or have no profit (after excluding objective factors, if any), the planned average salary level is calculated using the average salary level in the labor contract.

The average salary in the labor contract, including salary, salary allowance, and other supplements stated in the labor contract, is stipulated in Circular No. 10/2020 of the Minister of Labor - Invalids and Social Affairs detailing and guiding the implementation of a number of articles of the Labor Code on the content of labor contracts, Collective Bargaining Council, and occupations and jobs that have a negative impact on reproductive and child-rearing functions.

Objective factors affecting labor productivity and company profits to be excluded when determining employee wages are stipulated in Decree No. 51/2016/ND-CP and Decree No. 52/2016/ND-CP regulating wages, remuneration, and bonuses for managers of single-member limited liability companies in which the State holds 100% of charter capital.

In addition, Circular No. 06/2024 also amends a number of regulations on salary table construction, salary classification, and salary increase for employees in state-owned enterprises in Circular No. 27/2016.

Accordingly, regarding the construction of the salary table, based on the organization of the company's management apparatus, the Board of Members or the Chairman of the company shall develop and issue a salary table (with applicable standards), as a basis for implementing social insurance, health insurance, unemployment insurance, and other regimes for managers and specialized controllers according to the provisions of labor law.

The salary levels in the salary table of the manager and the specialized Controller are decided by the Board of Members or the Chairman of the company.

However, it is necessary to ensure that the salary fund is determined based on the total annual salary of all managers and specialized controllers calculated according to the salary levels in the salary table, and must not exceed the planned salary fund of the managers and specialized controllers.

When building or amending and supplementing the salary table of the manager, Controller, Board of Members, or Chairman of the company, the opinion of the organization representing employees at the facility must be consulted.

Along with that, organize dialogue at the workplace according to the provisions of the Labor Code and guiding documents, report to the owner's representative agency for approval, and publicly announce at the company before implementation.