Thursday, October 27 2016


Wages redefined under labour law

Update: August, 29/2015 - 08:48

Workers do exercise to improve health quality at Son Ha Phu Tho company in Phu Tho province. Viet Nam is strived to improve the legislative framework for managing labour and improving workers' living standards. — Photo

HCM CITY (VNS)— To improve the legislative framework for managing labour and improving workers' living standards, a slew of changes and updates have been made to the Labour Code and other regulations.

Tong Thi Minh, director general of the Ministry of Labour, Invalids and Social Affairs's Department of Wage and Labour, told a seminar held in HCM City yesterday there were many new wage and overtime provisions.

Article 90 of the Labour Code now defines wage as also including allowances and other payments, which in the past were not included, she said.

Historically, the labour contract would state only the base salary and employers would pay social insurance on this amount.

Base salary plus

But starting next year, the social insurance premium will be calculated on total wages (base salary plus allowances and other payments).

Minh admitted this could cause difficulties for businesses in the short term.

Another change is that State-owned companies and joint stock companies funded by Government money no longer have to conform to Government pay scales and can fix their own wages, she said.

They no longer need to register their salaries with authorised agencies and can just send their payroll to district labour management agencies to audit.

The Government used to periodically amend the minimum wages, but this task has now been enshrined in the Labour Code. Minh said the Government, based on the minimum needs of workers, the socio-economic situation and the market wage rates, has to adjust the minimum wage every year.

The law makes it contingent on the National Wage Council to calculate the minimum wage and recommend to the Government.

To discourage employers from getting workers to work overtime at night (from 10pm to 6am), the law requires them to pay overtime wages as usual plus 20 per cent of normal hourly wage.

The seminar was organised by business consultancy NVM Group. — VNS

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