Vietnam: Regulations on remuneration of managers in State-owned enterprises

11:20, 30/10/2016

This is an outstanding content specified in Circular No. 31/2016/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs of Vietnam, providing guidance on management of employees, salary, remuneration and bonus by organizations that are incorporated and operate as wholly state-owned single-member limited liability companies under the Law on Securities.

According to Circular No. 31/2016/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs of Vietnam, the planned payroll and remuneration budgets, realized payroll, remuneration and bonus budget and payment of salaries, remunerations and bonuses to members of Boards of Directors, Directors General, Deputy Directors General and Chief Accountants shall be determined and conducted in accordance with Articles 3, 9, 11, 12, 14, 15, 16, 17, 18 and clauses 1, 3, 4, 5 and 6 Article 10 of Circular No. 27/2016/TT-BLĐTBXH.

Where designating companies have managed to conserve and develop state-owned capital, discharge their debt obligations to the state budget in accordance with laws and regulations, prevent any reduction in labor productivity and have planned profits greater than that earned in the immediately preceding year, the planned average pay rate of a manager shall be determined according to the following function:

TLbqkh = TLcb + Hln x TLcb

Where:

- TLbqkh : Planned average pay rate

- TLcb: Basic pay rate calculated in accordance with clause 1 Article 10 of Circular No. 27/2016/TT-BLĐTBXH.

- Hln: Salary increase factor in comparison with the basic pay rate associated with profits: if the planned profit is less than 100 billion dong, Hln shall be equal to 0.5; if the planned profit varies from 100 billion dong to smaller than 200 billion dong, Hln shall be equal to 0.7; if the planned profit is 200 billion dong or more, Hln shall be equal 1.0.

The average labor productivity shall be determined in accordance with clause 2 Article 4 hereof.

View more relevant provisions at Circular No. 31/2016/TT-BLĐTBXH of the Ministry of Labor, War Invalids and Social Affairs of Vietnam, effective from December 10, 2016.

- Thanh Lam -

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