CIRCULAR

GUIDING MANAGEMENT OF LABOR, WAGES, REMUNERATION AND BONUSES FOR SMALL AND MEDIUM ENTERPRISE DEVELOPMENT FUND

Pursuant to the Government's Decree No. 14/2017/ND-CP dated February 17, 2017 defining functions, tasks, powers and organizational structure of the Ministry of Labor, War Invalids and Social Affairs;

Pursuant to the Government's Decree No. 39/2019/ND-CP dated May 10, 2019 on organization and operation of the small and medium-sized enterprise development fund;

Pursuant to the Government's Decree No. 51/2016/ND-CP dated June 13, 2016 on management of employees, salaries and bonuses paid to employees working in wholly state-owned single-member limited liability companies;

Pursuant to the Government's Decree No. 52/2016/ND-CP dated June 13, 2016 on management of wages, remunerations and bonuses paid to managers of wholly state-owned single-member limited liability companies;

At the request of Director of Department of Labor Relation and Wage;

The Minister of Labor, War Invalids and Social Affairs promulgates a Circular on guidelines for management of labor, wages, remuneration and bonuses for the small and medium-sized enterprise development fund.

Section 1. GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides guidelines for management of labor, salaries, remunerations and bonuses paid to employees and managers of the small and medium-sized enterprise development fund (hereinafter referred to as the Fund).

Article 2. Subjects of application

1. The Fund's employees working under labor contracts as prescribed in the Labor Code.

2. The Fund’s managerial personnel, including: Chairperson Board of Directors and members of the Board of Directors, Comptroller, Director, Deputy Director(s).

3. Entities and persons involved in the implementation of this Circular.

Section 2. MANAGEMENT OF LABOR, WAGES AND BONUSES FOR EMPLOYEES

Article 3. Labor management

The Fund shall carry out the management of employees in accordance with Section 2 of the Circular No. 26/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs, providing guidance on management of labor, salaries and bonuses paid to personnel working in wholly state-owned single-member limited liability companies (hereinafter referred to as Circular No. 26/2016/TT-BLDTBXH)

Article 4. Pay scale, chart and allowance or benefit packages

The Fund shall design and decide the pay scale, chart and allowance or benefit packages and make changes in pay grades for employees as stipulated in the Decree No. 49/2013/ND-CP dated 14 May 2013 of the Government, elaborating on some articles of the Labor Code on wages and salaries, and Circular No. 17/2015/TT-BLDTBXH dated 22 April 2015 of the Ministry of Labor - Invalids and Social Affairs,  providing instructions for design and formulation of the  pay scale, pay chart ,  allowance packages and pay grading or ranking for employees in state-owned one-member limited liability companies under the Government’s Decree No. 49/2013/ND-CP dated 14 May 2013, detailing the implementation of some articles of the Labor Code on wages and salaries.

Article 5. Budgeted, advanced and earned pay, distributed pay and bonus packages

1. The Fund shall determine budgeted, advanced and earned pay, distributed pay and bonus packages entitled to employees as prescribed in Article 9, Article 10, Article 13, Article 14, Article 15 and Clause 2, Clause 3 Article 16 of the Circular No. 26/2016/TT-BLDTBXH.

2. When calculating   average budgeted and earned pay rates in the budgeted and earned pay packages under the provisions of Article 9 and Article 14 of the Circular No. 26/2016/TT-BLDTBXH, the Fund shall compute the labor productivity and profit indices, including 

a) The average labor productivity (planned or realized in the computation year, or realized in the preceding year) index is calculated as the gross revenue minus total expenses, excluding salary.

b) The profit (planned, realized in the year or realized in the preceding year) index is replaced by the index showing the difference between total revenue and total cost.

Total revenue and total expenditure prescribed in Point a and Point b of this Clause shall be determined according to the Government's Decree No. 39/2019/ND-CP dated May 10, 2019 on organization and operation of the small and medium-sized enterprise development fund (hereinafter referred to as Decree No. 39/2019/ND-CP).

Article 6. Exclusion of uncontrollable factors from affecting budgeted and earned pay packages for employees

When determining budgeted and earned pay packages for employees, the Fund shall rule out uncontrollable factors affecting the labor productivity and total turnover minus total expenses as prescribed in Article 11 of Circular No. 26/2016/TT-BLDTBXH and Clause 3 Article 55 of Decree No. 39/2019/ND-CP.

Section 3. MANAGEMENT OF WAGES, REMUNERATION AND BONUSES PAID TO MANAGERS

Article 7. Salary grading for managers

1. The Fund’s managers shall be entitled to respective pay grades, pay rise and changes in pay grades as prescribed in Section 2 of the Circular No. 27/2016/TT-BLDTBXH dated September 01, 2016 by the Ministry of Labor, War Invalids and Social Affairs on guidelines for wages, remunerations and bonuses paid to managers of wholly state-owned single-member limited liability companies (hereinafter referred to as the Circular No. 27/2016/TT-BLDTBXH).

2.  Standards for salary grading for the Fund’s managers shall  resemble standards for salary grading for managers of financial companies (Standard No. 56applied to financial companies) issued together with the Joint Circular No. 23/2005/TTLT-BLDTBXH-BTC dated August 31, 2005 of the Ministry of Labor - Invalids and Social Affairs and the Ministry of Finance, guiding the salary ranking and  grading for full-time members of the Governing Board, General Directors, Directors, Deputy General Directors, Deputy Directors and Chief Accountants of state-owned companies, until the Government regulates the new salary regime applicable to wholly state-owned single-member limited liability companies of.

Article 8. Determination of pay, remuneration and bonus packages for managers

1. Budgeted pay and remuneration package; earned pay and remuneration package; payment of wages, remuneration and bonuses to managers of the Fund shall be governed by regulations laid down in Article 3, Article 9, Clause 1, 3, 4, 5, 6 of Article 10, Article 11, Article 12, Article 14, Article 15, Article 16, Clause 2, Clause 3 of Article 17, Article 18 and Article 19 of the Circular No. 27/2016/TT-BLDTBXH.

2. When determining the  budgeted and earned pay and remuneration packages as prescribed in Clause 1 of this Article, the Fund shall determine the average labor productivity and profit indices as prescribed in Clause 2 of Article 5 of this Circular,  including the following situation:

If the Fund fully conforms to regulatory requirements; ensuring  state assets are conserved and grown, its revenues are remitted into the state budget; it retains its revenues to establish   a fund for provision against risks under regulations; its average labor productivity is not decreased and the difference between total revenue and total expense is higher than that realized in the preceding year, the budgeted average pay rate  of managerial personnel shall be determined according to the following formula:

TLbqkh = TLcb + TLcb x Hln

Where:

- TLbqkh: Budgeted average pay rate of  managerial personnel.

- TLcb: Base pay rate of managerial personnel, which is determined according to Clause 1 Article 10 of Circular No. 27/2016/TT-BLDTBXH.

- Hln: Factor showing increase in wage or salary of managerial personnel in proportion to their base pay rate in relation to the difference between total revenue and total expense, which is calculated in the following situations:  if the difference between total revenue   total expense is less than 50 billion dong, Hln will be 0.3 at maximum;  if the difference between total revenue and total expense is from 50 billion dong to less than 100 billion dong, Hln will be 0.5 at maximum; if the difference between total revenue and total expense is from 100 billion dong to less than 150 billion dong, Hln will be 0.7 at maximum; if the difference between total revenue and total expense is  150 billion dong or more, Hln will be 1.0 at maximum.

3. When determining their budgeted and realized pay package, the Fund shall exclude uncontrollable factors affecting the labor productivity and the difference between total revenue and total expense as prescribed in Article 13 of the Circular No. 27/2016/TT-BLDTBXH and Clause 3 Article 55 of the Decree No. 39/2019/ND-CP.

Section 4. IMPLEMENTATION RESPONSIBILITIES AND EFFECT

Article 9. Responsibility for implementation

1. The Fund’s Director shall perform the tasks specified in Article 17 of Circular No. 26/2016/TT-BLDTBXH.

2. The Fund’s Board of Directors shall perform the tasks specified in Article 18, Clause 4 Article 22 of the Circular No. 26/2016/TT-BLDTBXH and Article 20, Clause 4 Article 25 of the Circular No. 27/2016/TT-BLDTBXH. When sending its report on wages, salaries and bonuses to the owner's representative agency, it shall also send them to the Ministry of Labor, War Invalids and Social Affairs for its inspection and supervision.

3. Comptrollers shall perform the tasks specified in Article 19 of Circular No. 26/2016/TT-BLDTBXH and Article 21 of Circular No. 27/2016/TT-BLDTBXH.

4. The owner's representative agency (the Ministry of Planning and Investment) shall perform the tasks specified in Clauses 1, 2, 3, 4, 6 and 7 Article 20 of Circular No. 26/2016/TT-BLDTBXH and Clauses 1, 2, 3, 4, 6, 7 and 8 Article 22 of Circular No. 27/2016/TT-BLDTBXH. When sending its opinions on annual salary, remuneration and bonus packages, it shall also send them to the Ministry of Labor, War Invalids and Social Affairs for its inspection and supervision.

Article 10. Effect

1. This Circular comes into force from February 15, 2020. Regulations specified in this Circular shall be applied from July 1, 2019.

2. The Circular No. 38/2016/TT-BLDTBXH dated October 25, 2016 of the Ministry of Labor, War Invalids and Social Affairs on guidelines for management of labor, salaries and remunerations paid to the small and medium-sized enterprise development fund shall be null and void from the date of entry into force of this Circular.

Difficulties that arise during the implementation of this Circular should be reported to the Ministry of Labor, War Invalids and Social Affairs to seek its timely decisions on any necessary modifications./.