Circular No. 17/2019/TT-BLDTBXH dated November 06, 2019 guidance on determination of cost of labor constituting prices of public products and services supplied by enterprises with funding from state budget

CIRCULAR

GUIDANCE ON DETERMINATION OF COST OFLABORCONSTITUTING PRICES OF PUBLIC PRODUCTS AND SERVICES SUPPLIED BY ENTERPRISES WITH FUNDING FROM STATE BUDGET

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

Pursuant to the Government’s Decree No. 32/2019/ND-CP dated April 10, 2019 prescribing task assignment, ordering or bidding for supply of public products and services funded by state budget for recurrent expenditures;

At the Director General of the Department of Industrial Relations and Wage;

The Minister of Labor, War Invalids and Social Affairs promulgates a Circular providing guidance on determination of cost of labor constituting prices of public products and services supplied by enterprises with funding from state budget.

Article 1. Scope

This Circular provides guidance on determination of the cost of labor constituting prices of public utility products and services prescribed in Appendix II and prices of public non-business services prescribed in Table 02 in Appendix I enclosed with the Government's Decree No. 32/2019/ND-CP dated April 10, 2019.

Article 2. Regulated entities

Employees and managers of enterprises that supply public products and services; enterprises, regulatory authorities, organizations and individuals involved in the preparation, appraisal and approval for cost estimates, deciding prices of public products and services, and payment of costs of supplying public products and services within the scope of this Circular.

Article 3. Grounds for determining cost of labor constituting prices of public products and services

1.The cost of labor that constitutes the prices of public products and services shall be determined on the basis of the labor productivity norms (included in economic - technical, labor and cost norms) adopted by ministries, regulatory authorities and provincial people’s committees, salaries and other costs relating to direct workers, specialized workers, clerks, attendants, and managers of enterprises that supply public products and services.

2.Salaries paid to direct workers, specialized workers, clerks and attendants shall be determined by multiplying grade or rank-based salary coefficients, allowance coefficients of workers who directly engage in the production or supply of public services by the statutory pay rate stipulated by the Government and the region-based indexing factor.

3.Salaries paid by managers of enterprises (including Chairpersons of Board of Directors or Board of Members or Presidents of companies; members of Board of Directors or Board of Members; heads of Board of Supervisors; Supervisors; General Directors or Directors; Deputy General Directors or Deputy Directors; Chief Accountants) shall be determined on the basis of base salaries which are subject to the rank of corporations or companies.

4.Other costs included in the cost of labor such as compulsory social insurance, health insurance and unemployment insurance contributions, and union dues payable by employers shall be determined in accordance with law regulations; costs of meals for shift workers and other benefits provided for each specific group of workers (if any) shall comply with law regulations.

Article 4. Determination of salaries of direct workers, specialized workers, clerks and attendants

Salaries of direct workers, specialized workers, clerks and attendants that constitute the price of a public product/service shall be determined by adopting the following formula:

(1)

Where:

1.Vlđ: Salaries of each group of direct workers, specialized workers, clerks and attendants, which constitute the price of a public product/service.

2.n: the number of job titles or positions of each group of direct workers, specialized workers, clerks and attendants, which constitute the price of a public product/service.

3.Tlđi:total labor productivity norm-based working days of the job title or position i of each group of workers engaged in the production or service supply, which is determined on the basis of the labour consumption rate accounted for the public product or service and converted into working days according to volume and job requirements for each specific public product or service and labor productivity norms adopted by Ministries, regulatory authorities and provincial People’s Committees.

4.MLthi:the monthly salaries of the job title or position i of each group of workers which constitute the price of a public product or service, and shall be determined by adopting the following formula:

MLthi = (Hcbi + Hpci) x MLcs x (1 + Hđc)(2)

Where:

a) Hcbi:The grade or rank-based salary coefficient of the job title or position i of each group of workers, which is determined according to economic-technical norms promulgated by the relevant Ministry or provincial People's Committee on the basis of salary coefficient of each group of workers prescribed in Section I and Section II of the Appendix enclosed herewith.

b) Hpci:The coefficient of allowances for the job title or position i of each group of workers, including physical hardship, hazard and danger allowances, region-based allowance, mobility allowance, responsibility allowance, position allowance, attraction allowance and production instability coefficient (if any) as prescribed in Section III of the Appendix enclosed herewith.

c) MLcs:The statutory pay rate announced by the Government in each period.

d) Hđc:The indexing factor which is decided by the relevant Ministry or provincial People’s Committee and shall not exceed 1.2, 0.9, 0.7 or 0.5 for employees working in region I, region II, region III or region IV respectively.Regions I, II, III and IV are those in which the minimum region-based wages are applied as prescribed by the Government in each period.

When determining MLthi by adopting the formula (2), if the determinedMLthifor a job title or position is lower than the minimum region-based wage announced by the Government, MLthi shall be equal to the minimum region-based wage.

Article 5. Determination of salaries of corporate managers

Salaries of corporate managers which constitute the price of a public product or service shall be determined by adopting the following formula:

(3)

Where:

1.Vql:Salaries of corporate managers which constitute the price of a public product or service.For the public product or service for which the cost estimate is being made according to regulations of the Ministry of Construction, salaries paid to managers shall be accounted for in general and administrative expenses.

2.m:The number ofexecutive level positions or titles which constitute the price of a public product or service.

3.Tqij:Total labor productivity norm-based working days of the executive level position or title j as prescribed by the relevant Ministry or provincial People’s Committee for supplying a public product or service.

4. TLcbj:The monthly base salary, subject to the corporation or company’s rank, of holders of the executive level position or title j, which is prescribed by the relevant Ministry or provincial People’s Committee and shall not be higher than the base salaries in Section IV of the Appendix enclosed herewith.

Article 6. Determination of salaries in special cases

With regard to special public products, or services, or those supplied in a region where the salaries constituting the price of that product or service are higher than those prescribed in Article 4 and Article 5 hereof, the relevant Ministry or provincial People’s Committee shall determine specific salary amounts and reach an agreement with the Ministry of Labor, War Invalids and Social Affairs on such determined salary amounts before making final decision.

Article 7. Determination of other costs

1.Other costs of direct workers, specialized workers, clerks and attendants shall be determined by adopting the following formula:

(4)

Where:

a) Vlđkhác:Other costs of each group of direct workers, specialized workers, clerks and attendants, which constitute the price of a public product/service.

b) Tlđi:Total labor productivity norm-based working days of the job title or position i of each group of workers eligible for mid-shift meals and other benefits as announced by the relevant Ministry or provincial People’s Committee for supplying a public product or service.

c) CĐăci:The mid-shift meal cost of the job title or position i as prescribed by laws.

d) CĐki:Other benefits for job title or position i (if any) as prescribed by laws.

dd) BHlđ:The cost of compulsory social insurance, health insurance and unemployment insurance contributions, and union dues payable by the employer for each group ofdirect workers, specialized workers, clerks and attendants, determined in accordance with law regulations.

2.Other costs of corporate managers shall be determined by adopting the following formula:

(5)

Where:

a) Vqlkhác:Other costs of corporate managers which constitute the price of a public product or service.

b) Tqlj:Total labor productivity norm-based working days of holders of the executive level position or title j eligible for mid-shift meals and other benefits as announced by the relevant Ministry or provincial People’s Committee for supplying a public product or service.

c) CĐăcj:The mid-shift meal cost of the executive level position or title j as prescribed by laws.

d) CĐkj:Other benefits for the executive level position or title j (if any) as prescribed by laws.

dd) BHql:The cost of compulsory social insurance, health insurance and unemployment insurance contributions, and union dues payable by the employer for corporate managers, determined in accordance with law regulations.

Article 8. Responsibility for implementation

1.Ministries and provincial People’s Committees shall:

a) review, amend, supplement and announce new reasonable labor productivity norms for used as the basis for determining the cost of labor constituting prices of public products and services.

b) prescribe and provide guidance on determination of the cost of labor constituting each specific public product and service.

c) receive reports submitted by suppliers of public products and services, evaluate the determination of the cost of labor constituting prices of public products and services for which contracts have been signed or which have been ordered or assigned in the previous year, prepare consolidated reports according to Form No. 01 enclosed herewith, and then submit them to the Ministry of Labor, War Invalids and Social Affairs by March 31 every year.

2.Enterprises supplying public products/services shall:

a) pursuant to provisions herein and other guidelines provided by Ministries and provincial People’s Committees for each specific public product/service, determine the cost of labor constituting prices of public products/services for using as the basis for bidding or reporting to the relevant Ministry or provincial People’s Committee for making decisions on order placement or task assignment.

b) determine the salaries paid or advanced according to the volume, quality and progress of supply of the public product or service; pay salaries to workers according to the enterprise’s regulations on salary payment.

c) evaluate the determination of the labor of cost constituting the price of public product or service under the sign contract (in case of bidding) or the decision on order placement or task assignment in the previous year and submit a report thereof, which is made according to Form No. 02 enclosed herewith, to the relevant Ministry or provincial People’s Committee by January 31 every year.

Article 9. Implementation

1.This Circular comes into force from December 21, 2019.

2.The Circular No. 26/2015/TT-BLDTBXHdated July 14, 2015 of the Ministry of Labor, War Invalids and Social Affairs shall cease to have effect from the effective date of this Circular.

3.The cost of labor constituting prices of public products and services prescribed herein shall apply from June 01, 2019 (when the Government's Decree No. 32/2019/ND-CP dated April 10, 2019 comes into force).

4.With regard to public products/services which have been assigned, ordered or bid for before the effective date of this Circular, the cost of labor shall be determined as follows:

a) The cost of labor constituting the price of the public product or service which has been accepted or liquidated before the effective date of this Circular shall not be considered or adjusted in accordance with regulations herein.

b) If the public product or service is still under progress when this Circular comes into force, the cost of labor constituting the price of that product or service shall be considered and adjusted in proportion to the volume of product/service supplied from June 01, 2019 afterwards in accordance with regulations herein.

5.With regard to a public product, or service, or work items with fundamental construction performed in accordance with law regulations on construction, the cost of labor constituting the price of that product or service shall be determined in accordance with law regulations on construction.

6.When a single-member limited liability company of which 100% of charter capital is held by the State, or a company of which voting shares (stakes) are held by the State, supplies public product or service in accordance with regulations herein, the cost ofsalaries shall be determined according to the volume and quality of finished product or service ordered or assigned by or supplied under a contract signed with the relevant Ministry or provincial People’s Committee.

Difficulties that arise during the implementation of this Circular should be promptly reported to the Ministry of Labor, War Invalids and Social Affairs for consideration./.

APPENDIX

SALARY COEFFICIENTS, ALLOWANCES AND SALARIES OF WORKERS USED AS THE BASIS FOR DETERMINATION OF COST OF LABOR CONSTITUTING PRICES OF PUBLIC PRODUCTS AND SERVICES SUPPLIED BY ENTERPRISES WITH FUNDING FROM STATE BUDGET
(Enclosed with the Circular No. 17/2019/TT-BLDTBXH dated November 06, 2019 of the Ministry of Labor, War Invalids and Social Affairs)

I. DIRECT WORKERS

1. For list of public utility products and services (provided in Appendix No. II enclosed with the Government’s Decree No. 32/2019/ND-CP dated April 10, 2019)

1.1. Management and operation of hydraulic structures, fishing logistics, agriculture and aquaculture (Management and operation of large-scale and specially significant hydraulic structures, provision of relevant public irrigation products and services in accordance with regulations of the Law on irrigation; management and operation of medium- and small-scale hydraulic structures, provision of relevant public irrigation products and services in accordance with regulations of the Law on irrigation; management, operation and upgrading of storm shelters for fishing boats; provision of offshore fishing logistics services; production, supply and storage of original plant, animal and aquatic germplasm; production of HCG products).

1.2. Urban utility services; provision of electricity and clean water (Provision of public transport services in urban areas; provision of drainage services for urban areas and centralized rural residential areas; urban funeral and cemetery services; provision of electricity and clean water for mountainous areas, remote and isolated areas, border areas and islands)

1.3. Pharmaceuticals (vaccines and biological serving the prevention and control of group-A and group-B infectious diseases in accordance with the Law on prevention and control of infectious diseases; vaccines and biological used in the expanded program on immunization; vaccines and biologicals in case where there is only one domestic manufacturer; derivatives of human plasma with an industrial scale).

1.4. Transport and supply of essential goods and services serving residents in mountainous, remote and isolated areas

2. For list of public non-business services (provided in Table 02 in Appendix I enclosed with the Government’s Decree No. 32/2019/ND-CP dated April 10, 2019)

2.1. Printing of paper money and financial instruments; production of metal money; imprinting and casting of gold bars

2.2. Culture, information and communications (Production of radio and TV programs, reportages, specialized documents and films ordered or financed by the Government; Provision of Internet radio and streaming television programs serving Vietnamese people living abroad)

2.3. Urban public utility services (Provision of services of park management, planting and caring for verdure, landscaping for sidewalks, streets, median strips, and roundabouts; urban lighting services; collection, classification, transport and disposal of municipal waste, municipal sanitation services)

2.4. Management, maintenance and upgrading of traffic works (Management and maintenance of railway infrastructure; port and railway station services; management and maintenance of highway infrastructure; ferry operation services; management and maintenance of inland waterways)

2.5. Maritime safety services; coastal information

a) Coastal information

b) Workers working at lighthouses on rivers or at sea, public navigational channels

c) Building and repair of watercrafts serving search and rescue purposes, maritime safety assurance; mechanical, electrical, electronics – informatics engineering

d) Building and repairing maritime safety facilities

dd) Geology, meteorology and hydrology, measurement and surveying

e) Seamen and workers on ships operating at sea or on river, victuallers, ships serving the management of navigational channels, survey vessels and maritime official duty ships

- Ships operating at sea or on river, victuallers, ships serving the management of navigational channels, survey vessels and maritime official duty ships regardless of ship types

- Ships operating at sea, victuallers, ships serving the management of navigational channels, and maritime official duty ships by ship types

-Ships operating on river by ship types, maritime official duty ships

Notes:

Type I:A non-motorized watercraft of 5 – 15 GT, or a motorized watercraft with the main engine power of 5 CV – 15 CV or capable of carrying 5 – 10 persons;

Type II:A watercraft capable of carrying from more than 10 persons to 50 persons, a ferry of up to 50 GT,towing fleet of up to 400 GT, or a watercraft with total main engine power of more than 15 CV to 150 CV;

Type III:A watercraft capable of carrying from more than 50 persons to under 100 persons, a ferry of 50 - 150 GT, cargo vessel of more than 150 GT to under 500 GT,towing fleet of more than 400 GT to under 1000 GT, or a watercraft with total main engine power of more than 150 CV to 400 CV;

Type IV:A watercraft capable of carrying from more than 100 persons, a ferry of more than 150 GT, cargo vessel of more than 500 GT, towing fleet of more than 1000 GT, or a watercraft with total main engine power of more than 400 CV.

f) Seamen and workers working on rescue and salvage ships, buoy tenders, search and rescue vessels, maritime official duty ships

2.6. Specific job positions

a) Ships serving dredging in port waters

b) Ships serving dredging in inland waterways

c) Captain, second-in-command officer, chief engineer, first engineer, second engineer of ships, canoes, floating cranes, floating pile driving hammers, pile-driving vessels and special purpose ships operating in inland waterways

d) Logistics ships

dd) Divers

e) Operation and maintenance of vessel traffic services of port authorities

II.SPECIALIZED WORKERS, CLERKS AND ATTENDANTS

1. Specialized workers

2. Security guards, clerks and attendants

3. Drivers

III.ALLOWANCES

1. There are 4 levels of physical hardship, hazard and danger allowances, including:0.1, 0.2, 0.3 and 0.4, applicable to persons working under hard, hazardous and dangerous conditions or extremely hard, hazardous and dangerous conditions.

2. There are 7 region-based allowance levels, including: 0.1, 0.2, 0.3, 0.4, 0.5, 0.7 and 1.0, applicable to persons working in regions in which officials are entitled to region-based allowance in accordance with the Government’s regulations.

3. There are 3 mobility allowance levels, including: 0.6, 0.4 and 0.2, applicable to workers have to regularly relocate for work such as workers in the fields of construction, surveying and exploration drilling for minerals, topographical and cadastral surveying and measurements, site surveys for specialized construction, repair and maintenance of highways, railways and inland waterways, management, maintenance and dredging of waterways, and other similar jobs.

4. There are 4 responsibility allowance levels, including 0.5, 0.3, 0.2 and 0.1, applicable to holders of executive positions (such as team or group leaders and deputy leaders, foremen, deputy foremen, shift leaders and deputy leaders, and holders of similar positions) or persons holding positions of high responsibility (such as cashiers, warehouse-keepers, cash management officers and holders of similar positions).

5. There are 4 attraction allowance rates, including: 20%, 30%, 50% and 70% of the sum of job position, rank or scale-based salary and the allowance for leadership position, applicable to persons working at sites of construction works whose progress must be fastened or in new economic zones, or extremely disadvantaged regions where attraction allowance must be payable as regulated by the Government.

For using the attraction allowance in the formula (1) hereof, the attraction allowance rates must be converted into allowance coefficient as follows:

Example 1:If a worker is eligible for the attraction allowance rate of 20% and has an average grade-based salary coefficient of 3.0, the attraction allowance coefficient shall be converted for using formula (1) as follows: 20% x 3.0 = 0.6.

6. Position allowance is paid to persons who are heads or deputy heads of departments (divisions). To be specific:

Notes:

- The position allowance for employees of corporations or equivalent-scale entities shall be applied when calculating the price of the public product or service the supplier of which is required to be ranked as a corporation or equivalent.

- The position allowance for employees of companies shall be applied when calculating prices of other public products or services.

7. The production instability coefficient shall not exceed 15% of the job rank or position-based salary and used in calculating the cost of labor of fundamental construction works with instability nature.

For using the production instability coefficient in formula (1) hereof, the production instability coefficient must be converted as follows:

Example 2: If a worker is eligible for the production instability coefficient of 10% and has an average grade-based salary coefficient of 3.0, the production instability coefficient shall be converted for using formula (1) as follows: 10% x 3.0 = 0.3.

IV.CORPORATE MANAGERS

Notes:

- The base salary for employees of corporations or equivalent-scale entities shall be applied when calculating the price of the public product or service the supplier of which is required to be ranked as a corporation or equivalent.

- The base salary for employees of companies shall be applied when calculating prices of other public products or services.

REPORT ON COST OF LABOR CONSTITUTING PRICES OF PUBLIC PRODUCTS AND SERVICES IN......................(YEAR)
(Enclosed with the Circular No. 17/2019/TT-BLDTBXH dated November 06, 2019 of the Ministry of Labor, War Invalids and Social Affairs)

Notes:

(1) MLth, Hcb Hpc, Hđc, TLcb, CĐăc, CĐk, BH are weighted averages for each group of workers as determined according to Article 4, Article 5 and Article 7 of the Circular No. 17/2019/TT-BLDTBXH.

(2) Place of application: Regions I, II, III and IV are those in which the minimum region-based wages are applied as prescribed by the Government in each period.If a company supplies a public product or service in multiple regions, the place of application shall be the region where that product or service is primarily supplied (E.g. Place of application of product A is region II).

(3) Names of public utility products and services shall conform to the list in Appendix II and names of public non-business services shall conform to the list in Table 02 of Appendix I enclosed with the Government's Decree No. 32/2019/ND-CP dated April 10, 2019.

REPORT ON COST OF LABOR CONSTITUTING PRICES OF PUBLIC PRODUCTS AND SERVICES IN......................(YEAR)
(Enclosed with the Circular No. 17/2019/TT-BLDTBXH dated November 06, 2019 of the Ministry of Labor, War Invalids and Social Affairs)

Notes:(1) MLth, Hcb, Hpc, Hđc, TLcb, CĐăc, CĐk, BH are weighted averages for each group of workers as determined according to Article 4, Article 5 and Article 7 of the Circular No. 17/2019/TT-BLDTBXH.

(2) Place of application: Regions I, II, III and IV are those in which the minimum region-based wages are applied as prescribed by the Government in each period.If a company supplies a public product or service in multiple regions, the place of application shall be the region where that product or service is primarily supplied (E.g. Place of application of product A is region II).

(3) Names of public utility products and services shall conform to the list in Appendix II and names of public non-business services shall conform to the list in Table 02 of Appendix I enclosed with the Government's Decree No. 32/2019/ND-CP dated April 10, 2019.