DECREE

OF THE GOVERNMENT\r\nNO. 03/2003/ND-CP DATED JANUARY 15, 2003 ON ADJUSTMENT OF WAGES, SOCIAL\r\nSUBSIDIES AND ONE-STEP INNOVATION OF WAGE MANAGEMENT MECHANISM

THE GOVERNMENT

Pursuant to the Law on Government\r\nOrganization dated December 25, 2001;
\r\nPursuant to the Labor Code dated June 23, 1994 and the Law on amendments to the\r\nLabor Code dated April 2, 2002;
\r\nPursuant to the Resolution of the 11th National Assembly in the second session:\r\nResolution No. 09/2002/QH11 dated November 28, 2002 "on the state budget\r\nestimate of 2003" and Resolution No. 14/2002/QH11 December 16, 2002\r\n"on the mission of 2003";
\r\nAt the request of the Minister of Home Affairs, the Minister of Labor, War\r\nInvalids and Social Affairs and the Minister of Finance,

HEREBY DECREES:

Article 1. From January 1, 2003, adjust\r\nthe minimum wages, subsidies and subsistence allowances for the entities on\r\nwages, allowances, subsidies and subsistence allowances as follows:

1. Raise the minimum wage\r\nfrom VND 210,000/month as prescribed in Decree No. 77/2000/ND-CP dated December\r\n15, 2000 of the Government to VND 290,000/month applicable to wage and\r\nallowance earners from the state budget and employees in enterprises (except\r\nforeign-invested enterprises in Vietnam).

2. Raise the monthly\r\nsubsistence allowance for commune, ward and township officials who are working\r\nand retired as prescribed in Decree No. 77/2000/ND-CP dated December 15, 2000\r\nof the Government corresponding to an increase in the minimum wage from VND\r\n210,000/month to VND 290,000/month.

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a) Increase by 46% of pensions for retirees\r\naccording to the Government's Decree No. 218/CP dated December 27, 1961, the\r\nGovernment's Decree No. 161/CP dated October 30, 1964 and amendments\r\npromulgated before September 18, 1985.

b) Increase by 42% of pensions for retirees\r\naccording to Decree No. 236/HDBT dated September 18, 1985 of the Council of\r\nCabinet (now the Government).

c) Increase by 38.1% of pensions for retirees\r\naccording to Decree No. 43/CP dated June 22, 1993, Decree No. 66/CP dated\r\nSeptember 30, 1993, Decree No. 12/CP dated January 26, 1995 and Decree No.\r\n45/CP dated July 15, 1995 of the Government.

d) Increase by 38.1% of work-capacity loss\r\nallowance, and social insurance subsidies for those receiving social insurance\r\nsubsidies.

4. Increase by 38.1% of\r\nthe allowance fund for people with meritorious services compared to the current\r\nfund (eligible entities of 2003) according to the provisions of Decree No.\r\n77/2000/ND-CP dated December 15, 2000 of the Government.

Article 2. Budget allocation in 2003 to\r\nensure the source of funds for adjustment of wages and social subsidies:

1. Ministries, central agencies and local\r\ngovernments must, regarding budget allocation, request each administration\r\nauthority, each public sector entity to set aside 10% of funding for recurrent\r\nexpenditures (except wages and wage-like amounts) to make wage adjustments.

2. Revenue-generating\r\npublic sector entities (including those that have implemented the financial\r\nmechanism under the Government's Decree No. 10/2002/ND-CP dated January 16,\r\n2002) must set aside at least 40% of the retained revenue source (at least 35%\r\nfor the health sector alone) to make wage adjustments.

3. Administration authority with prescribed\r\nrevenue sources shall set aside at least 40% of the revenue sources in\r\naccordance with the regime to make wage adjustments.

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5. The Ministry of Finance shall arrange the\r\ncentral budget to ensure the payment of pensions to those who retire before\r\nJanuary 1, 1995 (those who retire from January 1, 1995 or later will be paid by\r\nthe Social Security); ensure the payment of subsidies to people with\r\nmeritorious services; propose the Prime Minister to decide additional sources\r\nof funds for ministries, central authorities and local governments in case Clauses\r\n1, 2, 3 and 4 of this Article have been strictly followed, but they are still\r\nunderfunded.

Article 3. Implementation of new\r\nregulations on payroll, wages and income management for administration\r\nauthorities and public sector entities as follows:

1. The regulatory bodies, administrative\r\nagencies of the Party and mass organizations shall expand implementation of\r\nfixed payroll and administrative management according to the provisions of\r\nDecision No. 192/2001/QD-TTg dated December 17, 2001 of the Prime Minister; and\r\nalso cut down of personnel on payroll according to Resolution No. 16\r\n/2000/NQ-CP dated October 18, 2000 of the Government.

2. The public sector entities shall exercise\r\ntheir autonomy in organizing the performance of tasks, using payrolls and paying\r\nsalaries to their officials and public employees according to applicable\r\nregulations.

Article 4.

1. The Ministry of Home\r\nAffairs shall take charge and coordinate with concerned ministries and central\r\nauthorities in:

a) Guiding the adjustment of the minimum wages\r\nand subsistence allowances for the earners of wages, allowances and subsistence\r\nallowances under the state budget specified in Clauses 1 and 2, Article 1 of\r\nthis Decree.

b) Guiding the management of payroll and wage\r\npayment to administration authorities specified in Clause 1, Article 3 of this\r\nDecree.

c) Guiding the implementation of the autonomy\r\nmechanism on task performance, payroll use and wage payment for public sector\r\nentities specified in Clause 2, Article 3 of this Decree.

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a) Guiding the adjustment of the minimum wages\r\nfor enterprises specified in Clause 1, Article 1 of this Decree.

b) Guiding the adjustment of pensions, social\r\nsubsidies and allowances for people with meritorious services specified in\r\nClauses 3 and 4, Article 1 of this Decree.

3. The Ministry of Finance\r\nshall take charge and coordinate with concerned ministries and central authorities\r\nin:

a) Guiding assurance of sources for adjustment\r\nof wages and social subsidies specified in Article 2 of this Decree.

b) After receiving the Prime Minister's\r\ndecision, allocating extra funds to underfunded sources to pay the increased\r\nwage in the ministries, central authorities and local governments specified in\r\nClause 5, Article 2 of this Decree.

c) Inspecting and urging ministries, central\r\nauthorities and local governments to take measures to ensure the source of\r\nadditional wage payment specified in Clauses 1, 2, 3 and 4, Article 2 of this\r\nDecree.

4. The Ministry of\r\nEducation and Training shall take charge and coordinate with concerned\r\nministries and central authorities in:

a) Proposing the Prime Minister to promulgate a\r\nDecision replacing Decision No. 70/1998/QD-TTg dated March 31, 1998 of the\r\nPrime Minister on the collection and use of tuition fees of public educational\r\nand training institutions under the national education system, in order to\r\nimplement Clause 2, Article 2 of this Decree from January 1, 2003.

b) Implementing the Government's Decree No.\r\n10/2002/ND-CP dated January 16, 2002 for educational and training institutions\r\nand revenue-generating public sector entities under their management.

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a) Proposing the Government to promulgate a\r\nDecree replacing Decree No. 95/CP dated August 27, 1994 of the Government on\r\npartial collection of hospital charges and Decree No. 33/CP dated May 23, 1995\r\nof the Government on the amendment of Clause 1, Article 6 of Decree No. 95/CP,\r\nto implement Clause 2, Article 2 of this Decree from January 1, 2003.

b) Implementing the Government's Decree No.\r\n10/2002/ND-CP dated January 16, 2002 for medical examination and treatment\r\nestablishments and revenue-generating public sector entities under their\r\nmanagement.

6. Ministries and\r\nministerial-level agencies are responsible for:

a) Amending or proposing the Government or the\r\nPrime Minister to amend the regime of collection, distribution and use of\r\nrevenues, charges and fees within their competence, in order to implement\r\nClauses 2 and 3 Article 2 of this Decree from January 1, 2003.

b) Implementing the Government's Decree No.\r\n10/2002/ND-CP dated January 16, 2002 for revenue-generating public sector\r\nentities under their management.

7. Documents of ministries and ministerial-level\r\nagencies that provide guidelines for this Decree (stated in Clauses 1, 2 and 3\r\nof this Article) and documents submitted to the Government or Prime Minister\r\nfor amendments (mentioned in Point a of Clauses 4, 5 and 6 of this Article)\r\nmust be promulgated in the first quarter of 2003.

8. People's Committees of\r\nprovinces and centrally affiliated cities are responsible for:

a) Implementing measures to secure sources for\r\nadjustment of wages and social subsidies according to Clauses 1, 2, 3 and 4,\r\nArticle 2 of this Decree.

b) Implementing the Government's Decree No.\r\n10/2002/ND-CP dated January 16, 2002 for revenue-generating public sector\r\nentities under their management.

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Article 6.

1. This Decree comes into force 15 days after\r\nits publication in the Official Gazette.

2. The wage adjustment\r\namount specified in Clause 1, Article 1 of this Decree is used to calculate the\r\nseverance e for redundant employees according to Decree No. 41/2002/ND-CP dated\r\nApril 11, 2002 by the Government and for those who quit their jobs due to\r\npayroll downsizing according to Resolution No. 16/2000/NQ-CP dated October 18,\r\n2000 of the Government for the number of working years since 2003, number of\r\nworking years from 2002 and earlier calculated according to the guidance before\r\nJanuary 1, 2003.

Regulations on calculation of severance pay e\r\nfor redundant employees in this Decree replace the provisions on calculation of\r\nseverance pay for redundant employees and employees who quit their jobs due to\r\npayroll downsizing specified in Decree No. 41/ 2002/ND-CP dated April 11, 2002\r\nof the Government and Resolution No. 16/2000/NQ-CP dated October 18, 2000 of\r\nthe Government.

3. Deductions and entitlements based on wages or\r\nsubsistence allowances as prescribed by the State shall be recalculated\r\ncorresponding to the adjustment of the minimum wages and subsistence allowances\r\nspecified in this Decree.

Article 7. The ministers, the heads of\r\nthe ministerial-level agencies, the heads of Governmental agencies, the\r\npresidents of the People's Committees of the provinces and centrally-affiliated\r\ncities shall implement this Decree.

Phan Van\r\n Khai

(Signed)

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