On 20/3/2015, the Ministry of Construction promulgated Circular No. 01/2015/TT-BXD providing guidance on determination of pay rates in the management of the construction cost (hereinafter referred to as Circular No. 01). Until now, more than 40 areas have received guiding documents on the determination of the unit labor cost in construction according to the guidance in Circular No. 01. The fact that the other areas have not received guiding documents causes difficulties in the implementation of the Circular of entities participating in the construction.

Recently, the Ministry of Construction has received reports of a number of enterprises/associations of a number of provinces on issues related to Circular No. 01. Thus, to implement Circular No. 01, the Ministry of Construction recommend People's Committees of central-affiliated cities and provinces to direct Services of Construction to preside over and carry out the following activities:

1. The People’s Committees of provinces that have not received documents providing guidance on implementation of Circular No. 01 shall direct Services of Construction to conduct investigation for determination and announcement of construction pay rates on local market as the basis for determination and management of local construction costs.

2. Provinces in which announced construction pay rates calculated according to the input wages in the Appendix of Circular No. 01 are unsuitable for construction labor cost on local market shall continue the investigation and make additional announcement, ensuring the construction cost is calculated accurately and sufficiently according to regulations in the Law on Construction No. 50/2014/QH13.

3. The People’s Committees of provinces have the responsibility to disseminate regulations of Circular No. 01, provide guidance and remind entities related to the management of local construction costs to comply with it. Relevant entities should notice that regulated entities and purposes of Circular No. 01 are different from regulated entities and purposes of Decree No. 103/2014/NĐ-CP dated 11/11/2014 by the Government on regional minimum wages applicable to employees working for enterprises, cooperatives, artels, farmhouses, households and individuals and agencies/organizations hiring employees under labor contract (Decree No. 103). To be specific:

- Regulated entities of Circular No. 01 are investors, consultants, regulatory bodies and entities relevant to the estimation and management of construction costs. The purpose of Circular No. 01 is to provide guidance on the determination of input wages for construction labor suitable for construction pay rates on the market according to regulations in Decree No. 112/2009/ND-CP dated 14/12/2009 and Decree No. 32/2015/NĐ-CP dated 25/3/2015 by the Government.

- Regulated entities of Decree No. 103 are agencies, organizations, enterprises, individuals, etc. hiring employees under contracts. The purpose of Decree No. 103 is to instruct employers and employees to negotiate about minimum wages on the basis of regional minimum wages according to regulations of the state (such minimum wages shall not multiply by the coefficient of hierarchy prescribed in Decree No. 205/2004/NĐ-CP to determine input construction pay rates).

People’s Committees of central-affiliated cities and provinces shall direct Services of Construction to implement the aforesaid guidance according to regulations./.

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