DECREE No. 203/2004/ND-CP OF DECEMBER 14, 2004 PRESCRIBING THE MINIMUM WAGE LEVEL

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the June 23, 1994 Labor Code and the April 2, 2002 Law Amending and Supplementing a Number of Articles of the Labor Code;

Pursuant to the XIth National Assembly’s Resolution No. 17/2003/QH11 of November 4, 2003 on the 2004 State budget estimates and Resolution No. 19/2003/QH11 of November 16, 2003 on the 2004 tasks;

At the proposal of the Minister of Labor, War Invalids and Social Affairs,

DECREES:

Article 1.-

1. To prescribe a common minimum wage level for payment of remunerations to laborers doing the simplest jobs under normal working conditions.

2. The common minimum wage level is VND 290,000/month.

The common minimum wage level shall be readjusted, depending on the economic growth, cost-of-living price indexes and labor supply-demand in each period.

Article 2.-

1. The common minimum wage level prescribed in this Decree serves as basis for calculating wage levels in the system of wage scales, wage tables and wage-allowance levels for the State sector; calculating wage levels inscribed in labor contracts by enterprises which build wage scales and wage tables under the provisions of labor legislation; and for applying a number of other regimes to laborers according to law provisions.

2. The common minimum wage level prescribed in this Decree applies to:

a/ State agencies, non-business units, armed forces, political organizations and socio-political organizations;

b/ Companies operating under the State Enterprise Law, including State companies, independent cost-accounting member companies of corporations with  investment and establishment being decided by the State;

c/ Companies and enterprises operating under the Enterprise Law;

d/ Cooperatives, cooperative teams, farms, households, individuals and other organizations that hire laborers.

3. The common minimum wage level prescribed in Clause 2, Article 1 of this Decree is also used for the calculation of severance allowances paid to redundant laborers for the number of their working years as from 2003 according to the Government’s Decree No. 41/2002/ND-CP of April 11, 2002 on policies towards laborers redundant from reorganization of State enterprises and Decree No. 155/2004/ND-CP of August 10, 2004 amending and supplementing Decree No. 41/2002/ND-CP, and to those who discontinue working due to payroll streamlining under the Government’s Resolution No. 16/2000/NQ-CP of October 18, 2000 on streamlining payrolls in administrative agencies and non-business units; Resolution No. 09/2003/NQ-CP of July 28, 2003 amending and supplementing Resolution No. 16/2000/NQ-CP (the number of working years from 2002 backwards shall be calculated under the guidance issued before January 1, 2003).

Article 3.-

1. The adjustment co-efficient of increase over the common minimum wage level, applicable to State agencies, non-business units, armed forces, political organizations and socio-political organizations, shall comply with the Government’s regulations, depending on the State budget capability and wage-paying sources.

2. The adjustment co-efficient of increase over the common minimum wage level for the calculation of wage unit prices, applicable to companies operating under the State Enterprise Law, shall comply with the Government’s regulations, depending on the labor productivity and production/business efficiency.

The increase adjustment co-efficients prescribed in Clauses 1 and 2 of this Article shall not be used for the calculation for payment of social insurance or medical insurance premiums and enjoyment of social insurance or medical insurance regimes, or for the application of several other regimes according to law provisions.

3. Companies and enterprises operating under the Enterprise Law; cooperatives, cooperative teams, farms, households, individuals and other organizations that hire laborers may set a minimum wage level higher than the common minimum wage level prescribed in this Decree.

Article 4.-

1. The Ministry of Labor, War Invalids and Social Affairs shall, after consulting Vietnam Labor Confederation, employers’ representatives and concerned ministries and branches, submit to the Government for promulgation the common minimum wage level in each period, the adjustment co-efficient of increase over the common minimum wage level, applicable to companies operating under the State Enterprise Law.

2. The Ministry of Home Affairs shall assume the prime responsibility for, and coordinate with the Ministry of Finance and concerned ministries and branches in, submitting to the Government for stipulation the adjustment co-efficient of increase over the common minimum wage level, applicable to State agencies, non-business units, armed forces, political organizations and socio-political organizations.

Article 5.-

1. This Decree takes effect 15 days after its publication in the Official Gazette.

2. The provisions of this Decree apply as from October 1, 2004.

3. To annul Clause 1 of Article 1, Clause 2 of Article 4 and Clause 2 of Article 6, of the Government’s Decree No. 03/2003/ND-CP of January 15, 2003 on adjusting wages and social allowances, and renewing for one step the wage management mechanism.

4. For Vietnamese laborers working in foreign-invested enterprises in Vietnam, the minimum wage level prescribed in the Prime Minister’s Decision No. 53/1999/QD-TTg of March 26, 1999 on a number of measures to encourage foreign direct investment shall still apply.

Article 6.- The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies and the presidents of the provincial/municipal People’s Committees shall have to implement this Decree.

On behalf of the Government
Prime Minister
PHAN VAN KHAI