New regulations on corporate wages take effect from November 2018

The Government has just issued Decree 121/2018/ND-CP amending and supplementing a number of articles of Decree No. 49/2013/ND-CP dated May 14, 2013 of the Government detailing the implementation of a number of articles of the Labor Code on wages.

Regarding the principles of establishing labor norms, the Decree clearly states: Enterprises establish labor norms as a basis for paying wages to employees receiving wages based on products, ensuring the following principles:

Labor norms are implemented for each step of work, each stage and the entire process of producing products and services on the basis of scientific labor organization and reasonable production organization.

Labor standards are built on the basis of job or position levels, in accordance with the level, training level of the employee, technological process,Technical standards of machinery and equipment and ensuring labor standards.

The labor level must be an advanced average level, ensuring that the majority of workers can achieve it without having to extend the standard working hours of the enterprise as prescribed by law.

New labor standards must be applied on a trial basis before being officially issued. Enterprises must notify employees at least 15 days before applying the trial. The trial period depends on the nature of the work, but must not exceed 3 months and the implementation of the standards must be evaluated.

In case during standard working time, the actual performance level calculated by output is 5% lower or 10% higher than the assigned level, or the actual performance level calculated by time is 5% higher or 10% lower than the assigned level, the enterprise must readjust the labor level.

Labor standards must be periodically reviewed and evaluated for appropriate amendments, supplements, and adjustments. When establishing or amending, supplementing, or adjusting labor standards, enterprises must consult with the organization representing the collective of employees at the enterprise and publicly announce them at the workplace of the employees before implementation, and at the same time send them to the state labor management agency at the district level where the enterprise's production facility is located.

The Decree also adds regulations on the responsibility of organizing the implementation of the construction of salary scales, payrolls and labor norms in cases where enterprises employ less than 10 employees.

Accordingly, enterprises shall develop or review, amend and supplement salary scales, payrolls, and labor norms and send them to the district-level state labor management agency where the enterprise's production and business establishments are located for monitoring and inspection according to the provisions of this Decree.

Enterprises employing less than 10 employees are exempted from the procedure of submitting salary scales, payrolls, and labor norms to the state labor management agency at the district level where the enterprise's production and business establishments are located.

The Decree takes effect from November 1, 2018./.