Wednesday,  Nov 21, 2018,02:20 (GMT+7) 0 0
Firms may be given payroll autonomy: deputy minister
By Thuy Dung
Friday,  Aug 10, 2018,20:11 (GMT+7)

Firms may be given payroll autonomy: deputy minister

By Thuy Dung

A dialogue between Korean enterprises and the Vietnamese Ministry of Labor, Invalids and Social Affairs - PHOTO: THUY DUNG

HANOI – The Labor Code will be amended to allow enterprises, including State-owned ones, to choose their payroll systems, said Doan Mau Diep, deputy minister of Labor, Invalids and Social Affairs.

At a dialogue between Korean enterprises and the Vietnamese Ministry of Labor, Invalids and Social Affairs, held in Hanoi on August 9, Diep said the State will gradually reduce its intervention in the payroll policies of enterprises. Employees’ salaries will be determined based on negotiations with their employers, in line with market forces, he added.

Under the current regulations, the difference between two consecutive wage grades must be at least 5%, while the lowest wage grade applicable to laborers doing jobs that require training must be at least 7% higher than the region-based minimum wage. In addition, the wage level applicable to hazardous and dangerous jobs must be at least 5-7% higher than that of laborers working under normal conditions.

At the dialogue, Mai Duc Thien, deputy director of the Department of Legal Affairs under the Ministry of Labor, Invalids and Social Affairs, said that the draft of the amended Labor Code includes new regulations on salary calculation.

A region-based minimum wage will ensure minimum living standards for workers and their families, based on relevant factors such as the state of the labor market and socioeconomic development progress.

According to the Korean representatives, the annual overtime work limit of 200 hours, and in special cases, 300 hours, is much lower than in other regional countries, such as Thailand and Singapore. They proposed increasing the maximum number of overtime hours to 600 annually.

Thien agreed with the representatives. He, however, pointed out that the overtime working hours combined with the normal working hours of an employee are not low compared with Indonesia, Thailand and Singapore.

In the draft Labor Code, the Ministry of Labor, Invalids and Social Affairs has suggested an annual overtime work limit of 400 hours.

The draft is expected to be considered in May next year and approved in October.

South Korea is currently one of the largest investors in Vietnam. In addition to sectors that need large numbers of workers, Korean enterprises have invested in high-value-added sectors, including electronics, finance-banking and real estate.

They have recruited more than one million Vietnamese employees. As such, the local salary and social insurance policies will have a significant impact on their operations in Vietnam.

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