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Viet Nam - Minimum Wages - 2011


LAST UPDATE

29 August 2011

SOURCES


Name of Act

Decree No. 108/2010 prescribing region-based minimum wage levels for laborers working for Vietnamese companies, enterprises, cooperatives, cooperative groups, farms, households and individuals and other organizations employing laborers, dated 29 October 2010 (effective 1 January and 1 July 2011, according to locality). Published on Asemconnectvietnam at http://asemconnectvietnam.gov.vn/lawdetail.aspx?lawid=406 and accessed 17 August 2011.

Name of Act

Labour Code dated 23 June 1994, as amended to 2 April 2002 (effective 1 January 2003), [Law 35-2002-QH10]. Law amending and supplementing a number of articles of the Labour Code dated 29 November 2006 (effective 1 July 2007) also attached. Published by the Ministry of Labour - Invalids and Social Affairs at http://english.molisa.gov.vn and accessed 15 August 2011.
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Name of Act

Decree No. 114-2002-ND-CP, providing detailed regulations and guidelines on implementation of a number of articles of the Labour Code with respect to wages, dated 31 December 2002, (No. 114-2002-ND-CP); Foreign Investment Laws of Vietnam. 2002-12-31. No. 4, pp. IV/1113-IV/1122. Published by the Ministry of Labour - Invalids and Social Affairs at http://english.molisa.gov.vn and accessed 15 August 2011.

Name of Act

Decree No. 47/2010 on administrative sanctioning of violations of the Labour Code, dated 6 May 2010 (effective 25 July 2010). Published by the Ministry of Labour - Invalids and Social Affairs at http://english.molisa.gov.vn and accessed 15 August 2011.

Name of Act

Decree No. 22/2011 providing for the common minimum wage dated 4 April 2011 (effective 19 May 2011). Published by the Ministry of Labour - Invalids and Social Affairs at http://english.molisa.gov.vn and accessed 15 August 2011.

Name of Act

Decree No. 107/2010 stipulating region-based minimum wage levels for Vietnamese labourers working for foreign-invested enterprises, foreign agencies and organizations and international organizations and for foreigners in Vietnam, dated 29 October 2010 (effective 1 January and 1 July 2011, according to region). Published by the Ministry of Labour - Invalids and Social Affairs at http://english.molisa.gov.vn and accessed 15 August 2011.

LEGAL DEFINITIONS


Employee/worker

Employee shall mean a person of at least 15 years of age who is able to work and has entered into a labour contract.
Labour Code 1994 §6
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Employer

An employer is an enterprise, body or organization, or an individual who is at least 18 years of age, recruiting, employing and paying wages to an employee.
Labour Code 1994 §6

Minimum wage

The minimum wage is that set by the Government in accordance with §§56 and 132(3) of the Labour Code. It is to apply only to workers in the most basic job with normal working conditions. The Labour Code and relevant decrees require the wage for all other positions to be higher than the minimum wage. The minimum wage rates for positions other than the most basic job with normal conditions are to be calculated on the basis of the minimum wage and in accordance with wage scales and payrolls, the principles of which shall be set by the Government following consultation with social partners.
Labour Code 1994 §§56, 132(6)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §5(d)

MINIMUM WAGE FIXING


Procedure

The minimum wage, and the principles to be followed when using it to calculate wage rates for higher positions, are set by the Government following consultation with the social partners. The minimum wage as set by the Government is to be applied only to workers in the most basic job with normal working conditions, but also to provide the basis of calculating the wages for workers in other positions in accordance with principles set by the Government following consultation with the social partners.
Labour Code 1994 Chapter VI
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code

Procedure in general

Subject to consultation with the Vietnam General Confederation of Labour and representatives of employers, the Government shall determine and promulgate from time to time a general minimum wage, a minimum wage for each region, and a minimum wage for each industry.
Labour Code 1994 §56

Government decides after consultation of the social partners

Subject to consultation with the Vietnam General Confederation of Labour and representatives of employers, the Government shall:
(1) determine and promulgate from time to time:
(a) a general minimum wage,
(b) a minimum wage for each region, and
(c) a minimum wage for each industry (§56 Labour Code);
(2) determine and declare the minimum wage which applies to Vietnamese employees working in enterprises established in accordance with the Law on Foreign Investment in Vietnam, enterprises in export processing zones, foreign or international bodies and organizations operating in Vietnam, or working for foreign individuals in Vietnam (§132 Labour Code);
(3) stipulate the principles for formulation of wage scales, wage tables and labour rates for the employer to formulate and apply same in accordance with the production and business conditions of the enterprise (§57 Labour Code); and
(4) stipulate a wage scale and a wage table for State owned enterprises (§57 Labour Code).

As at August 2011, the Government has set the following:
(1)(a) a common minimum wages, payable to workers in all State-owned enterprises (Decree No. 22/2011), and
(1)(b) region-based minimum wages, payable to labourers in Vietnamese enterprises, according to locality (Decree No. 108/2010, but see also §7(3) of Decree No. 22/2011);
(2) region-based minimum wage levels, payable to Vietnamese laborers doing simplest jobs under normal working conditions at foreign-invested enterprises, foreign agencies and organizations and international organizations and to foreigners in Vietnam (Decree No. 107/2010);
(3) principles for formulation of wage scales, wage tables and labour rates (Decree No. 114/2002, see also Decrees No. 22/2011, 108/2010 and 107/2010).

The minimum wage is to be applied to employees in the most basic job with normal working conditions, and used as the basis for calculating the wages for other types of jobs in accordance with wage scales and payrolls.

Decree No. 114/2002 stipulates that wage scales and payrolls are to be formulated by employers, following consultation with grassroots Trade Union Executive Committees, in accordance with the following principles:
a/ The wage scale and payroll shall be formulated for laborers involved in managerial, professional or technical work and workers directly involved in production and business activities according to their jobs and occupations in which they are trained ;
b/ The multiple of the wage scale and payroll is the coefficient of the highest wage level for laborers with the highest managerial, technical or professional qualifications as compared to the laborers with the lowest qualifications;
c/ The number of grades of the wage scale and payroll depends on the complexity of the management and work requirements. The gap between the consecutive wage grades must ensure encouragement to raise the technical and professional qualifications as well as talents and experience accumulation;
d/ The grade 1 of the wage scale and payroll must be higher than the minimum wage level prescribed by the State. The wage level applicable to hazardous and dangerous as well as specially hazardous and dangerous occupations or jobs must be higher than that applicable to occupations or jobs with normal labor conditions.

An enterprise’ wage scale and payroll is to be announced publicly in the relevant enterprise or agency and registered with the State management agencies in charge of labour in the provinces or centrally-run cities where the enterprises or agencies are headquartered. It shall serve as the basis for:
1. Reaching agreement on wages upon the conclusion of labor contracts;
2. Determining the wage unit price, implementing the regime of raising wage levels as agreed upon in labor contracts and collective labor agreements;
3. Paying social and health insurance premiums and enjoying social and health insurance regimes under law provisions;
4. Paying job-termination wages and other entitlements under the provisions of the labor legislation;
5. Handling other interests under the two parties agreement and provisions of the labor legislation.
Labour Code 1994 §§56, 57, 132(3)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §§4, 5, 6
Decree No. 22/2011 - Providing for the Common Minimum Wage
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers
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Criteria

Some principles of review are stipulated by the Labour Code and Decree 114/2002.
Labour Code 1994
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code

Cost of living

The minimum wage is set on the basis of the cost of living of an employee.
Labour Code 1994 §56

Economic development

The minimum wage is to be defined (in part) on the basis of economic capability.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §4
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Level of employment

The minimum wage rate is to be defined (in part) on the basis of the labor supply and demand.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §4

Capacity of employers to pay

The minimum wage is to be defined (in part) on the basis of economic capability.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §4
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Inflation rate

The minimum wage is to be defined (in part) on the basis of the cost-of-living index in each period. When the price index increases, resulting in the reduction of the real wages of employees, the Government shall adjust the minimum wage to ensure the real wages.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §4
Labour Code 1994 §56

Other provisions

Labour supply and demand, and economic capacity must be considered. Provision must also be made for the employee to make contributions towards savings.
Labour Code 1994 §56
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code

Coverage

The minimum wage provisions of the Labour Code apply to all employees and employers in all sectors of the economy and in all forms of ownership.
Labour Code 1994

Scope

The minimum wage provisions of the Labour Code apply to all employees, defined as a person of at least 15 years of age who is able to work and has entered into a labour contract, in any sector of the economy and in any form of ownership. Decree 114/2002 further articulates the scope of the minimum wage provisions as including:
1. Enterprises set up and operating under the State Enterprise Law;
2. Enterprises set up and operating under the Enterprise Law;
3. Enterprises set up and operating under the Law on Foreign Investment in Vietnam;
4. Enterprises of political organizations and socio-political organizations;
5. Non-business units operating according to the economic cost-accounting regime;
6. Cooperatives, farms, households and individuals that employ laborers;
7. Foreign or international agencies and organizations based on the Vietnamese territory and employing Vietnamese laborers, except otherwise provided for by international agreements to which the Socialist Republic of Vietnam has signed or acceded.
Labour Code 1994 §§2, 6, 55, 56, 132(3)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §2
Decree No. 22/2011 - Providing for the Common Minimum Wage §2
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies §1, Appendices I and II
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers §§1, 2, Appendices I and II
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Excluded categories

Four categories of exclusions are stipulated.
Labour Code 1994 §4
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §3

» Workers

Members of cooperatives operating under the Cooperative Law are not covered by the minimum wage provisions of the Labour Code.
Labour Code 1994 §4
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §3(3)

» Sectors

Workers covered by the Public Employees Ordinance are excluded from the minimum wage provisions of the Labour Code.
Labour Code 1994 §4
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §3(1)

» Occupations

People belonging to political organizations or socio-political organizations operating under the regulations of such organizations are not covered by the minimum wage provisions of the Labour Code.
Labour Code 1994 §4
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §3(2)

» Other Provisions

Officers, non-commissioned officers, soldiers, professional armymen and non-contractual employees in the armed forces are not covered by the minimum wage provisions of the Labour Code.
Labour Code 1994 §4
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §3(4)

Specific minimum wage rates


» Specific minimum wage by occupation

The wage rates for different occupations are to be set in accordance with the wage scales and payrolls, based on the applicable minimum wage set by the Government.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §5

» Specific minimum wage by sector

Industry-based minimum wage rates, as contemplated by §56 of the Labour Code, have not been identified. While the common minimum wage set by Decree No. 22/2011 applies only to workers in State and State-owned operations and the private sector is covered by Decrees 107 and 108 of 2010, the rates prescribed do not distinguish between the different industries covered by these Decrees.
Labour Code 1994 §56
Decree No. 22/2011 - Providing for the Common Minimum Wage §2
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers

» Specific minimum wage by region

The minimum wages set by Decrees 107/2010 (for employees of foreign-owned or invested companies and international organisations and foreign employees) and 108/2010 (for employees of Vietnamese companies, cooperatives etc) are set by region.
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers §§1, 2, Appendices I and II
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies §§1, 2, Appendices I and II

» Minimum wage levels for specific categories of workers


» Youth

No - Workers between the ages of 15 and 18 must receive the same wage as adult employees when performing the same job.
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §19

» Disabled

No - Disabled workers are entitled to the same wages as ordinary employees when performing the same job.
Labour Code 1994 §19

» Piece-rate workers

No specific minimum wage rate foreseen. Legislation provides that employees may be paid wages according to the number of items produced.
Labour Code 1994 §58(1)

» Other categories

Employees on a trial period must receive at least 70% of the applicable wage rate for the relevant rank of the job. Apprentices and trainees who manufacture a product must also receive at least 70% of the applicable wage rate for an employee performing the same job.

The lowest regional wage level paid to workers who have received vocational training must be at least 7% higher than the region-based minimum wage levels.
Labour Code 1994 §32
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §17
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies

Level

The minimum wage rates vary according to the location and nature of the employer.
Labour Code 1994
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies
Decree No. 22/2011 - Providing for the Common Minimum Wage

Minimum wage level(s) in national currency

For state employees, the minimum wage rate is VND 830,000/month.

For employees of Vietnamese companies, cooperatives etc, the minimum wage rates range from VND 830,000/month to VND 1,350,000/month, depending on locality.

For employees of foreign-owned companies and international organizations, and for foreign workers, the minimum wage rates range from VND 1,100.000/month to VND 1,550,000/month, depending on locality.
Decree No. 22/2011 - Providing for the Common Minimum Wage §1
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies §2
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers §1

Last minimum wage update

For state employees, the minimum wage rate adjustment was effective on 1 May 2011.

For employees of Vietnamese companies, cooperatives etc, the minimum wage rate adjustment was effective on either 1 January 2011 or 1 July 2011, depending on locality.

For employees of foreign-owned companies and international organizations, and for foreign workers, minimum wage rate adjustment was effective on either 1 January 2011 or 1 July 2011, depending on locality.
Decree No. 22/2011 - Providing for the Common Minimum Wage §1
Decree No. 108/2010 - Prescribing regional minimum wage levels for Vietnamese companies §6(1)
Decree No. 107/2010 - Regional Minimum Wage Levels for Foreign Enterprises and Foreign Workers §5(1)

In-kind allowances

No provisions on in-kind allowances identified. The Labour Code stipulates that payment of wages shall be made by way of cash, although both parties may agree on payment in part by cheque or State currency note provided that the employee does not suffer any loss or inconvenience.
Labour Code 1994 §59(2)

Rate of payment

An employer shall have the right to select the method of payment of wages, calculated by reference to time (hours, days, weeks, or months), or on the basis of a product produced or a completed piece of work, provided that the selected method is applied for a fixed period of time and the employee is notified of the method.
Labour Code 1994 §58(1)

» Hourly

An employee whose wage is calculated by reference to hours shall be paid at the end of the hour, or such period as agreed by the parties, provided that at least one payment of wage is made every fifteen (15) days.

The hourly wage shall be determined on the basis of the daily wage divided for the standard number of working hours as prescribed in Article 68 of the Labor Code.
Labour Code 1994 §58(2)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §7(1)(d)
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» Daily

An employee whose wage is calculated by reference to days shall be paid at the end of the day, or such period as agreed by the parties, provided that at least one payment of wage is made every fifteen (15) days.

The daily wage shall be determined on the basis of the monthly wage divided for the standard number of working days in the month as prescribed by law and selected by the concerned enterprises or agencies, which, however, must not exceed 26 days.
Labour Code 1994 §58(2)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §7(1)(c)

» Weekly

An employee whose wage is calculated by reference to weeks shall be paid at the end of the week, or such period as agreed by the parties, provided that at least one payment of wage is made every fifteen (15) days.

The weekly wage is to be determined on the basis of the monthly wage multiplied by 12 months and divided for 52 weeks.
Labour Code 1994 §58(2)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §7(1)(b)

» Monthly

An employee whose wage is calculated by reference to months shall be paid monthly or half-monthly.

The monthly wage shall be paid for a working month, determined on the basis of labor contracts.
Labour Code 1994 §58(3)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §7(1)(a)

» Other

An employee whose wage is calculated on the basis of a product produced or a completed piece of work shall be paid in accordance with the agreement reached between the two parties. Where the work to be performed is carried out over many months, the employee shall be entitled to monthly payments in advance calculated on the amount of work performed within the month.

The piecework wage shall be paid to laborers on the basis of the quantity and quality of their products. The package wage shall be paid to laborers according to the volume and quality of the work, which they must complete.
Labour Code 1994 §58(3)
Decree No.114/2002 - Guidelines on Wages Provisions of Labour Code §7(2), (3)

Specific provisions

An employee shall be entitled to receive his wage directly, in full, in a timely manner, and at the place of work. In special cases of late payment of wages, the employer must settle the outstanding wage within one month and pay to the employee compensation equal to at least the interest earned on the amount due calculated by reference to the interest rate of saving deposits published by the State Bank at the time when the wage is paid.

An employee shall have the right to be aware of the reasons for any deductions made from his wages. Prior to making any deduction, the employer must discuss with the executive committee of the trade union of the enterprise. Where there are deductions, the aggregate amount deducted must not exceed thirty (30) per cent of the monthly wage. An employer is prohibited from imposing fines and penalties by way of deductions from wages of employees.

Based on the annual production and business results of an enterprise and the performance of employees, the employer shall pay bonuses to employees working for the enterprise. The regulations on bonuses shall be decided by the employer after consulting the executive committee of the trade union of the enterprise.
Labour Code 1994 §§59, 60, 64

Scheduled frequency of adjustment

The legislation does not set specific time periods for adjustment of minimum wage rate, instead giving the ministry the discretion to vary rates from time to time. However, adjustments must be made to minimum wage rate levels when the CPI increases.
Labour Code 1994 §56
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Enforcement mechanisms

The labour inspectorate’s investigative powers and the types of available penalties are set out in the Labour Code, while Decree No. 47/2010 stipulates the potential fines and remedial action.
Labour Code 1994 Chapter XVI
Decree No. 47/2010 - Administrative Sanctioning of Violations of the Labour Code §10

Labour inspection

State labour inspectors shall have the following main duties:
1. To inspect compliance with provisions on labour, occupational safety, and labour hygiene;
2. To investigate work-related accidents and other violations of labour hygiene standards;
3. To participate in the establishment and guidance for application of the systems of standards, procedures and measures for occupational safety and labour hygiene;
4. To resolve any complaints or claims relating to labour in accordance with the provisions of the law;
5. To deal with breaches of labour laws in accordance with their delegated authority or make recommendations to other competent bodies to deal with.

When conducting an inspection, a labour inspector shall have the power to:
1. Inspect and investigate any enterprise within his area and scope of responsibility at any time without having to give advance notice;
2. Request the employer and other persons concerned to provide information and relevant documents which relate to the inspection or investigation;
3. Receive and resolve all comp laints or claims relating to breaches of labour laws in accordance with the provisions of the law;
4. Make decisions on temporary suspension of the usage of machinery, equipment, or work places where there is an occupational safety danger or a serious case of labour environmental pollution. The labour inspector shall be responsible for his decision and shall report immediately to a competent State body.
Labour Code 1994 §§186, 187

Fines in national currency for non-respect of legislation

Caution or a fine of between VND 300.000 and VND 3.000.000 shall be imposed on employers that commit any of the following acts:
a/ Failing to observe principles of formulation of wage scales, wage tables and labor norms under law;
b/ Deducting salaries of employees without discussing such with the Executive or Provisional (if any) Committee of the grassroots trade union.

A fine of between VND 2.000.000 and VND 10.000.000 shall be imposed on employers that commit any of the following acts:
a/ Failing lo pay salaries fully and on time to employees: paying salaries late without making compensations;
b/ Failing lo pay salaries to employees during the time the employees are off to receive treatment due to labor accidents or occupational diseases;
c/ Failing to register wage scales and wage tables with provincial-level labor state management agencies; failing to publicize wage scales, wage tables, labor norms and bonus regulations in enterprises.

Employers that commit any of the following acts:
(1) deducting salaries of employees without notifying them of the reason or deducting over 30% of monthly salaries of employees or failing to discuss with the executive committee of the grassroots trade union prior to salary deduction;
(2) failing to fully pay salaries to employees who have to stop working due to employers’ faults;
(3) paying employees lower than the minimum wage level in case of work interruption not due to employees’ faults and/or due to power- or water supply incidents or force majeure circumstances; and
(4) failing to pay or fully pay salaries and salary allowances to employees during the time of work suspension;
shall be fined as follows:
a/ Between VND 300.000 and VND 2,000,000 when committing violations against 1 to 10 employees;
b/ Between VND 2.000.000 and VND 5,000,000 when committing violations against 2 to 50 employees;
c/ Between VND 5.000.000 and VND 15.000.000 when committing violations against 51 to 100 employees;
d/ Between VND 15.000.000 and VND 20,000,000 when committing violations against 101 to less than 500 employees;
e/ Between VND 20.000.000 and VND 30,000,000 when committing violations against 500 employees or more.

Employers that commit any of the following violations:
(1) paying employees lower than the minimum wage level:
(2) paying salaries equal to the minimum wage level to professionally- or technically-trained employees or failing to pay salaries based on the productivity, quality and effectiveness of employees’ work; and
(3) punishing employees by cutting their salaries;
shall be fined as follows:
a/ Between VND 300.000 and VND 3.000,000 when committing violations against 1 to 10 employees;
b/ Between VND 3.000.000 and VND 10,000.000 when committing violations against 2 to 50 employees;
c/ Between VND 10.000.000 and VND 15.000.000 when committing violations against 51 to 100 employees;
d/ Between VND 15.000.000 and VND 20,000,000 when committing violations against 101 to less than 500 employees;
e/ Between VND 20.000.000 and VND 30.000.000 when committing violations against 500 employees or more.

A fine of between VND 2.000.000 and VND 10,000,000 shall be imposed on employers that fail to formulate wage scales, wage tables, labor norms, and wage and bonus payment regulations in their enterprises.
Labour Code 1994 §192
Decree No. 47/2010 - Administrative Sanctioning of Violations of the Labour Code §10

Other penalties

Other potential penalties for violations of the Labour Code are warnings, withdrawal of licenses, compulsory payment of compensation, or compulsory cessation of business operations, or criminal prosecution.

The following remedial action is also contemplated for wage-related violations:
a/ Registering wage scales and wage tables with labor state management agencies within 20 days after receiving a sanctioning decision; publicizing wage scales, wage tables, labor norms and bonus regulations in enterprises;
b/ Formulating wage scales, wage tables, labor norms and bonus regulations in enterprises under law;
c/ Paying salaries and other benefits to employees under law.
Labour Code 1994 §192
Decree No. 47/2010 - Administrative Sanctioning of Violations of the Labour Code §10(6)

Results generated on: 02nd October 2014 at 08:26:20.
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