MINISTRY OF
EDUCATION AND
TRAINING

VIETNAM ACADEMY OF
SOCIAL SCIENCES

GRADUATE ACADEMY OF SOCIAL SCIENCES

PHẠM THỊ LIÊN NGỌC

SALARY IN THE ENTERPRISE ACCORDING TO
THE CURRENT VIETNAMESE LABOR LAW
Major: Economic Law
Code: 9380107

SUMMARY OF DOCTORAL THESIS IN LAW

HA NOI - 2019


The thesis is completed at GRADUATE ACADEMY OF SOCIAL
SCIENCES

Supervisor: Assoc Prof., Dr. Nguyen Huu Chi

Reviewer 1: Prof., Dr. Hoang The Lien

Reviewer 2: Prof., Dr. Nguyen Thi Mo

Reviewer 3: Assoc Prof., Dr. Nguyen Hien Phuong

addition, competent state agencies also have issued a lot of normative
documents that regulate the enterprise salary. Typically, there are
regulations on minimum wage, the principle of building payroll in
different types of enterprises. Those regulations initially have been
creating the legal basis for social relations on salary whose formation
and development according to the law of the socialist-oriented
economy, have been not only contributing to create fairness and
transparency in paying salary but also protecting employees’ rights.
However, besides changes and fluctuations in the labor market, the
social relations on salary are also growing more diverse. Enterprises can
easily use their specific reasons to set their own regulations on salary
that are causing disadvantages for employees, making difficulties for
the state inspection and supervision on payrolls and employees’ actual
payment, affecting badly the living standard of employees as well as
ensuring the deduction rate to social insurance, health insurance,
unemployment insurance, causing consequences in eco-social life.
In fact, over the time, there has not been any research to
systematically and comprehensively study this issue. Therefore, the
PhD students choose the topic “Salary in the enterprise according to
the current Vietnamese labor law” as a doctoral thesis with theoretical
and practical significance, contributing to improve the law performance
on enterprise salary nowadays.
2. Purposes and missions of the thesis
2.1. Purposes of the thesis
The purpose of the thesis is clarifying the theoretical and practical


2
basis of enterprise salary.
Therefore, the thesis assesses the practical issues of current legal

the theoretical and legal issues of salary in enterprises, thereby the
thesis gives some scientific theory to complete the thesis topic.


3
About practical meanings, the thesis contributes to practical
evaluation, points out the advantages and limitations of legal regulations
and pratical situation of salary in enterprises. The results of the thesis
will provide the legal science a more general view, contribute certain
practical values to legal scientists and enterprises in legislation and law
application on the enterprise salary.
6. Structure of the thesis
The thesis includes introduction, 4 chapters conclusion,
recommendation, list of published works, references and appendix.
Chapter 1
OVERVIEW AND RELATED MATTERS ABOUT RESEARCH
1.1. Overview about research
1.1.1. Abroad studies
Group of studies related to salary in enterprise
Firstly, group of studies about salary under economic perspective
- Typical research in this perspective are: Textbook of Labor
economics of Prof., Dr. Pogosian GP and Prof., Dr. Giucop; The book:
Modern labor economics: Theory and public policy of Ronald G.
Ehrenberg , Robert S. Smith; States with Minimum wage above the
Federal level has had small business overcoming and retail job growth
of Fiscal Policy Institute,...
Secondly, the studies analized related contents of salary in some
perspectives: payroll, payment methods, minimum salary. Some typical
research: The effect of mininmum wage throughout the wage
distribution of Neumark; The Advantage Of The Minimum Wage of

representive organizations of the employees in negotiating, signing
collective labor agreements... Typical research: Current salary and
income policies in Vietnam by Mai Ngoc Cuong; Research on salaries
and income in non-state enterprises in Hanoi by Vu Hong Phong.
Thirdly, with the importance of salary in labor relations, some
studies suggested that there should be a legal valid document as the
Salary Law in legal documents system regulating the labor field.
Fourthly, the research related to examinating, monitoring and
evaluating the effectiveness of the application of labor laws on salary,
the rights and obligations of the parties in labor relations related to
salary issues.
1.1.3. Evaluating the research situation related to the thesis topic
Theoretically, those studies have basically raised some legal
arguments about the enterprise salary, but have not yet systematically
clarified the theory of salary in enterprises according to labor laws.


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Practically, those research has raised many situations in each
aspect. However, there have not been any studies that overall evaluated
situation of the current situation of enterprise salary in Vietnam.
Relating to the solutions, few domestic studies have approached
under the perspective of labor law on salary. However, there has not
been a systematic study on this issue. Therefore, a comprehensive
research is needed about enterprise salary in current Vietnamese labour
law.
1.2. Theretical basis and research methods of the thesis
1.2.1. Theretical basis
1.2.1.1. Research theory
The thesis applied theory of business - labour administration

Under the perspective of enterprises, salary in enterprises are
understood as the amount that employers must pay to employees based
on productivity, quality, work efficiency and working conditions,
determined by agreement between two parties in labor relations and not
contrary to legal regulations.
2.1.2. The nature of salary in the enterprises
Firstly, the nature of salary in enterprises is expressed in its
economic perspective, that is the result of the negotiating and
exchanging labor goods that are provided by the employees in a period
of time; or the result of a product or service introduction that the
employees will receive an amount agreed with the employer. In market
economy, salary is dominated by the rule of value and the law of labor
supply and demand.
In social perspective, salary is also a guarantee for employees to
cover their life and family. Therefore, employees can also receive
allowances based on salary, bonus and welfare.
2.1.3. Factors affecting salary in enterprises
* Factors from labor supply and demand
* Factors from internal enterprises and employers
* Factors from employees
* Collective labor agreement on salary
* Factors from legal policies of the State
* Factors from international integration
2.2. Theory of law on salary in enterprises
2.2.1. Concept of law on salary in enterprises
Although salary is an economic factor that is put into the value and
cost of products by employers, the state needs to manage and monitor
salary in enterprises to protect employees who have lower position in



relations. On the law basis, parties in labor relations, especially
employers, need to comply with the limits set by the State such as
minimum salary, payment principles, payment time... to ensure legal
valid for agreements between the parties.


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* Principle of non-discrimination in the field of salary
Employers must ensure equal payments, regardless of gender for
the same valuable work of employees
2.2.4. Adjusting methods of law on salary in enterprises
- Method of agreement
- Administrative methods
- Combining method of agreement and administrative method
2.2.5. Contents of of law on salary in enterprises
Minimum salary
The minimum salary is understood as the lowest amount to pay
employees to do the simplest work in normal labor conditions and must
ensure the minimum living needs of employees and their families.
The minimum salary has the effect of reproducing simple labor
power, ensuring the minimum demand and re-manufacturing of labor.
The minimum salary is regulated by the State, which is mandatory for
both parties in labor relations, which means that the minimum salary
cannot be lowered by both employers and employees.
The minimum salary has sone characteristics such as: it is paid for
a labor at the simplest level, for the lightest labor intensity, for the labor
takes place under normal conditions; The minimum salary must ensure
the minimum consumption demand for employees and their families;
The minimum salary is determined by the cost of living in the region
with the average cost of living.

helps improve the employee's salary. The allowance regime may be
agreed by both parties or fixed by the employer, recorded in individual
labor contracts or collective labor agreements. There are a number of
allowances: responsibility allowance, toxic allowance, working
seniority allowance, ...
* Payment methods
- Payment methods by time
- Payment methods by products
- Payment methods by stock salary
- Other provisions on salary payment in some special cases
* Salary deduction
The employer can only deduct the employee's salary to compensate
for damage caused by employees to the employer's tools and equipment.
Employees have the right to know the reason for deducting their salary.
Monthly deduction of salary cannot exceed a monthly percentage of
employee's income after deducting compulsory social insurance, health
insurance, unemployment insurance and income tax.


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* Rights and obligations of employers and employees in term of
wages
- Employers: Labor relations are formed and maintained in the
form of labor contracts, in which the rights and interests of the parties
are agreed by the parties on the law basis. Employers, as owners and
capital investors as well as employers and users of labor, have rights to
decide income distribution in enterprises such as the right to build
payroll system, labor norms, wage regulations and salary allowances...
- Employees: Employees must comply with the regulations of
employers in the field of salary such as salary scales and payrolls

labor norms as a basis for recruitment, employment and agreement on
the salary stated in labor contracts and salary for employees. The
employer needs to consult the representative organization of the
employee at the establishment, publicly announce it at the employee's
workplace. After that, send a notice to the competent management
agency at the district level, where the business and production
establishment of the employer is located.
The construction of wage scales, payrolls and reasonable
determination of allowance levels must be derived from different
characteristics in each industry and in each specific working condition.
3.1.4. Law on building labor norms
Some principles to build labor norms: Implementing for each step
and each stage in job and the whole process of product production;
Building on the level of work or title; Labor level must be an advanced
average, ensuring that the majority of employees can perform it; The
new labor level must be tested before being officially issued;
Periodically reviewed and evaluated to modify, supplement and adjust
accordingly. When formulating or adjusting labor levels, enterprises
must consult the organizations representing the collective of employees
in enterprises and make public at the employees' work places and send
them to competent management agencies.
3.1.5. Other regulations about salary
* Salary allowance
The regulation of many allowances are leading to the allowance a
relatively large proportion of the total income of employees, reducting
the importance of salary. Therefore, from the Party and the State’s point
of view, especially the Resolution No. 27/2018 of the Party requires the
agencies to conduct research to review and amend the legal provisions
on wage allowances in which the total number of salary allowances
does not account for more than 30% of the employee's total income.

main employer must be responsible for paying wages and ensuring such
benefits for the employees. The employer has the right to ask the
contractor to compensate in accordance with the legal regulations.
* Advance salary
Under the provisions of Article 100 of the Labor Code 2012,
employees are entitled to have advance salary in case: (1) Employees
are paid in advance according to the conditions agreed by the two


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parties; (2) Employers must pay advance salary corresponding to the
number of days employees temporarily leave to perform their civic
obligations from 01 week or more but not exceed 01 month's salary and
must repay the advance amount unless perform military service.
3.2. Practical implementation of the law on wages in enterprises in
Vietnam recently
General assessement
The average income of employees increased steadily over the
years, by the fourth quarter in 2016, it reached 5.08 million VND, of
which male reached 5.24 million VND and female reached 4.85 million
VND. The salary in public sector gradually improved, State’s
enterprises were given more autonomy in managing labor; income and
bonuses for employees and managers; clearly assigning responsibilities
of enterprises, controllers, owners and management agencies in
monitoring and inspecting wage regime and bonuses of enterprises;
supplementing regulations on publicity in terms and bonuses; salaries
associated with labor productivity and production efficiency, ensuring
the autonomy of enterprises in determining and paying salary for
employees.
The Labor Code has determined the basic principle of salary

Employees are paid improperly, the wage are still low or owed;
employers are not paid bonuses, along with working conditions and
extreme intensity of labor. Many businesses have adjusted the minimum
regional wage but cut, reduced subsidies and allowances, so the income
of some employees is basically not improved.
3.2.1. The minimum wage
In Vietnam, the National Wage Council has a regular duty to
provide a minimum wage for employees. Since its establishment, the
Council has 6 times successfully held negotiations and the adjustment
level announced by the Government is also the level recommended by
the Council (the average level in 2014 increased by 15.4%; in 2015
increased by 14.2%, by 12.4% in 2016, by 7.3% in 2017, 6.5% by 2018
and by 2019 by 5.3%). The minimum wage is determined by region in
accordance with natural characteristics, economic and social conditions,
policies to attract investment and develop labor market of the region and
the country.
The process of adjusting the minimum wage increases gradually in
accordance with the social economic conditions, the payment ability of
enterprises (especially small and medium-sized enterprises), contributing
to ensuring employees’ life, stabilizing the labor market and labor


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relations in enterprises. The minimum regional wage in 2018 is from
2,760,000 to 3,980,000 VND per month (about USD 121 to 175 per
month) that ensures competitiveness in attracting investment compared
to other countries in the region (higher than Laos, Cambodia, and
Myanmar). The actual salary payment of enterprises for employees is
not low in comparision with the minimum wage announced by
Government. Many businesses have set labor norms, scales, payrolls and

composition, functions, and operational mechanisms of the National
Wage Council are still limited and need to be further improved in
accordance with the integration process and participation in
international agreements.
The implementation has not been synchronous and widespread, the
private sector and cooperatives mainly have lovw rate of minimum
wage. Employers do not want to adjust the minimum wage increase, the
employee itself is not fully aware of their rights.
The promulgation of the Decree on the minimum wage of the
Government is still slow, leading to the implementation of guidelines
for implementation to slow establishments, making businesses passive
in developing annual minimum wage. State management on the
implementation of the minimum wage regime is still limited; the impact
assessment has not been carried out when adjusting the minimum wage
level, especially in checking and monitoring the minimum adjustment.
Collective bargaining in the minimum wage and wage in enterprises is
low; almost enterprises have not reached an agreement on higher
minimums than regulated.
The sanctions for handling violations in the implementation of the
minimum wage are not strong enough, the lack of measures and
monitoring mechanisms lead to the tendency to force the employee’s
wage to close to the minimum wage, affecting the employee's interests
as the main cause of leading to labor disputes and strikes.
3.2.2. The principle of building salary scales and payrolls
Salary scales:
Because the labor market in Vietnam has not yet completed, the
agreements on wage have not really taken effect, the State has stipulated
a number of general principles for enterprises to build ladders and
tables, contributing to limit the situation of wage pressure. Therefore,
employee benefits are more secure. However, the gap between the

employees. However, in fact, there are still some enterprises, the
application of high labor norms to employees is still very sophisticated
and complicated. Although the minimum wage is still applied, some
enterprises create certain difficulties for employees, which are building
labor norms too high, with strict conditions to make employees spend a
lot of effort; only working overtime can meet the minimum wage if the
employees want to increase income. Therefore, the state management
agency should issue effective regulations and implement strict
monitoring to end this situation.
Chapter 3 Conclusion


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Chapter 4
SOLUTIONS TO COMPLETE AND IMPROVE EFECTIVENESS
OF LAW APPLICATION ON SALARY IN ENTERPRISES
IN VIETNAM
4.1. Perspectives of wage reform and improvement of the law on
wages in enterprises in Vietnam
4.1.1. Directions
First, institutionalize the guidelines of the State and the Communist
Party on developing a healthy, progressive labor market, protecting the
rights and interests of parties in labor relations.
Second, in the process of improving the legel system on wage in
enterprises, it is necessary to inherit and increase the legal status of
existing regulations in order to make the law to become a main legal
instrument for related entities to enforce their rights and obligations,
ensure democracy inseparable from the State's management.
Thirdly, the Party and State determine that the establishment of a
separate legal framework to adjust the salary in enterprises is a difficult

enterprises
Continuing to improve the law following the socialist orientation,
ensuring equality between different types of businesses, regardless of
economic sectors and types of enterprises, and clearly defining the role
of the State and parties in labor relations, ensuring the employee's
income in enterprises to reflects the true and is formed on the basis of
agreement between employees and employers.
4.2. Some recommendations to improve the law on wages in
enterprises
4.2.1. Perfecting the legal structure of wages and issuing the Law on
wages in enterprises
* The structure of legal forms in enterprises: It requires a system
of rules to adjust this content fully, uniformly contained in legal
normative documents and issued in a certain procedures by competent
state agencies.
* Content structure of the law on enterprise wage: The content
structure of the law on wage in enterprises requires that the rules must
identify social relations, issues related to wage in enterprises of
importance weight needed to adjust by law.
* Issuing the Law on wages in enterprises
In order to accelerate the democratic process in all aspects of life,
including labor relations, to promote the ability to criticize policies, to
promote and strengthen labor relations, it is necessary to include the
draft Law on wages in enterprises in the agenda of the National


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Assembly and need to approve and issue this document, creating a legal
basis for the problem in enterprises to become a content with a great
role and an important contribution to the construction a healthy and

it is recommended to abandon the requirement of participation of the


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organization of the labor collective faction when building salary scales
and payrolls.
4.2.4. Studying and issuing guidelines on construction of labor
norms
Labor norms contribute to boosting labor productivity. However,
the construction of labor norms is too high may cause workers to be
exhausted labor. Therefore, employees themselves must also participate
in research and contribute ideas, propose to participate in building
appropriate labor norms in enterprises, where they participate in labor
relations.
4.2.5. Amending, supplementing and perfecting a number of
legal regulations closely related to wages in enterprises
Reviewing legal normative documents such as Labor Code,
Enterprise Law, Law on Government organization, Law on
Organization of Local Government, Decrees on organization and
operation of units, ... to find out the irrationalities of the work for
employees under the labor contract mechanism, from which there are
plans to adjust those regulations accordingly.
4.3. Proposals to improve the efficiency of labor law enforcement on
wages in enterprises
4.3.1. Solutions for wage reform in enterprises
Adjusting the regional minimum wage in accordance with the
requirements of socio-economic development, the ability of businesses
and the living standard of the employees to ensure the minimum living
standard; Gradually reducing the State's direct intervention on the issues
of enterprises; Managing labor force in state-owned enterprises by the

difference of the factors that govern the minimum wage applicable to
different types of businesses. So the agencies developing law on wage
need to adjust the salary level applied to the regions appropriately.
When the minimum wage increase must be based on the laws of supply
and demand, market value and competition, the minimum wage
increase must be periodically. In addition, the wage increase must
depend on the conditions, areas and working environment.
The minimum wage by sector is the basis for paying employees in
specific sectors. In order to encourage key industries in economic
development, in addition to creating a favorable legal environment, it is
necessary to create a gap in minimum wages between sectors. In order
to accurately determine the industry's minimum wage, it is necessary to
base on the following factors: Minimum wage level, working standard,
agreement ability of employees in each industry and the importance of
that industry in economy.