Now that Circular 23 is effective, it is essential for enterprises to take notice of wage-related issues, such as form and term of payment of wages, night pay and overtime night pay.— Photo vneconomy

On June 23, 2015, the Ministry of Labour, Invalids and Social Affairs promulgated Circular No 23/2015/TT-BLDTBXH (Circular 23) stipulating a number of articles on wages of Decree No 49/2013/ND-CP. The circular came into effect on August 8, 2015.

Now that Circular 23 is effective, it is essential for enterprises to take notice of wage-related issues, such as form and term of payment of wages, night pay and overtime night pay.

Method, terms of payment

Enterprises may negotiate to either pay their employees with time-based wages (monthly, weekly, daily, or hourly), piece rates, or fixed wages.

In addition, Circular 23 details that daily wages are calculated based on each month of the solar calendar and employees are guaranteed to receive an average of at least four (4) days off per month.

Enterprises should note that change of wage payment methods must be written in employment contracts and collective bargaining agreements. Furthermore, wage payment terms applied to monthly salaried employees is also prescribed in Circular 23. According to this, monthly wages shall be paid once or twice a month within the month the employees work.

Night pay

Circular 23 has included more specific provisions concerning different formulas to calculate salaries for those who work night shifts, including time-based workers and piece workers.

From August 8 2015, enterprises are expected to use the formulas specified in Article 1 of Circular 23 in case of night work. More importantly, it is also necessary to become familiar with the term "actual hourly wage on a normal working day." This amount equals the actual wage (minus overtime pay and night pay) divided by the number of actual working hours (not including overtime).

Overtime night pay

Similarly, Circular 23 clearly provides formulas to be utilised in case of overtime night work, in which the factor of daytime hourly wages is determined as follows:

- If the employee does not work overtime during the day, the daytime hourly wage on a normal working day shall be at least 100 per cent of the actual hourly wage on a normal working day.

- If the employee works overtime during the day and continues working at night, the overtime hourly wage shall be at least 150 per cent of the actual hourly wage.

- If the employee works overtime at night on a weekly day off, the overtime wage shall be at least 200 per cent of the actual hourly wage.

- If the employee works overtime at night on a public holiday or paid day off, the overtime wage shall be at least 300 per cent of the actual hourly wage.

PLF – LAW FIRM