Wage Regulations – Transparency in Labor Relations

Wage Regulations - Transparency in Labor Relations

Wage Regulations – Transparency in Labor Relations

Wage is one of the decisive factors in maintaining and developing manage employment relations, serving both immediate and long-term operations. Remuneration policies must be developed in a clear, transparent and competitive manner. Proper wage regulations may enhance labor productivity and corporate culture, otherwise, it will eliminate working motivation and cause conflicts of interest and short-term negative behaviors.

Read more: The Proactive Management Of Wage Labor Compliance Procedure

GROUNDS

  1. Wage is a decisive factor in maintaining and developing manage employment relations, serving both immediate and long-term operations. Remuneration policies must be developed in a clear, transparent and competitive manner. Proper wage regulations may promote labor productivity and corporate culture; otherwise, it will eliminate working motivation and create conflicts of interest and short-term negative behaviors.
  2. Wages must be associated with the company’s position – operating results and working conditions – the employee’s performance.
  3. Wages are also related to compliance procedures in labor relations, particularly insurance premiums deducted from the salary and personal income tax (PIT) and corporate income tax (CIT).

COMMON SITUATIONS OF WAGE REGULATIONS OF ENTERPRISE

Completed contents:

  • Determination of base pay, performance allowance, pay rate rise, maximum and minimum wage.
  • Monthly evaluation and classification criteria.
  • Wage payment and pay rise consideration method.
  • Determination of the maximum and minimum wage for each position in accordance with its own position and conditions.

Contents to be addressed:

  • There are normally areas in the wage regulations that are not suitable for the enterprise’s specific conditions and have almost no effect to apply immediately to reality. In addition, the improper structure makes it difficult for employees to clearly understand how to determine the calculation methods and criteria for moving towards.
  • In terms of professional contents, basic matters such as sources of the payroll, distribution principles, wage structure, wage range – rate system, benefits, etc. have been maintained confusing, leading to unclear wage regulations and guidelines. An employee will, for example, find it difficult to determine how to calculate his/her monthly salary, plus position allowance and per diem (if any), time to receive his/her salary and other information about the 13th month’s salary, bonuses, seniority, paid leave days and overtime.
  • Furthermore, a mechanism to clarify and shield the deductions for insurance premiums and explain the proper expenses in CIT settlement and employee’s PIT reduction and exemption has been absent from the wage regulations.

Work to be done:

  1. Determine the objectives and meanings of the enterprise’s wage regulations, demonstrating core contents such as the manage employment relations development strategies, transparent and competitive working environment and productivity, etc.
  2. Clarify the following basic contents of the wage regulations:
  • Sources of the payroll: according to plans, turnover rate or combinations, etc…
  • Distribution principles: according to operating results, salary – benefit – allowance – bonus structure, etc,…
  • Standard title or position-based pay rate and range system
  • Wage calculation and payment methods: by standard time, by contract, by product or probation, etc
  • Allowances: Specific and clear position and responsibility based rates and per diems should be provided.
  • How to calculate wages in cases of dispatch, overtime work, paid leaves, Tet and other holidays, and other bonuses; Pay rise mechanism.
  • Necessary terms in the wage regulations: Such terms as agreed wage, rate-based wage, allowance, benefit, bonus, direct labor, indirect labor, title-based wage, performance-based wage, etc. should be clearly defined in the wage regulations.

HOW TO COORDINATE WITH VIVA BCS

  • New wage regulations should be considered to be developed in a tailored manner.
  • VIVA will send the standard framework and questions that provide core information (requirements specific to the enterprise) within one day.
  • VIVA will send the wage regulations designed specifically for the customer within 03 days.
  • The final version will be completed (once) within 02 days upon our receipt of the feedback.
  • Instructions on how to apply to each actual situation later will be provided.

 

VIVA has been an in-depth consultant on business compliance procedures in Vietnam since 2006, based on our professional - integrated background in Business laws - Accounting and corporate finance - Tax management - Labor relation and payroll – Business administration procedures. VIVA offers exclusive services in an integrated tailor-made, consist of 5 specialized-expertise platforms and the inheritance experience up to hundreds of years for every job.

Our extensive expertise and management system that facilitates us to connect local resources and be ready to deliver exclusive solutions that exceed all standard limits and satisfy all expectations of our clients.

 

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