Question 70: Can life support and meal payments be considered salary allowances to compensate for the element of living conditions?

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As prescribed by labour law, salary allowances are construed as[1]:

  • The monetary amounts to compensate for the elements of working condition, job with complicated nature, living condition, labour force attraction which have not been counted into the contract salary or have not been considered satisfactory. These include:
  • The amount to compensate for working conditions: applicable to Employees doing the jobs with heavy, toxic, and dangerous nature or especially heavy, toxic, and dangerous nature;
  • The amount to compensate for the job with complicated nature: applicable to Employees doing the jobs which require them to pass a training period, to have professional knowledge or expertise, high responsibilities, or which influence other jobs, require years of experience, working and communication skills, or the skill of coordination;
  • The amount to compensate for living conditions: applicable to Employees doing the jobs in distant, secluded areas with hard conditions and extreme climates, areas with high living costs or housing difficulties, and the jobs which require Employees to move constantly or change their residences regularly, and other elements which make Employees’ living conditions unfavourable for their jobs; and
  • The amount to compensate for the element of labour force attraction: this is used to encourage Employees to work in new economic zones, new markets; to do the jobs with less interesting nature or the labour market of which is still limited; to encourage Employees to work with higher performance and quality or to fulfil the progress of the assigned tasks.
  • The amounts going with the working process and the task performance results.
  • According to the above regulations, the amounts which Employers pay to Employees monthly other than salaries such as: (i) for Employees working in factories distant from cities: a life support payment (“Life Support Payment”), a meal payment (Employers engage a contractor to cook meals in the factory canteen) (“Meal Payment”); (ii) For Employees working in offices in the cities’ centres: an amount to help Employees pay for their meals (also called “Meal Payment”). These payments will be construed as follows:
  • Life Support Payment can be considered a salary allowance to compensate for the living conditions if it is made to Employees to compensate for the element of living conditions because the Employees work in distant, secluded factories with many difficulties and extreme climates, or areas with high living costs or housing difficulties etc. as mentioned above.
  • Meal Payments can be construed as follows:
  • If Employees work on shifts and receive a payment for the in-shift meal, then the Meal Payment in this case is considered as the In-Shift Meal Payment or a benefit that Employers pay to their Employees[2]. In this case, a working shift is construed as a period of 8 consecutive hours/day in normal working conditions (a normal shift) or a period of 6 consecutive hours/day in extremely heavy, toxic or dangerous working conditions (a reduced shift)[3]. In addition, the Meal Payment in this case will not be counted into the salary as the basis to pay SI premiums[4].
  • If Employees do not work on shifts but only work during normal business hours, and receive a meal payment in all working days, the Meal Payment in this case will be considered as a Supplementary Amount which is a specific amount and paid regularly by Employers at the same time of salary payment[5]. In this case, normal business hours prescribed by labour law are non-consecutive 8 hours/day in normal working conditions or 6 hours/day in extremely heavy, toxic or dangerous working conditions; and compliance with the working hours as prescribed by labour law means not to work over 8 hours/day and 48 hours/week (if Employers specify the number of working hours per day) or not over 10 hours/day and 48 hours/week (if Employers specify the number of working hours per week). The Meal Payment in this case will not be counted into the salary as the basis to pay SI premiums from 01/01/2018[6].

Of note, salary allowances, supplementary amounts and benefits paid to Employees must be specified in LCs[7].

[1]Article 4.2 Circular 47/2015/TT-BLĐTBXH dated 16/11/2015 and Article 3.1 (b) Circular 23/2015/TT-BLĐTBXH dated 23/06/2015

[2]Article 4.3 (b) Circular 47/2015/TT-BLĐTBXH dated 16/11/2015

[3]Article 5 Decree 45/2013/NĐ-CP dated 10/05/2013

[4]Article 17 Decree 115/2015/NĐ-CP dated 11/11/2015 and Article 30.3 Circular 59/2015/TT-BLĐTBXH dated 29/12/2015

[5]Article 4.3 (a) Circular 47/2015/TT-BLĐTBXH dated 16/11/2015

[6]Article 17.2 Decree 115/2015/NĐ-CP dated 11/11/2015 and Article 30.2 Circular 59/2015/TT-BLĐTBXH dated 29/12/2015

[7]Article 4 Circular 47/2015/TT-BLĐTBXH dated 16/11/2015