Guidelines on Number of Permanent Employees under the Law on Investment
On December 03,2009, the Ministry of Labor Invalids and Social Affairs (MOLISA) issued the Circular No. 40/2009/TT-LDTBXH providing guidelines for calculation of number of permanent employees recruited by enterprise under Decree No. 108/2006/ND-CP dated September 22, 2006 providing detailed provision and guidelines for implementation of a number of articles of the Law on Investment.
Governing scope and applicable entities of this Circular is ones stipulated in Decree No. 108/2006/ND-CP mentioned above.
Method for calculation of permanent employees (PE):
PE of an enterprise are employees who are working under the timekeeping table/payroll of an enterprise consisting of employees with labor contract with a term of 03 months or more, including employees who are on their leave to enjoy social insurance regimes under the law, management personnel and officials in charge of in Party organizations and political-social organizations.
Number of PE is the average number of employees within a year or a month.
Formula to calculate the average number of PE in a month:
Of which:
li: average number of employees used within the month i of the year.
i: the month of the year;
Xj: number of employees working at the date j of the month i, that consists of employees with labor contract from 03 months or more, and employees who are on their leave to enjoy social insurance regimes under the law, management personnel and officials in charge of in Party organizations and political-social organizations.
j: the date of the month.
ΣXj: the total of employees used in every day of the month i.
n: number of days within month i (regardless of the actual working days used in the enterprise).
The average number of PE of the month i within a year = total number of PE used within the month i/ number of days of month i in solar calendar.
In respect of enterprise that starts its operation, the number of the first month shall be the actual operation days within that month.
Formula to calculate the average number of PE in a year:
Of which:
Lk: average number of employees used within the year k;
k: the year;
li: number of employees working at the month i, of the year k;
Σli(i=1,t): total of monthly average number of PE within the year k;
t: actual operation months of enterprise within the year k.
In respect of enterprise that newly starts its operation, the number of the months shall be the actual operation months within that year.
The yearly average number of PE of the year k = total of monthly average number of PE within the year k/the number of months.
The Circular no.40/2009/TT-LDTBXH will be useful for investors and enterprises to define the number of PE used in enterprises under the Law on Investment in order to enjoy investment incentive and other incentive regimes.
This Circular will take effect after 45 days from 3 Dec 2010.
By courtesy of ©LuatViet - Advocates & Solicitors 2009
