Legal provisions regarding non-monetary compensation for employees working in arduous and hazardous environments

Employees are valuable and potential assets, constituting one of the essential factors for ensuring the stable and robust operation of a business. Simultaneously, employees can also be regarded as having significant profit for the business. They can contribute their talents and ideas to the enterprise. For enterprises engaged in production and industries that require the contribution of employees in unfavorable working conditions, such as mining, tobacco processing, and plastic packaging, which may have an adverse impact on employees’ health. Current legal regulations are highly concerned with the issuance of support policies and compensations for workers. For example, employees working in hazardous environments are entitled to 16 days of annual leave per year, which is higher than other types of employees. Among which, it is worth mentioning the policy of non-monetary compensation for employees working in arduous and hazardous environments. 

The law does not have any regulations defining what non-monetary compensation means. However, it can be understood as the use of certain nutritional items by the employer for the benefit of the employees in order to reduce, prevent, mitigate or maintain the normal state of health of employees who are exposed to hazardous or toxic elements in the workplace. The specific material goods used for compensation may vary depending on the business, and may include fresh milk, condensed milk, fruits, various types of produce, and other types of foods.

Currently, according to the Circular No. 24/2022/TT-BLDTBXH dated November 30th, 2022, effective from March 1st, 2023 on the provision of compensating employees with material goods working under hazardous or harmful conditions (“Circular 24/2022”). This Circular has replaced Circular No. 25/2013/TT-BLDTBXH dated October 18, 2013. Some important provisions under Circular 24/2022 include: 

1. Conditions for receiving non-monetary compensation 

Based on Article 3 of the Circular No. 24/2022/TT-BLDTBXH dated November 30th, 2022 regarding non-monetory compensation for workers working under hazardous or harmful conditions (hereinafter referred to as “Circular 24/2022”), the regulations are as follows: 

The employee is entitled to receive non-monetary compensation when they meet both of the following conditions: 

1. Performing jobs or occupations listed in the list of particularly arduous, hazardous, and dangerous occupations and jobs issued by the Minister of Labor – Invalids and Social Affairs. 

2. Currently working in a working environment with at least one of the following two factors: 

a) Having at least one hazardous or harmful factor that does not meet the standards and hygiene regulations according to the regulations of the Ministry of Health.

b) Being exposed to at least one factor rated from 4 marks or more in the category “Contact with sources of infectious diseases under the Law on Prevention and Control of Infectious Diseases” (item 10.1 of Appendix I issued with Circular No. 29/2021/TT-BLDTBXH dated December 28th, 2021, of the Minister of Labor, War Invalids and Social Affairs, regulating labor classification standards according to working conditions). 

The determination of the factors specified in Clause 2 of this Article must be carried out by organizations qualified to operate environmental labor monitoring in accordance with the law. 

The list of professions prescribed in Circular 11/2020/TT-BLDTBXH dated November 12th, 2020 regulates the list of arduous, toxic, hazardous and particularly arduous, toxic, hazardous professions and jobs (hereinafter referred to as “Circular 11/2020”), and the working conditions of employees that are considered hazardous due to the impact on their health by factors such as noise level, air pollution, etc. in the workplace. If the employer determines that the working conditions of the employee meet both of the conditions as prescribed above, the employer shall be responsible for organizing the implementation of the policy of non-monetary compensation for the employee. 

2. The level of non-monetary compensation 

Non-monetary compensation shall be calculated based on daily rates and valued in monetary terms according to the following compensation levels:

a) Level 1: 13,000 VND;

b) Level 2: 20,000 VND;

c) Level 3: 26,000 VND;

d) Level 4: 32,000 VND.

For employees who meet the conditions stipulated in Article 3 of Circular 24/2022, the specific compensation level for each profession and job is prescribed in Appendix I to Circular 24/2022 and is applied according to the corresponding working time as follows: 

a) If working for 50% or more of the normal working hours of a workday, the employee shall be entitled to the full allowance rate; 

b) If working below 50% of the normal working hours of a workday, the employee shall be entitled to half of the allowance rate; 

c) In case of overtime work, the allowance rate in kind shall be increased corresponding to the number of overtime hours according to the above principles. 

Notes: 

According to current regulations, the level of non-monetary compensation is determined based on the corresponding occupation or job position, resulting in different levels of compensation. Therefore, employers need to classify each job position and determine the corresponding labor conditions to determine the corresponding compensation level. 

One of the criteria for determining the compensation level is to identify hazardous and harmful factors that do not meet the hygiene standards according to the regulations of the Ministry of Health. At the same time, employers also need to determine how many hazardous and harmful factors that do not meet hygiene standards exist in the workplace at each job position. In most cases, if there is at least one hazardous or harmful factor that does not meet the hygiene standards according to the regulations of the Ministry of Health, it will belong to level 1. Meanwhile, if there are two or more such factors, the compensation level will be level 2 or another corresponding compensation level based on the labor conditions. 

3. Principles of organizing non-monetary compensation 

1. The organization of non-monetary compensation objects must be carried out during working shifts and days, ensuring convenience, safety, and food hygiene. If the employee performs mobile, dispersed, or low-occupancy work or other jobs with unstable labor organization that cannot be trained in a centralized manner, the employer must provide material compensation to the employee so that the employee is responsible for self-training according to regulations. In this case, the employer must make a list of distribution with the employee’s signature and regularly check the employee’s training implementation. 

2. Not allowed to be paid in cash or included in the salary (including being included in the wage rate) as a substitute for non-monetary compensation. 

3. Encourage employers to consider and decide on providing non-monetary compensation at level 1 (VND 13,000) for workers who do not work in occupations or jobs listed in the list of especially arduous, toxic, hazardous, and especially arduous, toxic, hazardous jobs as stipulated by the Minister of Labor – Invalids and Social Affairs, but who are working under labor conditions that have at least one of the dangerous or harmful factors as prescribed in Clause 2, Article 3 of this Circular. 

4. The cost of non-monetary compensation shall be accounted for as regular operating expenses and production costs in accordance with the law. 

Notes: 

While advising businesses on labor law compliance (in general), many companies are currently applying allowances and support levels higher than the minimum compensation stipulated by the law. However, in essence, (i) these allowances and support levels are not considered interchangeable with the minimum non-monetary compensation, and (ii) the form of payment for these allowances and support may violate the principle that employers pay in cash and transfer together with the salary. 

Therefore, although the allowances and support for employees are much higher than the implementation of non-monetary compensation, but the minimum non-monetary compensation still needs to be ensured as prescribed in Clause 1 of Article 4 of Circular 24/2022/TT-BLDTBXH. 

If the employer intentionally applies a non-monetary compensation level which is lower than the level prescribed by law, there is a possibility of being administratively sanctioned under Clause 8 Article 22 of Decree No. 12/2022/NĐ-CP dated January 17th, 2022: “… one of the acts of not providing or not fully providing personal protective equipment or providing but not meeting the quality requirements as prescribed; not implementing non-monetary compensation regime or implementing the non-monetary compensation regime at a level lower than prescribed; paying money instead of non-monetary compensation for employees working under hazardous or harmful conditions.” The fine is calculated based on the number of employees, with the highest fine being from 20,000,000 to 30,000,000 VND for violations involving 301 employees or more. 

In addition to the fine, the employer may also be subject to remedial measures for the violation. Specifically, the employer must pay the employee the non-monetary compensation converted to cash at the prescribed level. 

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