Vietnam metro probes state-owned firms for overpaying execs

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Ho Chi Minh City's labor department plans to reduce the "extremely high" salaries that many executives from three state-owned companies received last year, an official has said.

Nguyen Thi Dan, chief of the Wage Division under the HCMC Department of Labor, War Invalids and Social Affairs, told Thanh Nien Tuesday the division will check if the payments were made in accordance with current labor law.

The department's inspectors are in the process of determining who is responsible for the erroneous expenditures.

The statement was made after the city government issued a report saying some state-owned companies were found last year paying "abnormally high" annual salaries to their executives, with one director earning an income that was 41 times higher than that of the average worker.

According to the report, for instance, the director of the HCMC Urban Drainage One-member Limited Company was paid VND2.6 billion (US$123,000) in total while an average worker was paid on average VND65 million ($3,074).

The director of the HCMC Public Light One-member Limited Company was paid VND2.2 billion ($104,000), while the average worker only received VND93 million ($4,400).

The director of the Sai Gon Traffic Works One-member Limited Company was paid VND856 million ($40,500), while the average worker earned just VND54 million ($2,550).

Vietnam's 2012 annual income per capita was $1,555.

According to the report, the payments violated Labor Code regulations, and that the leaders of the companies did not offer contracts to hundreds of workers eligible for infinite work contracts in order to avoid paying them.

They instead used money meant to fund workers' salaries to pay the leaders.

As much as VND6 billion ($283,750) from the state budget was lost due to the exorbitant payments, the report says.

Le Manh Ha, the city's deputy mayor, asked the companies to issue a report to explain the situation.

He also asked the labor department to revise the payments in public works companies to reduce losses to the state budget and eliminate unfair income distribution.

It is unfair when leaders receive high salaries while workers who have to work in difficult and dangerous conditions are paid poorly, he said.

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