is an annual salary increase for employees mandatory in Vietnam, regulations on salary in Vietnam, annual salary increase for employees mandatory in Vietnam, salary increase for employees mandatory in Vietnam, mandatory salary increase in Vietnam,

Is an annual salary increase for employees mandatory in Vietnam?

Salary is a highly sensitive topic in the market in Vietnam. In the working life, many employees are tired of the scenario of working for the same companies for years but don’t have a raise in salary. They thought that they have been loyal to the company, contributing their youth to the company but don’t get recognition. So, is an annual salary increase for employees mandatory in Vietnam?

Regulations on salary in Vietnam

Article 90 of the Labor Code 2019 has clearly stipulated the regulations on salary in Vietnam:

  • A salary is an amount the employer pays the employee under an agreement for work performed by the latter. Salary equals (=) base salary plus (+) allowances and other additional amounts.
  • The base salary must not fall below the statutory minimum wage.
  • Employers shall pay salaries fairly without discrimination against genders of employees who perform equal work.

The principal rule in salary is that it must not fall below the regional minimum wages.

Is an annual salary increase for employees mandatory in Vietnam?
Is an annual salary increase for employees mandatory in Vietnam?

However, for the salaries of employees that are above the regional minimum wages, there are no strictly stipulated regulations.

This means that the salary provided for an employee will be based on the production organization, and labor organization of the business. The business will have the responsibility to develop and decide on the salary scale and salary table for managerial labor, professional and technical labor, and employees directly in production, business, service, etc.

Therefore, it is not a bizarre situation if an employee doesn’t get his/her salary increased for years working in the same company.

This is because the starting salary of a job or title in the salary scale or payroll is determined by the business on the basis of the complexity of the job or title corresponding to the qualifications, skills, responsibilities, and experience to perform the job.

This situation happens a lot for workers in factories who can have their salary remain for years, unchanged until there are some fundamental changes in the regional minimum wages.

Mandatory salary increase in Vietnam

For the question of whether or not the annual salary increase is mandatory, the answer is no.

The current law does not provide for periodic salary increases for employees. This is because although the labour law in Vietnam is built to protect the employees, it is also necessary to look at the situation from the employer’s side.

Accordingly, the law can’t force the business to have an annual increase in salary for employees if the business is under loss or doesn’t create enough profits to perform that action yearly.

Therefore, understandably, businesses have the right to decide for themselves how often to raise salaries for employees once.

If an employee wants to know the regulations on periodic salary increases in the business, they need to look at the salary scale, salary table, and salary increase conditions of the business. After self-evaluating that they have met the conditions to have a raise in salary, the employee might give out a proposal to be considered for a raise to the manager.

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.

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