proposal to increase the base salary from 1.49 million VND to 1.8 million VND in Vietnam, increase the base salary from 1.49 million VND to 1.8 million VND in Vietnam, increase the base salary to 1.8 million VND in Vietnam, increase the base salary in Vietnam,

Proposal to increase the base salary from 1.49 million VND to 1.8 million VND in Vietnam

The Government of Vietnam is submitting to the National Assembly to increase the base salary from 1.49 to 1.8 million VND per month, the change is expected to be implemented from July 1, 2023. This is a welcome step forward for the group of civil servants and public employees, contributing to reducing the workload and repelling the alarming situation of the fact that the number of public servants and public employees who quit their jobs increased due to low wages to move to the private sector.

The base salary increase is expected to be 1.8 million VND, equivalent to an increase of 20.8% in comparison to the current base salary which is 310,000 VND. The last time the base salary increase was adjusted in 2019, the increase was 100,000 VND and before that, it was only 90,000 VND.

Although the amount is quite large, this is the first increase in base salary after 3 years of stopping the yearly increase due to the impact of the Covid-19 pandemic, leading to the Government and the National Assembly having to invest and circulate funds to support the people of the country to fight the pandemic.

If approved, the base salary in the state sector will increase by 20.8% after 3 years without adjustment, reaching 1.8 million VND. Notably, this 1.8 million VND mark is 10 times higher than the base salary of Vietnam effective January 1, 2000, of 180,000 VND.

This difference also partly shows the influence of inflation on the VND in Vietnam.

It is expected that if the increase is 20.8% as proposed, the Government must balance the expenditure of 44,000 billion VND.

Proposing to increase base salary soon

It is expected that the base salary will increase from 1/7/2023 as proposed by the Government. However, when the proposal was made, many members of the National Assembly suggested that the base salary should be changed from January 1, 2022, not until July 1, 2022.

This proposal was made based on the current situation of the health and education sectors which are facing many difficulties, with statistics from 63 provinces, cities, ministries, and branches showing that in the past 2.5 years, Vietnam has 39,552 cadres, civil servants and public employees quit their jobs, of which 16,247 people in the education sector, 12,198 in the health sector, mainly because the salary based on the base salary system is too low, not enough to live on.

This situation has reached a serious alarming level and through that, many delegates believe that these cadres, civil servants and public employees will not be able to have enough determination and financial resources to endure until July 2023.

Thereby, the increase in the base salary should be implemented from the beginning of 2023 to support and compensate the health sector, education sector, etc. for the rapid price slide of the tight salary in the past time.

However, many experts also note that regardless of the positive impacts of the proposal to increase the base salary to 1.8 million VND or the proposal to speed up the effective date for increasing the base salary, we must not forget the main goal set out from 5 years ago which is to completely reform the wage system for the group of workers working in the public sector.

The capital and wage reform policy was set out by the Central Government in Resolution 27 in 2018, expected to be implemented in July 2021, but then the reform roadmap was postponed to July 1, 2022, and then continue to be postponed to 2023. Moving to the present time in 2022, on October 20, the Government continued to submit to the National Assembly to implement no salary reform in 2023.

Accordingly, on one side, Vietnam needs to ensure the rights of employees as cadres, civil servants, and public employees in the present time, but also at the same time, ensure the implementation of the salary reform plan, building and promulgating the system of salary reform with the new payroll system by job position, title and leadership position to replace the current payroll system.

In particular, the salary under the new system is guaranteed not to be lower than the current salary. Of particular importance is the abolition of the current base salary and salary coefficient.

The new salary structure in the public sector includes basic salary (accounting for about 70% of the total salary fund), allowances (accounting for 30%); additional bonus (bonus fund is equal to about 10% of the total salary fund of the year, excluding allowances).

It is expected that, compared with the current base salary of 1.49 million VND, the new salary reform framework will have an expected salary increase of about 29% to over 40%. Thereby, with the upcoming increase in base salary in 2023 to 1.8 million VND, equivalent to an increase of 20.8%, it can be said that Vietnam is still on the right track to ensure the rights of Vietnamese employees in the public sector.

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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