Content of Wage Reform According to Resolution 27/NQ-TW 2018: What Are the Goals of the Wage Reform?
The Salary Reform Content for Officials and Public Employees and State Armed Forces Under Resolution 27/NQ-TW Year 2018
In Section 3 of Resolution 27/NQ-TW Year 2018, the salary reform content for officials and public employees and state armed forces (public sector) is clearly stated as follows:
(1) Designing the Salary Structure
Design a new salary structure consisting of:
Basic salary (accounting for about 70% of the total salary fund) and allowances (accounting for about 30% of the total salary fund).
Add bonuses (bonus fund to be approximately 10% of the total annual salary fund, excluding allowances).
(2) Develop and issue a new salary table system based on job positions, titles, and leadership positions to replace the current salary table system; transition from the old salary to the new salary, ensuring it is not lower than the current salary, including:
- Develop one leadership salary table applicable to officials and public employees holding leadership positions (elected or appointed) in the political system from central to communal levels based on the principles:
+ The leadership salary must reflect the rank in the political system; a leadership position receives a leadership salary; if one holds multiple positions, the highest salary for the highest position is applied; equivalent leadership positions receive the same salary; the salary for higher-level leaders must be higher than that for lower-level leaders;
+ Specify a salary for each equivalent leadership position; do not differentiate ministries and central authorities, boards, committees, and equivalents at the central level in the leadership salary table; do not differentiate salaries for equivalent leadership positions based on local administrative unit classification, which is implemented through allowance policies. The classification of equivalent leadership positions in the political system is decided by the Politburo after reporting to the Central Executive Committee.
- Develop one professional and occupational salary table for officials and public employees not holding leadership positions; each professional and occupational title having multiple salary grades based on principles:
+ Same level of job complexity should have the same salary;
+ Higher than normal working conditions and occupational incentives should be implemented through professional allowance policies;
+ Reorganize groups and the number of grades in professional and occupational titles, encouraging officials and public employees to improve their professional skills. Appointment to a professional title or occupational title must be tied to job positions and professional title structure managed by the body, organization, or unit overseeing officials and public employees.
- Develop three salary tables for the armed forces, including:
+ One salary table for army officers, police commissioners, and technical police based on job, title, and rank;
+ One salary table for non-commissioned military personnel and technical police;
+ And one salary table for defense workers and police workers (maintaining the current salary ratio for the armed forces compared to administrative officials).
(3) Specify detailed elements to design the new salary table
- Abolish the statutory pay rate and the current salary coefficient, establish a basic salary with specific amounts in the new salary table.
- Unify labor contract policies according to the Labor Code (or service provision contracts) for those performing transactional and service tasks (training requirement below intermediate level), not applying the officials and public employees salary table for these subjects.
- The minimum salary for officials and public employees in the public sector is the salary for workers requiring intermediate-level training (grade 1) not lower than the minimum wage for trained workers in the business sector.
- Broaden the salary relationship basis to determine specific salaries within the salary table system gradually approaching the salary relationship in the business sector appropriate to the state's resources.
- Perfect policies for regular salary raises and advancement intentionally for officials and public employees and the armed forces consistent with the new salary table regulations.
(4) Reorganize the current allowance policies, ensuring that the total allowance fund accounts for a maximum of 30% of the total salary fund
- Continue applying concurrent duty allowances; beyond framework seniority allowances; regional allowances; job responsibility allowances; mobility allowances; security, defense, and special armed forces allowances (army, police, cryptographic).
- Merge professional preferential allowances, job responsibility allowances, and hazardous and dangerous allowances (commonly known as professional allowances) for officials and public employees in jobs with higher-than-normal working conditions and appropriate State incentive policies (education and training, healthcare, judiciary, prosecution, civil judgment enforcement, inspection, auditing, customs, forestry protection, market management, etc.). Merge special allowances, attraction allowances, and long-term service allowances in socio-economic special difficulty areas into service allowances in particularly difficult regions.
- Abolish professional seniority allowances (except for the army, police, cryptographic to maintain salary relationship with officials); leadership position allowances (because leadership positions in the political system earn leadership salaries); allowances for party, social-political organization work; public service allowances (already included in the basic salary); hazardous and dangerous allowances (because working conditions with hazardous and dangerous elements have been included in professional allowances).
- Implement new administrative unit classification allowance policies for commune, district, and provincial levels.
- Consistently apply monthly allowance allocation for non-specialized staff at commune level, villages, and residential groups based on the regular spending ratio of the commune People's Committee; specify the maximum number of non-specialized staff by commune, village, residential group type. Based on this, the commune People's Committee submits to the same-level People's Council to specify positions getting allowances so one position can handle multiple tasks but ensuring the quality and effectiveness of assigned work.
(5) On the mechanism of salary and income management
- Heads of agencies, organizations, and units are allowed to use the salary fund and annual recurrent expenditure allocation to hire experts, scientists, and particularly talented individuals to perform tasks of the agency, organization, or unit and decide appropriate income payments for the assigned tasks.
- Heads of agencies, organizations, and units develop regulations to periodically reward individuals under their management based on evaluation and classification results of individual work performance.
- Expand the pilot mechanism for some centrally-governed cities and provinces that self-balance their budgets and ensure adequate resources for salary reform and social security policies. They can pay additional average income not exceeding 0.8 times the basic salary fund of officials and public employees under their management.
- Public non-business units ensuring regular and investment spending or regular spending and state fiscal funds outside the state budget can implement autonomous salary mechanisms based on performance like businesses.
- Public non-business units partly covering their recurrent expenditures and public service providers fully funded by the state budget apply salary policies like officials. Actual salaries are linked to job positions, professional titles, and occupational titles decided by the head of the public service provider based on revenue (from state budget allocation and unit revenue), labor productivity, work quality, and efficiency as per unit salary payment regulations, not lower than the state's salary policies.
*What is the content of salary reform under Resolution 27/NQ-TW Year 2018? What is the objective of salary reform?*
Salary Reform Content for Employees in Enterprises Under Resolution 27/NQ-TW Year 2018
In Section 3 of Resolution 27/NQ-TW Year 2018, the salary reform content for employees in enterprises is clearly stated as follows:
(1) Regarding Regional Minimum Wage
- Continue to improve the regional minimum wage policy on a monthly basis; add regional minimum wage regulation per hour to enhance minimum wage coverage and meet labor market flexibility.
- Adjust the regional minimum wage to ensure the minimum living standard for salaried workers and their families, considering factors of the labor market and socio-economic development (labor supply-demand, economic growth rate, consumer price index, labor productivity, employment, unemployment, business payment capacity, etc.).
- Strengthen the function, duties, and organization structure of the National Wage Council; add independent experts to the Council.
(2) On the Mechanism of Salary and Income Management
- Enterprises (including 100% state-owned enterprises) can independently decide their salary policies (including salary scales, wage tables, labor norms) and pay wages not lower than the state-published minimum wage based on collective labor agreements, aligned with production organization, labor organization, enterprise capacity, and publicized at the workplace.
- The State publishes regional minimum wage on a monthly and hourly basis, average salary in the market for industries and supports labor market information, without directly intervening in enterprise salary policies. Enterprises and employees negotiate salary, sign labor contracts, and link salary payment to productivity and work results. Enterprises and representative worker organizations negotiate salary, bonuses, and other incentives in collective labor agreements or enterprise regulations. Enhance the role and capacity of union organizations and inspection and supervision by state management agencies.
(3) For State-Owned Enterprises
- The State regulates general principles for determining salary and bonuses for state-owned enterprises linked to labor productivity and business efficiency, aiming to ensure market wage levels. Implement wage fund contracts, including bonuses in the wage fund linked to tasks, business conditions, nature of enterprise operations; gradually move towards contracting business tasks linked to results, managing and using state capital effectively.
- Clearly differentiate the salary of the state capital representative from the executive board’s salary; implement the principle where the entity hiring, appointing, evaluates, and pays the salary. The State regulates basic salary, additional salary, and annual bonuses linked to business scale, management complexity, and state capital use efficiency for state capital representatives. Basic salary adjusted appropriately to domestic and regional market levels. Gradually proceed to hire independent board members and pay board members, controllers from post-tax profits. The general director and executive board members work on labor contract policies and receive salaries from the enterprise’s general fund, within which salary caps are set based on business results and average employee salaries. Publish annual salary and income for state capital representatives and state-owned enterprise general directors.
- For enterprises tasked with market stabilization as assigned by the State, calculate and determine to exclude costs ensuring market stabilization tasks, forming the basis for determining salaries and bonuses for workers and enterprise managers. For public utility enterprises, the State calculates reasonable wage costs suitable to the market levels into the costs and unit cost price for public utility products and services. The State implements income regulation policies ensuring balance among enterprises, managers, workers, and the State.
What is the General Objective of Salary Reform Under Resolution 27/NQ-TW Year 2018?
Based on Subsection 2.1 of Section 2 Resolution 27/NQ-TW Year 2018, the general objective of salary reform under Resolution 27/NQ-TW Year 2018 is clearly stated as follows:
- Develop a national salary policy system scientifically, transparently, suitable to the country's practical situation, meeting the development requirements of the socialist-oriented market economy and proactive international integration, building harmonious, stable, and progressive labor relations;
- Create motivation to release production forces, increase labor productivity, and enhance the quality of human resources;
- Contribute to building a clean, lean, effective, and efficient political system;
- Combat corruption and waste; ensure the livelihood of salary recipients and their families, achieving social progress and justice.
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