Which group is not eligible for a 7% annual salary increase after the salary reform in Vietnam from July 1, 2024?
Which group is not eligible for a 7% annual salary increase after the salary reform in Vietnam from July 1, 2024?
On November 10, 2023, the National Assembly passed Resolution 104/2023/QH15 on the state budget estimate for 2024. Accordingly, comprehensive salary policy reforms will be implemented from July 1, 2024, following Resolution 27-NQ/TW 2018.
During the 6th session of the 15th National Assembly, the Prime Minister stated that in 2025, the government will carry out salary policy reforms for the public sector in accordance with Resolution 27-NQ/TW 2018 from July 1, 2024.
At the same time, the government will continue to adjust the region-based minimum wage and salary policies for the business sector as regulated.
From 2025 onwards, a 7% average annual salary increase will continue to be applied to officials, public employees, and armed forces until the minimum wage is equal to or higher than the region-based minimum wage in Region I of the business sector.
Therefore, after the salary reform (from 2025 onwards), officials, public employees, and armed forces who have a minimum wage equal to or higher than the region-based minimum wage in Region I of the business sector will not receive an additional 7% salary increase each year.
Which group is not eligible for a 7% annual salary increase after the salary reform in Vietnam from July 1, 2024?
What is the new salary for officials, public employees, and armed forces after the salary reform in Vietnam?
Resolution 27-NQ/TW 2018 provides details on the salary reform for payrolls applicable to officials, public employees, and armed forces as follows:
- 2 payrolls applicable to officials and public employees
+ Leadership position payroll applicable to officials and public employees holding leadership positions (elected and appointed) in the political system from central to commune level.
+ Professional and technical payroll based on officials' ranks and public employees' professional titles, applicable to officials and public employees without holding a leadership position.
- 3 payrolls applicable to armed forces
+ 1 payroll applicable to military officers, officers and non-commissioned officers of public security forces;
+ 1 payroll applicable to professional military servicemen, technical officers of public security forces.;
+ 1 payroll applicable to defense workers, police workers .
Pursuant to Resolution 27-NQ/TW 2018, there are 02 payrolls based on job positions, titles, and leadership positions for officials, with the new structure formulated as follows:
- Base pay: accounting for about 70% of the total salary fund.
- Allowances: accounting for about 30% of the total salary fund.
- Bonuses: the bonus fund is about 10% of the total annual salary fund, excluding allowances.
According to the Government's official portal, Minister of Home Affairs Pham Thi Thanh Tra stated that under the salary reform plan, from July 1 onwards, the average salary of officials and public employees is expected to increase by about 30% (including base pay and allowances).
From 2025, this salary will continue to be adjusted with an average annual increase of about 7%.
Although we have not implemented the salary reform in the past three years, we have adjusted the statutory pay rate twice, resulting in a 29.5% increase. Therefore, when calculating from 2021 (the expected implementation time of the salary reform according to Resolution 27-NQ/TW) to July 1, the salary of officials and public employees has increased significantly, about 60% on average. This figure may not be a breakthrough, but it is a considerable increase compared to the average annual increase of 7% before the salary reform.
Therefore, when implementing the salary reform policy on July 1, 2024, the average salary of officials based on job positions is expected to increase by about 30% (including base pay and allowances).
From 2025, the salary applicable to officials based on job positions will continue to be adjusted with an average annual increase of about 7%.
How many % of official salary increase after the salary reform in Vietnam?
(1) Officials' salaries will increase by 32% from July 1, 2024 compared to the average income of employees during the salary reform
The notable point of the new salary policy is the provision of a minimum salary for the public sector equal to the average minimum wage of the business sector.
Currently, there are 4 regions in business sector:
- Region 1: 4,68 million VND/month;
- Region 2: 4,16 million VND/month;
- Region 3: 3,64 million VND/month
- Region 4: 3,25 million VND/month.
According to Appendix IV issued with Resolution 01/NQ-CP in 2024, the Government assigned the Ministry of Labor, Invalids and Social Affairs to implement the decree on region-based minimum wage for employees working under employment contracts by May 2024.
Expected from July 1, 2024:
Region | Region-based minimum wage per month (Unit: VND/month) | Region-based minimum wage per hour (Unit: VND/hour) |
Region 1 | 4,96 million | 23.800 |
Region 2 | 4,41 million | 21.000 |
Region 3 | 3,86 million | 18.600 |
Region 4 | 3,45 million | 16.600 |
Therefore, the average region-based minimum wage of the business sector is currently over 3.9 million VND.
When the region-based minimum wage increases, the average minimum wage of the business sector will also increase above the current 3.9 million VND.
In addition, the new salary policy also expands the wage ratio from 1-2.34-10 currently to 1-2.68-12.
The lowest salary of officials and public employees will increase significantly compared to the current starting salary of 3.5 million VND for officials and public employees with intermediate qualifications and a salary coefficient of 1.86.
The average salary of officials and public employees will also have an increased starting point from a coefficient of 2.34 to 2.68. Currently, officials and public employees with a university degree have a starting salary of over 4.2 million VND/month.
The highest salary of officials and public employees, corresponding to level 3 of senior experts (ministerial payrolls), will also be expanded from a coefficient of 10 to 12. Therefore, the new highest salary of officials and public employees is expected to exceed the current figure of 18 million VND.
In addition to this base pay, the new salary regime also rearranges the types of allowances, which account for a maximum of 30% of the total salary fund (with cases higher or lower than 30%) and 10% for bonuses.
>> if considering base pay, allowances, and bonuses, the average salary of officials and public employees after implementing the salary reform will increase by over 32% compared to the average income of workers receiving wages (7.5 million VND/month).
(2) The salary is expected to increase by 7%
According to the Government's report presented by Prime Minister Pham Minh Chinh at the opening session of the 6th session of the 15th National Assembly on the morning of October 23, 2023, it was stated that salary policy reforms for the public sector will be implemented according to Resolution 27 of the Central Committee from July 1, 2024, specifically:
- From 2025 onwards, continue to adjust the average salary by 7% per year for officials until the minimum salary is equal to or higher than the region-based minimum wage of Region I in the business sector.
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