Is it necessary to sign a new labor contract when receiving a salary increase in Vietnam?

Hello Ms., Lawnet would like to provide the following regulations:

1. Legal regulations on salary increase for employees in Vietnam

According to Article 90 Labor Code 2019 of Vietnam, the regulations on salary are as follows:

Article 90. Salary

1. Salary is the amount of money that the employer pays to the employee according to an agreement to perform work, including the wage level according to the job or title, salary allowances, and other additional amounts.

2. The wage level according to the job or title must not be lower than the minimum wage.

3. The employer must ensure equal pay without gender discrimination for employees performing work of equal value.

Thus, salary increases are based on the agreement of the parties on the time of increase and the conditions for an increase. Employers are not required to increase employees' salaries.

However, if the regional minimum wage increases, the employer is obligated to increase the employee’s salary if it is lower than the regional minimum wage. The salary paid by the employer must be at least equal to the regional minimum wage stipulated by Decree 24/2023/ND-CP.

2. Does a company in Vietnam need to sign a new labor contract when increasing an employee's salary?

Based on the provisions of Article 21 Labor Code 2019, 10 essential contents that a labor contract must include:

- Name, address of the employer, and full name and title of the person entering into the labor contract on the employer's side;

- Full name, date of birth, gender, place of residence, ID card number, citizen identification card, or passport number of the person entering into the labor contract on the employee's side;

- Job and workplace;

- Duration of the labor contract;

- Salary according to the job or title, payment form, payment term, salary allowances, and other additional amounts;

- Promotion and salary increase regime;

- Working hours, rest breaks;

- Labor protection equipment for employees;

- Social insurance, health insurance, and unemployment insurance;

- Training, improving professional skills.

Salary and other issues related to salary are mandatory contents of the labor contract. When entering into a contract, the employer and employee must explicitly agree on the salary according to the job or title, payment form, payment term, salary allowances, and other issues.

Therefore, when the employer decides to increase the employee’s salary, it is necessary to amend or supplement the labor contract.

The amendment or supplementation of the labor contract is regulated in Article 33 Labor Code 2019. To be specific:

Article 33. Amendment and supplementation of labor contracts

1. In the process of performing the labor contract, if either party requests to amend or supplement the content of the labor contract, it must notify the other party at least 03 working days in advance about the content to be amended or supplemented.

2. If the two parties reach an agreement, the amendment or supplementation of the labor contract content is carried out by signing an appendix to the labor contract or entering into a new labor contract.

3. If the two parties cannot agree on the amendment or supplementation of the labor contract content, the existing labor contract continues to be executed.

The party requesting the amendment or supplementation of the labor contract content must notify the other party at least 3 working days in advance about the contents to be amended. The amendment or supplementation of the labor contract content can be done through signing an appendix to the labor contract or entering into a new labor contract.

The labor contract appendix is a part of the labor contract and has the same effect as the labor contract. It details, amends, or supplements certain clauses of the labor contract but does not change the duration of the labor contract. (Article 22 Labor Code 2019)

Therefore, in essence, the labor contract appendix has the same legal value as the labor contract. In the case of a salary increase for the employee, the company does not necessarily need to sign a new labor contract but can choose to sign a labor contract appendix to amend the salary-related clauses.

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