What is pay scale? What are the penalties for violations of the pay scale in Vietnam?

Regarding this matter, LawNet would like to answer as follows:

1. What is pay scale?

Pay scale is a system built from salary ranges, salary groups, and salary levels to serve as a basis for paying salaries to employees. From the pay scale, managers will easily classify each group and their enterprise's labor capacity. Based on the pay scale, the enterprise pays the employee based on the employee's level, capacity, and ability to complete the job.

When building the pay scale, it is necessary to follow the principles prescribed in Article 93 of the Labor Code 2019 as follows:

Establishment of pay scales, payrolls and labor productivity norms

1. Every employer shall establish their worn pay scale, payroll and labor productivity norms as the basis for recruitment and use of labor, negotiation and payment of salaries.

2. The labor rate shall be an average value that is achievable to most employees without having to extend their normal working hours, and must be experimented before officially introduced.

3. The employer shall consult with the representative organization of employees (if any) during establishment of the pay scale, payroll and labor productivity norms.

The pay scale, payroll and labor productivity norms shall be publicly posted at the workplace before they are implemented.

Thus, the principles when building a pay scale include:

- The employer must establish their worn pay scale, payroll and labor productivity norms as the basis for recruitment and use of labor, negotiation and payment of salaries.

- It is necessary to consult with the representative organization of employees (if any) during establishment of the pay scale, payroll and labor productivity norms.

- The labor rate must be officially introduced before implementing the pay scale and payroll at the workplace for employees to know.

2. Latest regulations on penalties for violations of the pay scale in Vietnam

Clause 1, Article 17 of Decree 12/2022/ND-CP regulates penalties for violations of pay scale.

A fine ranging from VND 5.000.000 to VND 10.000.000 shall be imposed upon an employer for commission of one of the following violations:

- Failing to publicly post the pay scale, payroll, labour productivity norms and bonus regulations at the workplace;

- Failing to establish pay scale, payroll, or labour productivity norms; failing to experiment labour productivity norms before they are officially introduced;

- Failing to consult with the internal representative organization of employees (if any) during the establishment of the pay scale, payroll, labour productivity norms and bonus regulations;

- Failing to provide salary notes to employees or providing salary notes to employees in breach of law;

- Failing to pay salaries fairly or discriminating against genders of employees who perform equal works.

3. Current salary scales of officials and public employees in Vietnam

According to Point a, Clause 1, Article 5 of Decree 204/2004/ND-CP, officials and public employees are currently applying four salary scales as follows:

- Table 1: Salary scale applicable to senior experts.

- Table 2: Profession salary scale applicable to officials and public employees in the State agencies (including those who hold elected positions that entitle them to the salary which is determined in accordance with the salary schedule applicable to administrative officials and with the position allowance schedule applicable to positions of authority and public servants in communes, wards and townships).

- Table 3: Profession salary scales applicable to officials and public employees in the State public service agencies units.

- Table 4: Salary scale applicable to staff members who work in the State agencies and public service agencies units.

However, according to Resolution 104/2023/QH15 on the state budget estimate for 2024, starting from July 1, 2024, comprehensive salary policy reform will be implemented in accordance with Resolution 27-NQ/TW in 2018 on salary policy reform for officials, public employees, armed forces, and employees in enterprises.

The salary reform according to Resolution 27-NQ/TW in 2018 will establish salary scales based on job positions, job titles, and leadership positions with specific amounts, and issue a new salary system. In this regard, five new salary scales will be developed, including two salary scales for specific civil servants and officials:

- One salary scale for leadership positions applicable to officials and public employees holding leadership positions.

- One professional and technical salary scale by official ranks and profession and job title for public employees applicable to officials and public employees who do not hold leadership positions.

Therefore, starting on July 1, 2024, two new salary scales will be implemented for officials and public employees.

Best regards!

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