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Aug 18, 2021 / 17:27

Vietnam to launch pay reform for public employees from July 2022: NA Chairman

The basic salary is the reference for calculating salaries of State employees by multiplying it with their corresponding coefficient.

The minimum monthly salary of civil servants and public employees should be raised starting July 1, 2022, said National Assembly (NA) Chairman Vuong Dinh Hue at a recent meeting, which discussed on principles, criteria, and norms for the allocation of regular State expenditure estimates for 2022.

The Party Central Committee’s resolution has set July 1, 2022, as the date for salary reform, Hue said, adding that all special wage mechanisms must be removed.

The NA Standing Committee will review and ensure sufficient resources to carry out the salary reforms, Hue noted.

 An overview of the meeting. Photo: VGP

He stressed that many existing criteria and norms on public employee wage have become outdated while many new policies and mechanisms have been issued, thus requiring uniform standards in this regard.

“The Covid-19 pandemic may affect all fields, but I think if we are determined, we can do it because the budget still affords us some room for a minimum salary increase,” Hue said.

For his part, Minister of Finance Ho Duc Phoc said that the local under-spent budget currently stands at VND252 trillion (US$10.9 billion), which is sufficient to finance wage reform.

"The source for the salary increase from July 2022 is ready," said the finance minister.

Concluding the meeting, NA Vice Chairman Nguyen Duc Hai proposed the NA's Committee on Finance and Budget to evaluate the contents expressed in the Resolution on making certain sources to implement the norm standards and wage reform.

Besides, the Vietnamese Government will also need to adjust pensions, social insurance allowances, prescribed monthly allowances, and preferential allowances for people with meritorious services in accordance with the basic wage increase.

Base wages for civil servants in Vietnam in ten different periods. Source: luatvietnam.vn. Chart: Nguyen Ngan

The basic minimum salary in Vietnam is the reference for calculating the salaries of employees in the State-run sector by multiplying it with a corresponding coefficient.

Public sector employees have complained for years that their earnings are too low. The starting coefficient for a university graduate in the public sector is 2.34.

Currently, Vietnam’s minimum monthly salary is divided into four different levels, depending on location - VND4.18 million (US$179) for region 1 (big cities), VND3.71 million (US$159) for region 2 (provincial capital and towns), VND3.25 million (US$139) for region 3 (rural areas), and VND2.92 million (US$125) for region 4 (backward areas).

The four different minimum wage regions reflect the cost of living in each area. Region 1, including the major cities, including Hanoi, Ho Chi Minh City, Danang, Haiphong, and Cantho, has the highest minimum wage, while region 4 (rural areas) has the lowest.

Businesses will calculate their workers' salaries by multiplying the minimum wage with a coefficient determined by qualification and seniority.