Salary changes from 2019: Important things millions of people need to know

The Government has issued Decree No. 157/2018/ND-CP stipulating the levelregional minimum wagefor employees working under labor contracts.

Subjects of application include: Employees working under labor contracts as prescribed by the Labor Code; enterprises established, organized, managed and operated under the Law on Enterprises; cooperatives, cooperative unions, cooperative groups, farms, households, individuals and other organizations in Vietnam that hire employees under labor contracts; foreign agencies, organizations, international organizations and foreign individuals in Vietnam that hire employees under labor contracts (except in cases where international treaties to which Vietnam is a member have provisions different from those of this Decree).

Specifically, the regional minimum wage applicable to employees working in enterprises from January 1, 2019 is as follows: Region I: 4.18 million VND/month; Region II: 3.71 million VND/month; Region III: 3.25 million VND/month; Region IV: 2.92 million VND/month.

The new regional minimum wage is about 160,000-200,000 VND/month higher than the current wage.

The area applying the regional minimum wage is regulated according to administrative units at district, town and provincial city levels.

The Decree clearly states that enterprises operating in a specific area shall apply the regional minimum wage prescribed for that area. In case an enterprise has units or branches operating in areas with different regional minimum wages, the unit or branch operating in the specific area shall apply the regional minimum wage prescribed for that area.

When implementing the regional minimum wage prescribed in this Decree, enterprises are not allowed to eliminate or reduce the following regimes:salaryWhen employees work overtime, work at night, work in arduous and hazardous working conditions, they are entitled to in-kind compensation for arduous and hazardous jobs and other benefits as prescribed by labor law. Other allowances, supplements, subsidies and bonuses as prescribed by the enterprise shall be implemented according to the agreement in the labor contract, collective labor agreement or in the enterprise's regulations.

Increase basic salary to 1.49 million VND/month from July 1, 2019

In Resolution 70/2018/QH14 on the 2019 state budget estimate, the National Assembly assigned the Government to adjust the increase in basic salary from VND 1.39 million/month to VND 1.49 million/month, adjust pensions, social insurance benefits, monthly allowances according to regulations (for subjects guaranteed by the state budget) and preferential allowances for people with revolutionary contributions to increase by the same level as the increase in basic salary, effective from July 1, 2019.

Increase basic salary to 1.49 million VND/month from July 1, 2019.

Assign ministries, central agencies and localities to continue implementing regulations on policies to create sources for salary reform, thoroughly combining cost savings with restructuring the apparatus, streamlining staff, and improving the level of financial autonomy of public service units.

The central budget ensures funding for adjustment.pension, social insurance subsidies, monthly subsidies as prescribed (for subjects guaranteed by the state budget) and preferential subsidies for people with revolutionary contributions; support the need to adjust additional salaries for ministries, central and local agencies that cannot balance sources as prescribed by the Government.

The National Assembly also assigned the Government to continue directing ministries, central and local agencies to seriously implement the policy of streamlining staff, arranging and organizing a streamlined administrative apparatus, operating effectively and efficiently; innovating management and financial mechanisms, and reorganizing the system of public service units. On that basis, restructuring the budget in each field, reducing direct budget support for public service units, and prioritizing resources for salary reform.

From July 2019, the maximum salary for officials and civil servants is 11.9 million VND.

From July 1, 2019, the basic salary will increase from 1.39 million to 1.49 million VND/month. This basic salary will be used as the basis for calculating salaries in payrolls, allowances and implementing other regimes according to the provisions of law.

This is also the benchmark used to calculate operating expenses, living expenses and provisions, and bonuses based on this salary level.

The professional and technical salary scale for officials and civil servants in State agencies from July 1, 2019 will also be adjusted to comply with new regulations.

With the current professional and technical salary scale for officials and civil servants in state agencies divided into 6 grades (A3; A2; A1; A0; B; C) and 12 levels, the adjustment of the basic salary also helps each grade in each grade increase a part compared to the current actual salary.

For civil servants of type A3, calculating salary level 1, multiplying by coefficient 6.2, the current salary is 8.6 million VND/month, but from July next year it will increase to 9.24 million VND/month, an increase of more than 600,000 VND per month.

For civil servants of type A2, belonging to group 1 with a coefficient of 4.4, the monthly salary will increase to 6.56 million VND from the current 6.11 million VND.

According to statistics, the increase in basic salary will help the salary of civil servants and officials at all levels and groups increase by 200,000-800,000 VND depending on the coefficient. In particular, the maximum salary for officials and civil servants in State agencies will increase to 11.92 million VND/month, more than 800,000 VND compared to the current actual salary. If calculated over the past 2 years, this maximum salary has also increased by 1.5 million VND (the maximum civil servant salary in 2017 was 10.4 million/month).

The lowest civil servant salary will also be raised to 2.01 million/month for civil servants of type C in group 3, who are just starting out, and will have their salary coefficient multiplied by 1.35.

This salary does not include bonuses, allowances or benefits for each specific position./.