30% increase in basic salary from July 1

At a regular press conference on the afternoon of June 20, Minister of Home Affairs Pham Thi Thanh Tra said that the Politburo has agreed to implement 4/6 contents clearly stated in the salary reform project from July 1. Due to many shortcomings arising and the need to carefully study each step, the abolition of the basic salary and salary coefficient is not yet eligible for implementation.

The Ministry of Finance's calculations show that if all the contents of public sector salary reform are fully implemented, the total salary fund of cadres, civil servants and public employees will increase by 30.6%. This figure does not include bonuses. Based on that, the basic salary will increase from the current VND 1.8 million to VND 2.34 million per month (an increase of 30%). Cases enjoying policies and regimes associated with the basic salary will also increase by a corresponding 30%.

According to the resolution on salary reform, there will be 9 new types of allowances such as allowances for concurrent positions, seniority beyond the framework, job responsibility, and career-based incentives. However, from July 1, the conditions are not sufficient to implement these 9 types of allowances, so the Government proposes to keep the current allowances such as allowances for leadership positions, concurrent positions, seniority beyond the framework, and career-based responsibilities.

The Government will be responsible for researching, amending and supplementing the allowance regime and some special regimes of the armed forces, cadres, civil servants and public employees in some specialized fields, especially allowances according to professions where unreasonable conditions arise during the implementation process.

For state administrative agencies and units that are applying special financial and income mechanisms, the Government assigned the Ministry of Finance to preside over the review of the legal framework. From there, there will be a basis for deciding to amend or abolish the special financial and income mechanisms of the agencies accordingly. From July 1, during the period of non-amendment, the monthly salary and income increase will be calculated based on the basic salary of 2.34 million VND, not exceeding the salary and income increase received in June 2024.

The Minister of Home Affairs said that the increase in the basic salary from the current VND1.8 million to VND2.34 million/month (30%) is the highest increase ever, contributing to improving the lives of those receiving salaries and benefits, subsidies, and support policies associated with the basic salary. This also creates motivation to improve productivity and work efficiency, contributing to social stability, demonstrating the Party and State's concern for cadres, civil servants, public employees, armed forces, and those receiving benefits, subsidies, and allowances in the context of many difficulties in the country.

"We will soon ask for the National Assembly's opinion and will implement it from July 1," said Minister Tra.

The basic salary is used as the basis for calculating salary levels in salary tables, allowance levels and implementing various regimes. Most recently, from July 2023, the basic salary increased from 1.49 to 1.8 million VND/month (an increase of 20.8%).

Currently, the salaries of cadres, civil servants, public employees, and armed forces members are calculated by multiplying the base salary (1.8 million VND) by the salary coefficient. The salary coefficient is calculated according to the rank of each group of civil servants.

Reporting to the National Assembly on the morning of May 20, Deputy Prime Minister Le Minh Khai said that by the end of 2023, the whole country would have set aside 680,000 billion VND to implement the new wage policy.

Regional minimum wage increased by 6% from July 1

The Minister said that for the business sector, the regional minimum wage as prescribed by the Labor Code will increase by 6% compared to 2023. After the increase, the average of the 4 regions will be 4.17 million VND/month.

The salary in region 1 increased to 4.96 million VND; region 2 is 4.41 million; region 3 is 3.86 million and region 4 is 3.45 million VND. Currently, the salaries of the regions fluctuate between 3.25-4.68 million VND. The hourly minimum wage also increased by 6% from July 1. Specifically, regions 1-4 will increase to 23,800-21,200-18,600-16,600 VND/hour.

The regional minimum wage is the lowest level that serves as a basis for businesses and employees to negotiate and pay wages. The wage is paid to employees working under normal working conditions, ensuring sufficient normal working hours in a month and completing agreed labor norms or work.

For more than 10 years, the minimum wage has been adjusted every January 1st. However, due to the impact of the pandemic, economic crisis, and layoffs, the next minimum wage adjustment will be in July within four years.