Salary scale and remarks

The salary scale in a business serves as the basis for negotiating wages with employees and implementing regulations (such as overtime pay, social insurance contributions, etc.).

Salary:

Salary is the amount that the employer pays to the employee according to the agreement to perform the work. It includes the salary level based on the job or position, salary allowances, and other additional amounts.

Salary Level:

The salary based on the job or position must not be lower than the minimum wage.

Relevant legal Documents:

Vietnam Labor Code 2019

Responsibility of the Business:

1. According to the regulations in the Labor Code 2019, employers must establish a salary scale, wage table, and labor norms. The labor norms must be the average level ensuring that most workers can perform their duties without extending normal working hours and must be applied on a trial basis before formal issuance.
2. Unlike the provisions of the Labor Code 2012, businesses are no longer required to register or notify local labor authorities about their salary scales. They only need to issue them according to regulations and keep them internally.
3. The current regulations no longer specify the minimum distance between two salary levels or percentages like 5%, 7% for heavy, especially heavy, and trained labor.

Content of the Salary Scale:

Most salary scales are structured as matrices, including job titles and salary levels for each title. Some salary scales may also record additional allowances for job titles (if any), but most allowances will be specified in a separate regulation table to avoid confusion.
In addition to the salary scale, businesses also need to specify the conditions for each job title (e.g., director’s requirements for qualifications, experience, and skills, department head’s requirements, accountant’s requirements).

Gathering Employee Opinions:

Businesses need to organize a dialogue on the matter to gather employee opinions on the content of the salary scale (and labor norms if applicable). The process and participants should follow the company’s democratic regulations (refer to Decree 145/2020/NĐ-CP).
Businesses also need to consider the opinions of the grassroots labor representative organization (trade union) on this matter.

Note:

Currently, businesses are responsible for building their own salary scales, and government agencies no longer intervene in the construction of salary scales within businesses. This is both an advantage (reducing constraints, limitations, and legal procedures) and a challenge for businesses – how to construct it to comply with legal regulations, ensuring that the salary scale still motivates employees (those with high seniority, those in hazardous positions or requiring high skills, etc.). Businesses need to be very careful when constructing their salary scales, especially not to overlook internal procedures, such as organizing dialogues with employees to gather opinions on the salary scale.

Should you have any questions or concerns, please feel free to contact An Luật Việt Nam. Our company, with an experienced team of lawyers and consultants, will guide you in building and perfecting your company’s salary scale; ensuring legal compliance and legal benefits for all your activities.