Increase salary of officials, civil servants, and public employees from July 1 when salary reform is implemented
The National Assembly has passed Resolution 104/2023/QH15 on the state budget estimate for 2024, which includes content on the implementation of salary reform from July 1, 2024.
According to the Ministry of Home Affairs, with the salary reform plan, from July 1 onwards, the average salary of officials, civil servants, and public employees is expected to increase by about 30% (including basic salary and allowances). From 2025, this salary level will continue to be adjusted with an average annual increase of about 7%.
The Ministry of Home Affairs is consulting with the authorized level to establish a salary table system consisting of 70% basic salary and 30% allowances in the total salary fund.
In addition, there is an additional 10% basic salary fund for the head of agencies or units of commendation. At the same time, the head has the power to issue mechanisms to use regular funding to hire experts, attract and employ talented individuals in the public sector.
Increase pension, social insurance benefits
Along with the salary reform for civil servants, Resolution 104/2023/QH15 of the National Assembly also mentions the increase in pension and social insurance benefits.
Accordingly, from July 1, 2024, while adjusting pensions and social insurance benefits, monthly benefits, preferential benefits for contributors, and some social security policies associated with the basic salary will be implemented.
Recently, along with the consideration of the devaluation factor in adjusting pensions and economic growth in 2023, the Vietnam Social Security has proposed a pension adjustment of about 8% from July 1 this year.
According to the Vietnam Social Security, this adjustment will help reduce the difference between pension recipients before salary reform and those receiving pensions from July 1 onwards.
However, earlier, at a meeting to implement tasks at the beginning of this year, Minister of Labor – Invalids and Social Affairs Dao Ngoc Dung said that the salary reform must be accompanied by pension adjustment, therefore, at least pensions must increase by 15%.
Having participated in building salary policies for many years, Former Deputy Minister of Labor – Invalids and Social Affairs Pham Minh Huan said that each side’s differences on proposed pension increases are justified.
The Ministry of Labor – Invalids and Social Affairs wishes for a higher increase because pensions are currently low, but the Vietnam Social Security’s proposal is based on implementation basis according to Article 57 of the Social Insurance Law 2014.
Accordingly, the Social Insurance Law 2014 stipulates the adjustment of pensions based on the increase in the consumer price index and economic growth, appropriate to the state budget and the Social Insurance Fund.
However, until now, pensions have always been adjusted at a level equal to or higher than the salary increase for officials and civil servants. Therefore, according to Mr. Huan, when officials and civil servants’ salaries are adjusted higher, retirees also need to have a higher pension increase.
The former Deputy Minister also emphasized that the pension increase needs to be considered. The proposed level of the Ministry of Labor – Invalids and Social Affairs will be more in line with the wishes of retirees, but the Social Insurance Fund will also have to increase more than the amount of payment.
As usual, before submitting it to the Government, the Ministry of Labor – Invalids and Social Affairs will gather extensive opinions from agencies, organizations, and individuals on the draft decree adjusting pensions, social insurance benefits, and monthly benefits.
According to the roadmap for implementing tasks in 2024, the Ministry of Labor – Invalids and Social Affairs plans to submit a draft decree adjusting pensions, social insurance benefits, and monthly benefits to be in line with salary reform in April 2024. However, there is currently no exact figure on the pension increase from July 1, 2024.
Increase average minimum wage by 6%
In addition to the salary increase for officials, from July 1, the minimum wage of workers working in business areas is also expected to be adjusted upwards.
Because at the end of 2023, the National Wage Council voted to determine the 2024 minimum wage increase at 6% to recommend to the Government, with the time for the increase being from July 1, 2024.
With a 6% adjustment, the minimum regional wage will increase by VND 200,000 to VND 280,000 depending on the region. Therefore, after the adjustment, the minimum wages for each region are as follows: Region 1 will increase to VND 4,960,000; Region 2 will be VND 4,410,000; Region 3 will be VND 3,860,000 and Region 4 will reach VND 3,450,000. Currently, the minimum wage ranges from VND 3,250,000 to VND 4,680,000.
With a 6% increase, the minimum hourly wage will also increase in each region as follows: Region 1 will increase by VND 23,800; Region 2 will be VND 21,200; Region 3 will be VND 18,600; Region 4 will be VND 16,600.
