Vietnam's government initiates a comprehensive revamp of its salary framework. Public sector employees can expect substantial raises starting July 2024, as the government focuses on equitable income distribution.
With mass layoffs on the cards, analysts believe that employee retention will remain a top priority for businesses in 2023. Salary was previously the most important factor in attracting talent, but other factors must now be paid due regard, such as remuneration, workplace environment, skills development opportunities, and flexible policies.
Employers have been exempted from paying unemployment insurance premiums for the past year in an effort to help them overcome Covid-19. As production and business activities return to some semblance of normal, compulsory unemployment insurance premiums will be re-applied from October 1, at 1 per cent of an employee’s monthly salary.
Many new policies on labor and wages come into effect in September, such as a regulation on a two-day holiday for National Day, regulations on working time and rest periods for employees who operate, maintain, or repair gas distribution pipelines and gas works, and a pilot on work and vocational guidance and training for inmates outside of prison.
A representative from ManpowerGroup Vietnam presented survey data on Vietnam’s labor market at the “Development of a flexible, modern, sustainable and integrated labor market” conference. Low skills and low English use partly contribute to salaries for Vietnamese workers being far behind those in the region.
Many workers who were employed overseas have experience and foreign language skills but still struggle to find a job, while many businesses are short of workers and struggling to recruit. The main reason for such a paradox is that many of these workers find salaries to be too low compared to what they earned while abroad.
Adjustments will be made from February to policies that directly affect workers’ rights, including adjustments to salary and monthly income for which social insurance has been paid, changes in the ceiling fee for labor export services, and increases to the maximum overtime for seasonal workers.
The Minister of Labor, Invalids and Social Affairs has said there will be a basic change in salaries paid by businesses based on market principles. Companies will be able to establish their own salary scales and payroll and salary regulations, with the State only stipulating a regional minimum wage.
