Question 65: Under the labour law, are Employers obliged to annually adjust the salary scales applied to Employees? What is the minimum gap between two successive pay grades?

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Annual adjustment to increase the salary scale applied to Employees

Pursuant to the labour law[1], Employers are required to periodically review to amend and supplement wage scales and payrolls in line with: (i) actual conditions for technological innovation; (ii) production and labour organisation; (iii) salary levels in the labour market; and (iv) ensuring compliance with labour law. In fact, because the area minimum wage is adjusted by the Government on an annual basis, the salary scales and payrolls must also be reviewed and adjusted upward by Employers, except for the lowest salary grade in the salary scale. The payroll is still higher than the new are minimum wage set out by the Government.

Minimum gap between two successive salary grades

For the purpose of encouraging Employees to improve their professional and technical levels, accumulate experience, develop their talents, the gap between the two successive salary grades must be at least 5%[2].

[1]Article 7.5 Decree 49/2013/NĐ-CP dated 14/05/2013

[2]Article 7.2 Decree 49/2013/NĐ-CP dated 14/05/2013.