VietNamNet Bridge – The Government adjusted up base wages of officials, civil servants, and armed forces by 5% to VND1.21 million per month on average from May 1 in line with a new resolution.

The resolution on the 2016 State budget projections clarifies pensions and allowances for some beneficiaries grew 8%, the same increase as last year.

The resolution also stipulates that the monthly pay for people with pensions and allowances of under VND2 million and pre-school teachers who have been working since before 1995 should be adjusted to reach the base wage from January 1 this year.

Ministries, agencies, and provinces are told to allocate funds for the salary increases, according to the resolution. The central budget will partly cover salary hikes for poor localities.

The Government expects to arrange around VND11 trillion for the wage spikes starting May 1, with 40% of it sourced from the central budget and the remainder from local funds.

Wages of officials and civil servants have not moved up over the past three years due to budget constraints while the regional minimum wages of employees at enterprises have risen by 10-15% annually in the past years.

Currently, employees in Zone 4 get the lowest minimum wages of VND2.4 million per person per month, almost double the current average base salary.

The average rise in region-based minimum wages for employees makes enterprises shoulder higher salary funds and social insurance payments. This causes many difficulties for employers.

Some experts said wages reflect labor productivity and that payroll reductions will help the new base wage accurately reflect labor productivity of officials and civil servants.

Thuy Dung

Source: SGT