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Vietnam begins to reduce salary gap between state agencies and private sector

Reforming wage policy for civil servants and public employees is one of the solutions to stop the brain drain from the public to the private sector.
Minister of Home Affairs Pham Thi Thanh Tra

In 2018, the 12th Central Committee of the Party released Resolution 27 on reforming wage policy in 2021 applied to cadres, civil servants, public employees, armed force officers, and workers in enterprises.

New salary system

Because of the Covid-19 pandemic, the 13th Central Committee agreed on delaying the reform twice. However, many National Assembly deputies said, as the pandemic has subsided and the economy is recovering, it is time to implement wage reform as soon as possible.

Policymakers have been urged to closely follow the guidelines in Resolution 27 to design a new salary system that implements progress and social justice.

One content required by the Central Committee for the public sector is a new uniform salary system for cadres, civil servants, public employees and armed forces officers throughout the political system. The lowest salaries of cadres, civil servants and public employees would be equal to the lowest average salaries of the private sector in regions.

With the direction, if wage reform is carried out, the lowest salary of civil servants and public employees would be VND3.9 million a month (VND4.68 million in Region 1, VND4.16 million in Region 2, VND3.64 million in Region 3 and VND3.25 million in Region 4).

As such, civil servants with the lowest salaries would receive VND1.9 million more than before wage reform.

The Central Committee has also set a target that by 2025, the lowest salaries of civil servants and public employees would be higher than the lowest average salaries of the private sector in regions.

It is expected that by 2030, the lowest salaries of cadres, civil servants and public employees would be equal to or higher than the lowest salaries of the regions that have the highest salaries in the private sector.   

Base salary and salary coefficient to be removed

The Central Committee has requested the abolition of the current base salary and salary coefficient, and a new base salary with specific amounts. 

Instead, the new salary structure will be base salary (70 percent of total salary fund) and allowances (30 percent). The bonus fund will be 10 percent of yearly salary fund, not including allowances.

New payroll will be built in accordance with job titles, positions and leadership positions, which will replace the current payroll scale. New salaries won’t be lower than the current salaries.

It is necessary to build a wage scale based on positions of cadres, civil servants and public employees holding leadership positions (appointed and elected) in the political system from the central to commune levels. 

The classification of leadership positions in the political system will be determined by the Politburo after reporting to the Central Committee.

In addition, there will be a wage scale applied to civil servants and public employees who don’t hold leadership positions.

The Central Committee has also requested three pay scales for the armed forces. A series of allowances currently applied will be removed, such as seniority allowance, leadership position allowance, and public mission allowance.

Answering questions from voters recently, Minister of Home Affairs Pham Thi Thanh Tra said the ministry will join forces with relevant ministries and agencies to continue to study and create specific content in the new wage scheme.

After considering the socio-economic situation, the budget of 2022 and following years, the ministry would report to the Central Committee and National Assembly about the time to implement wage reform.

According to former Deputy Minister of Labor, War Invalids and Social Affairs Pham Minh Huan, the salaries in the public sector relate to two factors, including salaried persons and sources of payment. 

To restructure wage scheme, there are only two ways – either making the budget bigger, or making the number of recipients smaller by streamlining the workforce. Only when both this is done will there be enough conditions for a wage increase. 

Thu Hang

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