Increase public sector wages from July 1

Minister of Home Affairs Pham Thi Thanh Tra said on June 21, the Politburo issued Conclusion No  83-KL/TW agreeing that the Government would report to the National Assembly on the implementation of wage reform.

Regarding the wage increase, pension and allowance adjustment from July 1, 2024, the Minister said for the enterprise sector, the implementation will closely follow Resolution 27-NQ/TW: Adjust the minimum regional wage according to the provisions of the Labour Code (increase by 6 per cent from July 1, 2024); and regulation stipulating the wage mechanism for state-owned enterprises (applicable from January 1, 2025).

For the public sector, four out of six contents stipulated in Resolution 27 have been implemented:  First, complete the wage increase regime. Second, supplement the bonus regime from July 1, 2024 (equal to 10 per cent of the basic wage fund), associated with the evaluation, classification of the level of completion of work, creating motivation for work, and enhancing work quality and efficiency.

 Minister of Home Affairs Pham Thi Thanh Tra presents a report on wage reform, and adjusted pension, social insurance benefits, allowances for revolution contributors and social allowances as of July 1, 2024. Photo quochoi.vn

Third, clearly regulate and guide five sources of funds to implement the wage regime, which come from the increase and surplus of localities’ funds allocated for salary reform from previous years; the Central budget; part of the revenue from professional activities; 10 per cent of the additional savings from regular expenditures; and savings from streamlined staffing.

Fourth, improve the management of wage and income mechanisms. Accordingly, clearly regulate and guide four contents, including: The authority and responsibility of the head in evaluating and classifying officials, civil servants, and public employees; the authority of the head to use the wage fund and regular expenditure fund to hire specialists, scientists, and talented people to perform the tasks of the agency and unit and to decide on the level of income payment associated with the assigned tasks; expand the pilot of additional wages for localities that have balanced the budget on their own; the wage and income management mechanism is in line with the allocated state budget and the revenue of the public non-business agencies.

With two out of six contents of wage reform in the public non-business sector, including the new wage tables (removing the basic wage and wage coefficient); which are scheduled to be restructured and rearranged into nine new allowance regimes, the reform indicates that due to many shortcomings, it is necessary to continue to study and improve gradually and carefully; at the same time, it is significant to consider revising or abolishing many current regulations related to the basic wage.

The Government proposes solutions to increase wages in the public sector from July 1, 2024  during the time when it is not yet possible to abolish the basic wage and wage coefficient: Adjust the basic wage from the current VND1.8 million to VND2.34 million per month (up 30 per cent); study, revise, and supplement allowances and some specific regimes of the armed forces and officials, civil servants, and public employees in some specialised fields that report the unreasonableness during the implementation process; and preserve wages and incomes for agencies and units that are currently applying a special financial and income mechanism.

In addition, increase pension and social insurance allowance by 15 per cent; concurrently, for those who are receiving pensions set before 1995, with the monthly pension still lower than VND3.2 million after adjustment, they will enjoy an increase of VND0.3 million per month; and those who have the monthly pension from VND3.2 million to under VND3.5 million, the monthly pension will be adjusted to VND3.5 million. The social allowance for revolution contributors will be adjusted according to the standard allowance level to increase from VND2.055 million to VND2.789 million per month (up 35.7 per cent). The social allowance according to the standard social allowance level will be adjusted to increase from VND360,000 to VND500,000 per month (up 38.9 per cent).

According to the Minister of Home Affairs, solutions to increase salary, and adjust pension and allowances from July 1, 2024 have positive impacts which are fundamental, comprehensive, reasonable and efficient.

Resources must be stable, long-term

The review report presented by the Chairwomen of the NA Social Affairs Committee Nguyen Thuy Anh indicates that over the past time, the Government has made efforts to institutionalise Resolution 27 and related resolutions of the Party.

On the basis of the difficulties and shortcomings identified in the full and synchronous implementation of wage reform in the public sector in accordance with Resolution 27, the Social Affairs Committee agrees with the view that it is necessary to implement wage reform and related policies in a suitable roadmap, step by step, cautiously, and firmly, ensuring feasibility, effectiveness, and in line with the affordability of the state budget.

 Chairwoman of NA Social Affairs Committee Nguyen Thuy Anh

The Social Affairs Committee noted that the Government’s proposals in wage increase, and pension and allowance adjustment as of July 1, 2024 have basically followed the instructions of the Politburo in Conclusion No 83-KL/TW. Accordingly, it is necessary to implement two contents of wage reform in the enterprise sector; and four out of six contents of wage reform in the public sector. Currently, the Government is determined to actively issue documents to ensure the implementation of these contents from July 1, 2024.

However, with new and complex issues, the Government needs to soon issue specific guiding documents, especially for the regulation on supplementing the bonus fund which is equal to 10 per cent of the basic wage fund and on assigning the head to build the bonus regulations associated with the performance of the subjects under their management and “avoid duplication with the regulations of the Law on Emulation and Commendation” as stated in Conclusion No 83-KL/TW.

For the two out of six contents of wage reform in the public sector that have not been implemented, namely the establishment of a new wage table and the restructuring into nine types of allowances according to the requirements of Resolution No 27, the Social Affairs Committee and the Standing Committee of the Finance and Budget Committee basically agreed to the implementation of three solutions to increase wage in the public sector from July 1, 2024 as shown in the Government’s report.

“Regarding the adjustment of the basic wage from VND1.8 million to VND2.34 million per month, the Social Affairs Committee believes that this is a remarkable increase in the process of wage adjustment, contributing to improving the living standards of wage earners and labour productivity as well as work efficiency,” said Nguyen Thuy Anh. 

However, according to the Social Affairs Committee chairman, along with the increase in the basic wage, the Government should have solutions to ensure resources for a stable, long-term, and effective implementation of policies; and strengthen the implementation of measures for price management and inflation control, ensuring the average CPI growth target in 2024 and the entire 2021-2026 period assigned by the National Assembly./.