When starting out, many businesses often overlook this: build a salary scaleThis is a mandatory requirement under the law and an effective human resource management tool. Failure to comply can lead to many unnecessary legal risks. This article will guide you step-by-step in building an easy-to-understand and easy-to-apply salary scale.
I. What is a salary scale?
A salary scale is a system of salary levels divided into several tiers, applied to each job title or group of jobs within a company, used as a basis for negotiating salary in contracts and paying wages to employees.
A payroll is a summary of the actual amounts paid to employees, including basic salary, allowances, bonuses, subsidies, etc., over a specific period.
II. Why are salary scales mandatory for businesses?
- Legal regulations: Article 93 Labor Code 2019 It requires all businesses employing workers to establish a salary scale.
- Better human resource management: A basis for salary payments, salary increases, rewards, and disciplinary actions.
- Avoid legal risks: Businesses can be fined between 5 and 20 million VND by labor inspectors if they do not have a wage scale.
- Motivating employees: Employees see a clear path to salary increases and promotions.
III. Principles when constructing salary scales
When constructing a salary scale, businesses need to pay attention to the following principles:
- The law does not limit the maximum number of salary grades, but at least two grades must be established to incentivize employees to receive salary increases. Typically, businesses establish between 5 and 15 salary grades.
- Lowest level (level 1): Must not be below the regional minimum wage.
- Fair and just: Higher positions should have higher salaries.
- Employee input is sought: If the company has a labor union or collective labor representative body.
- Transparency and openness: Post the relevant information at the workplace before implementation.
IV. Steps to build a salary scale
➡️ Step 1: Determine the regional minimum wage
According to Decree 74/2024/ND-CP, the regional minimum wage for 2025 is:
|
Region |
monthly minimum wage |
minimum hourly wage |
|
I |
4,960,000 đ |
23,800 đ |
|
II |
4,410,000 đ |
21,200 đ |
|
III |
3,860,000 đ |
18,600 đ |
|
IV |
3,450,000 đ |
16,600 đ |
👉 The lowest level in the salary scale must be equal to or higher than the levels above.
➡️ Step 2: List job titles
The job title is the name of each position In a business, job titles are linked to specific tasks and responsibilities. Listing job titles can be based on these criteria. Business organizational structure or actual operationAny job that has employees must have a job title in the salary scale.
Examples: Director, Department Head, Accountant, Salesperson, General Laborer…
➡️ Step 3: Establish salary scales for each job title
- Each job title should have 2 to 7 levels (depending on the size of the organization).
- Businesses have the right to determine the salary difference between different salary levels based on their economic situation.
➡️ Step 4: The business director issues the Decision to promulgate the document.
The decision must be signed, stamped, and attached with the salary scale.
➡️ Step 5: Consult with the employee representative organization within the company.
➡️ Step 6: Publicize the salary scale at the workplace before implementation.
➡️ Step 7: File the records at the company.
To facilitate inspections at the enterprise, please submit the following documents when an inspection is conducted:
- Salary scale system;
- Decision issued;
- Minutes of the employee consultation (if any);
- Table of regulations specifying the standards and conditions for applying for job titles.
V. Do businesses have to register their salary scales?
Before: Businesses must submit registration documents to the Department of Labor, War Invalids and Social Affairs.
Currently: No further registration is required. Businesses simply need to create, issue, and maintain records at the company. When labor inspectors arrive for an inspection, presenting these records will be considered valid.
VI. Some important notes
- If the company changes its size, structure, or salary levels, or if the government mandates changes to the minimum wage, the business needs to... Update the salary scale..
- The method can be applied. 3P Salary (Position – Person – Performance) If you want modern management.
In summary, salary scales are not only a requirement to comply with the 2019 Labor Code but also a management tool that helps standardize compensation, create motivation, and reduce legal risks. Businesses need to update starting salary levels according to the current regional minimum wage, make them publicly available internally, and maintain complete records. A well-structured roadmap—standardizing job titles, designing salary levels based on competence/performance, issuing and controlling implementation—will optimize personnel costs and enhance long-term competitiveness.