From July 1, the highest salary for social insurance contribution can be nearly 100 million VND.

At the end of 2023, the Wage Council met and decided to increase the regional minimum wage. The expected increase is 6%, equivalent to VND 200,000-280,000/month compared to the current level. The draft Decree regulating the regional minimum wage is being consulted with relevant ministries and branches before being submitted to the Prime Minister for decision.

According to this plan, region I salary will increase to 4.96 million VND; region II will be 4.41 million VND; region III will be 3.86 million VND and region IV will reach 3.45 million VND.

When the regional minimum wage increases, the salary used as the basis for unemployment insurance (UI) contributions will also increase depending on the applicable area.

According to the provisions of the 2013 Law on Employment, the salary for paying unemployment insurance is also the salary used as the basis for paying compulsory social insurance according to the provisions of the 2014 Law on Social Insurance, however there are differences between the state sector and the enterprise sector.

In particular, for employees subject to the salary regime prescribed by the State, the maximum contribution level for cases where the monthly salary for unemployment insurance contribution is higher than 20 times the basic salary, is equal to 20 times the basic salary at the time of unemployment insurance contribution.

For employees paying unemployment insurance according to the salary regime decided by the employer, the maximum contribution level for cases where the monthly salary for paying unemployment insurance is higher than 20 times the regional minimum wage is equal to 20 times the regional minimum wage according to the provisions of the Labor Code, at the time of paying unemployment insurance.

Thus, for employees in the enterprise sector, it is expected that from July 1, the maximum unemployment insurance contribution salary for each region will be as follows: Region I is 99.2 million VND; Region II is 88.2 million VND; Region III is 77.2 million VND; Region IV is 69 million VND.

In addition, based on Clause 1, Article 57 of the 2013 Law on Employment, the unemployment insurance contribution rate is stipulated as follows: Employees contribute 1% of monthly salary; employers contribute 1% of monthly salary fund of employees participating in unemployment insurance.

The State supports up to 1% of the monthly salary fund for unemployment insurance contributions of employees participating in unemployment insurance and is guaranteed by the central budget.

However, in the spirit of Resolution No. 27 of the Central Committee, when implementing salary policy reform, "the current basic salary and salary coefficient will be abolished, and a new salary regime will be established, in which the basic salary is equal to the specific amount in the new salary table".

Thus, from July 1, when implementing salary policy reform, a number of issues will arise related to the draft revised Law on Social Insurance.

From July 1 until the bill is expected to be passed in 2025, the Standing Committee of the Social Affairs Committee recommends that the Government should fully review and report, propose amendments and supplements, including regulations on replacing the existing "basic salary" in many relevant legal documents, decrees and circulars. If the salary calculation method based on the basic salary is removed, the salary base for paying unemployment insurance will be lost.

In the immediate future, the Standing Committee of the Social Affairs Committee plans to stipulate that the regulations related to the basic salary level will be regulated in the direction of "the benefit level not being lower than the most recent current benefit level before this Law takes effect".

Spending on salary reform 470 trillion VND

The National Assembly voted to pass the Resolution on the State budget estimate for 2024, including the content on implementing salary policy from July 1, 2024.

The total central budget for salary reform is expected to be about 132 trillion VND; the accumulated local budget is about over 430 trillion VND.

Thus, the budget has allocated 562 trillion VND to ensure sufficient implementation of synchronous salary policy reform from July 1, 2024 according to Resolution 27/2018 of the 12th Central Committee on salary policy reform for cadres, civil servants, public employees, armed forces and employees in enterprises.

According to the Government's calculations, to implement salary reform, the total expected additional budget demand from the budget in the 2024-2026 period is more than VND499 trillion. Of which, the expenditure for salary reform is VND470 trillion, pension adjustment is VND11.1 trillion and preferential allowance for meritorious people is VND18 trillion.

Minh Hoa (t/h)

Source