Ho Chi Minh City to review public sector salary hike

For the second quarter this year, departments, agencies and district-level authorities in Ho Chi Minh City will not have to evaluate the performances of their civil servants in order to apply the raise as was done since April last year, Chairman Nguyen Thanh Phong said.

The city had already planned to spend VND7.2 trillion ($310 million) raising salaries for public workers.

It was decided last year that HCMC, the biggest in Vietnam, could use its autonomy to raise the monthly income for employees who have completed their tasks well. The increase had been set at 0.6 times last year, 1.2 times this year and 1.8 times next year.

The performance of each individual will be evaluated by themselves, their colleagues and their superiors to see if they qualify for the raise.

Salaries are calculated by multiplying a basic wage, which will stay at VND1.49 million after a 7.2 percent hike from July 1, with a coefficient determined by qualification and experience.

However, the city leadership now says they need time to review the conditions to decide who will get the pay hike.

In the first quarter this year, 130,000 out of 140,200 public workers in HCMC had received the pay raise.

HCMC, home to 13 million people, is the biggest source of revenue for the country. It posted revenues of nearly VND380 trillion ($16.3 billion) last year, up 8.65 percent from 2017, according to official government data.

Vietnamese legislators in 2017 agreed to give the city more administrative autonomy so that it could continue leading the development race. This allows the city to fix salaries for industry experts and scientists, and raise salaries in the public sector as it sees fit. The decision also gives it greater powers in land management, investment and the use of its finances, which normally require approval from the government.

Nguyen Thien Nhan, Secretary of the HCMC Party Committee, said at a meeting last year that the city has a large population and each government worker has to serve up to 700 residents compared to the national average of 350, and raising salary is a way to boost public workers' productivity and allow them to better serve local residents and businesses.

Le Thanh Liem, Vice Chairman of the city People's Committee, told that meeting that official data for 2013-17 showed that public workers in the city are 1.5 times more productive than their counterparts elsewhere and it is not fair for them to be paid the same.

Vietnam's average income last year was $2,587.