Question 78. Under the labour law, is the Employer obliged to annually adjust the salary scale and table applied to the Employee? What is the minimum gap between two successive pay grades?


1. Annual adjustment to increase the salary scale and table applied to the Employee

Pursuant to the labour law, the Employer is not required to periodically review to amend and supplement salary scale and table. However, amendment and supplement of the salary scale and table after the period shall be considered sensible and essential. When the Employer needs to amend or supplement the salary scale and table, the Employer is recommended to consider some elements such as: (i) actual conditions for technological innovation; (ii) production and labour organisation; (iii) salary levels in the labour market; and (iv) ensuring compliance with labour law. In fact, because the area minimum wages are adjusted by the Government on an annual basis, the salary scale and table shall also be reviewed and adjusted accordingly by the Employer, except for the lowest salary grade in the salary scale and table which is still higher than the new area minimum wage set out by the Government.

2. Minimum gap between two successive salary grades

For the purpose of encouraging the Employee to improve his or her professional and technical qualifications, accumulate experience, develop his or her talents, the Employer should stipulate the gap between the two successive salary grades. However, since the Labour Code does not regulate the minimum rates, the Employer may formulate such gap but must consult the organisations representing employees at the grassroots level at the enterprise having such organisations[1].

[1] Article 93.1 of the Labour Code