Establishing salary scales and payrolls for employees is one of the most important aspects of human resource management. However, in practice, many enterprises still have difficulties in defining the concept, distinguishing between salary scales and payrolls, as well as understanding the relevant legal grounds. The article below provides a comprehensive analysis of legal regulations and common practical issues to help enterprises properly understand and effectively implement salary scale and payroll system structures for employees.

I. Current situation regarding the establishment of salary scales and payrolls for employees

In practice, the establishment of salary scales and payrolls for employees in many enterprises has not been completed systematically or in compliance with legal regulations. Many enterprises, especially small and medium-sized enterprises, establish salary scales and payrolls merely for formal compliance purposes when inspected by authorities, rather than based on job analysis, employee competency, or labor market conditions.

Many enterprises also confuse salary scales with payrolls or fail to regularly review and update them when there are changes in legal policies or organizational structures. It not only affects employees’ rights and benefits but also creates potential risks of violating labor regulations, especially during labor inspections and audits.

Moreover, some enterprises fail to integrate salary scales and payrolls with employee performance evaluation systems, resulting in unfair salary payment practices and difficulties in motivating and retaining employees. In the context of increasingly competitive labor markets, building a reasonable, transparent, and legally compliant salary scale and payroll system has become an urgent requirement for enterprises. 

II. Concept of establishing salary scales and payrolls for employees

1. What is the establishment of salary scales and payrolls for employees?

Establishing salary scales and payrolls for employees is the process by which an enterprise creates a structured salary system divided into salary grades, job positions, or groups of titles, serving as the basis for salary payment, recruitment, salary increases, and personnel management in a transparent and reasonable manner. Building a salary scale and payroll is not merely arranging salaries in a gradual increasing system but must also be based on various factors such as job characteristics, professional qualifications, experience, work performance, and the financial capability of the enterprise.

In essence, establishing salary scales and payrolls for employees forms an important foundation that enables enterprises to manage wages effectively, motivate employees, and minimize legal risks during operations.

2. What is the difference between a salary scale and a payroll?

Salary scales and payrolls are closely related concepts but are not identical within an enterprise’s wage structure.

A salary scale is a system of salary grades arranged in increasing order, reflecting the development of employees’ qualifications, experience, or seniority within the same group of jobs or positions. Each grade within the salary scale corresponds to a specific salary level and serves as the basis for salary increases based on time or competency.

Meanwhile, a payroll is the practical implementation of the salary scale for each position, title, or group of jobs within the enterprise. The payroll clearly specifies the salary applicable to each title, thereby helping enterprises manage and pay salaries in practice.

In other words, a salary scale provides the framework and orientation for salary grades, whereas a payroll provides detailed salary application for each job position within the enterprise.

3. What factors affect the establishment of salary scales and payrolls?

The establishment of salary scales and payrolls for employees is influenced by several main factors:

  • Nature and value of the work: The more complex the work and the higher the level of responsibility and expertise required, the higher the salary should be to accurately reflect the value of the position.
  • Employees’ qualifications and experience: Employees with stronger capabilities and more experience are often placed at higher salary grades, thereby encouraging professional development.
  • Financial capability of the enterprise: Enterprises must balance salary funds appropriately to ensure stable business operations.
  • Legal regulations and labor market conditions: Salary levels must not be lower than the regional minimum wage prescribed under Clause 1, Article 3 of Decree No. 293/2025/NĐ-CP, and should also consider market salary standards to maintain competitiveness.

III. Legal regulations related to the establishment of salary scales and payrolls for employees

1. Basis for establishing salary scales and payrolls for employees

The establishment of salary scales and payrolls for employees must be based on the following legal and practical grounds:

  • Labor law regulations: Pursuant to Clauses 1 and 3, Article 93 of the Labor Code 2019, employers are responsible for establishing salary scales and payrolls and must consult the employees’ representative organization at the grassroots level (if any) before issuance.
  • Minimum wage regulations: Pursuant to Clause 1, Article 91 of the Labor Code 2019, the lowest salary level in the salary scale and payroll must not be lower than the minimum wage prescribed by the Government under Clause 1, Article 3 of Decree No. 293/2025/NĐ-CP.
  • Nature of work and working conditions: Enterprises must classify jobs according to complexity, responsibility, and working conditions in order to determine appropriate salary grades.
  • Collective labor agreements and labor regulations: Salary scales and payrolls must be consistent with the enterprise’s internal regulations and collective labor agreements.

2. What procedures must enterprises follow when amending or supplementing salary scales and payrolls?

When amending or supplementing salary scales and payrolls, enterprises must implement the following procedures:

  • Consulting the employees’ representative organization: Pursuant to Clause 3, Article 93 of the Labor Code 2019, before issuing or amending salary scales and payrolls, enterprises must consult the employees’ representative organization at the grassroots level.
  • Public disclosure at the workplace: The amended salary scales and payrolls must be publicly announced so that employees are informed and able to supervise implementation.
  • Retention and internal application: Enterprises are no longer required to register salary scales and payrolls with State authorities, but they must retain them for inspection purposes when necessary.

3. Is it mandatory to establish separate salary scales and payrolls for each position or job title?

Current labor laws do not require enterprises to establish separate salary scales and payrolls for each individual title or job position. Pursuant to Clause 1, Article 93 of the Labor Code 2019, enterprises have the right to proactively establish salary scales and payrolls suitable to their production and business organization.

In practice, enterprises may merge positions with similar job characteristics into the same salary scale or payroll system, provided that the structure accurately reflects the complexity, responsibility, and working conditions of each job group.

Therefore, enterprises are not required to create separate salary scales and payrolls for every title, but they must establish a reasonable salary system that ensures fairness and is suitable for actual operational conditions.

4. Must salary scales and payrolls be consistent with labor regulations and collective labor agreements?

Salary scales and payrolls must be consistent with labor regulations and collective labor agreements to ensure uniformity within the enterprise’s labor management system. Pursuant to Clause 3, Article 93 of the Labor Code 2019, when establishing salary scales and payrolls, enterprises must consult the employees’ representative organization, thereby ensuring compatibility with the agreements recorded in collective labor agreements.

Labor regulations serve as the basis for regulating labor discipline, as well as employees’ rights and obligations. Therefore, salary policies, including salary scales and payrolls, must be aligned with the enterprise’s issued labor regulations.

Accordingly, salary scales and payrolls cannot be established independently but must be consistent and synchronized with labor regulations and collective labor agreements in order to ensure legality and transparency within the enterprise.

IV. Questions related to establishing salary scales and payrolls for employees

1. Will an enterprise be sanctioned for failing to establish salary scales and payrolls?

An enterprise may be subject to sanctions if it fails to establish salary scales and payrolls in accordance with the law. Pursuant to Clause 1, Article 93 of the Labor Code 2019, employers are responsible for establishing salary scales and payrolls as the basis for salary payment. Failure to fulfill this obligation is considered a violation of labor laws. According to Point b, Clause 1, Article 17 of Decree No. 12/2022/NĐ-CP, the act of failing to establish salary scales and payrolls may result in an administrative fine ranging from 5,000,000 VND to 10,000,000 VND.

Therefore, enterprises are legally required to establish salary scales and payrolls; otherwise, they may take administrative sanctions and legal risks during operations.

2. Can an enterprise adjust salary scales and payrolls without notifying employees?

An enterprise should not adjust salary scales and payrolls without notifying employees. Pursuant to Clause 3, Article 93 of the Labor Code 2019, employers must consult the employees’ representative organization at the grassroots level, where such organization exists, when establishing salary scales, payrolls, and labor norms. Salary scales, payrolls, and labor norms must also be publicly disclosed at the workplace before implementation.

Accordingly, adjusting salary scales and payrolls without notification would not comply with the above regulations and would undermine transparency, potentially affecting employees’ rights and interests. Enterprises are not allowed to arbitrarily modify salary scales and payrolls; any amendment must be announced and publicly disclosed to ensure legal compliance and avoid labor disputes.

3. Can an enterprise hire a consulting firm to establish salary scales and payrolls?

An enterprise may absolutely hire a consulting firm to establish salary scales and payrolls for employees. Current labor laws do not prohibit such a practice and allow enterprises to proactively choose suitable implementation methods. However, it should be noted that the ultimate responsibility still lies with the enterprise. Even when using consulting services, the enterprise must ensure that the salary scales and payrolls comply with Article 93 of the Labor Code 2019, are appropriate to the enterprise’s actual operations, and are publicly disclosed at the workplace.

Therefore, enterprises may engage consulting firms to ensure professionalism, but they must still supervise and remain responsible for the legality of their salary scales and payrolls.

4. Are salary scales and payrolls related to employee performance evaluation?

Salary scales and payrolls are closely related to employee performance evaluation, although the law does not require these two elements to be directly connected. In practice, performance evaluation results (such as KPIs, competency assessments, and work completion levels) often serve as the basis for salary grade classification, salary increases, or salary adjustments within the salary scale and payroll system. It helps ensure the principle of salary payment based on productivity, quality, and work efficiency in accordance with the spirit of the Labor Code 2019.

Integrating salary scales and payrolls with performance evaluation enables enterprises to implement fair salary policies, motivate employees, and improve personnel management efficiency.

5. Is it mandatory to establish salary scales and payrolls based on industry sectors?

Current labor laws do not require enterprises to establish salary scales and payrolls based on industry sectors. Pursuant to Article 93 of the Labor Code 2019, enterprises have the right to proactively establish salary scales and payrolls suitable to their business organization and operational characteristics. However, in practice, enterprises should consider industry-specific characteristics and market salary benchmarks when building their salary systems in order to maintain competitiveness and attract as well as retain employees.

Therefore, while it is not mandatory to establish salary scales and payrolls by industry sector, considering industry factors is necessary to ensure the reasonableness and effectiveness of the salary structure.

V. Why should enterprises seek legal consultation from NPLaw regarding the establishment of salary scales and payrolls for employees?

Seeking legal consultation from NPLaw helps enterprises establish salary scales and payrolls for employees in compliance with legal regulations, minimize legal risks, and optimize wage structures. With extensive professional experience, NPLaw’s lawyers not only assist in drafting and reviewing salary systems but also provide advice on dispute resolution when necessary.

Establishing salary scales and payrolls for employees is a mandatory requirement and must be implemented in compliance with legal regulations. Enterprises should build transparent salary systems that are suitable for actual operational conditions and regularly review them in order to minimize legal risks.

The above information is for reference purposes only. Should you require detailed consultation for a specific case, please contact NPLaw Firm for immediate assistance.