Increasing wages is one of the blows to boost work morale and work efficiency for employees that businesses are implementing. So, is it necessary to renew the labor contract for a salary increase? Let us learn about this topic with LSX law firm as follow:
Is it necessary to renew the labor contract for a salary increase?
According to the provisions of Clause 1, Article 21 of the Labor Code 2019; the contents of a labor contract include:
a) Name and address of the employer and full name and title of the person entering into the labor contract on the employer’s side;
b) Full name, date of birth, gender, place of residence, number of citizen identification card; identity card, or passport of the person entering into the labor contract on the employee’s side;
c) Work and place of work;
d) The term of the labor contract;
dd) Salary according to job or title, a form of salary payment; the time limit for salary payment, salary allowance, and other additional amounts;
e) The mode of promotion, salary increase;
g) Working time and rest time;
h) Provide labor protection equipment for employees;
i) Social insurance, health insurance, and unemployment insurance;
k) Training, fostering, and improving professional qualifications and skills.
Thus, salary is one of the primary contents of an employment contract. Suppose there are any changes related to salary or other contents of the labor contract. In that case, the enterprise must do the following based on the provisions of Article 33 of the Labor Code 2019:
– Notify the other party at least 03 working days in advance of the contents that need to be amended or supplemented.
– The amendment and supplementation of the labor contract shall be carried out by signing an appendix to the labor contract or concluding a new labor contract.
Thus, in the case of wanting to increase wages for employees, depending on the situation; the two parties can choose to sign an addendum to the contract or sign a new labor contract.
* For the signing of an appendix to the labor contract
According to the provisions of Article 22 of the Labor Code 2019; the Labor Contract Appendix is a part of the labor contract and has the same effect as the labor contract.
When changing the content of the terms of the employee’s salary by the appendix to the labor contract; the enterprise must also specify the content of the change (how much is the new salary) and the time of application.
* For the signing of a new labor contract
When signing a labor contract, the enterprise will have to carry out many detailed procedures related to contract form, contract content, the authority of the person signing the agreement, etc. Signing a contract addendum is relatively simple.
Thus, the salary increase for employees is not required to sign a new labor contract. Whether signing a new contract or just signing a contract appendix depends on the actual situation and regulations of the enterprise.
When an enterprise signs an addendum to a salary increase contract, it is necessary to note some of the following principal contents:
– Because the Contract Addendum is an integral part of the Contract, the Contract Addendum will also comply with the exact provisions as the Contract on making it in writing, notarization, and actual position (if any). …
– The content of the contract appendix must be based on the original labor contract, so the content of the contract appendix must not be contrary to the contract content and not violate the law’s prohibitions.
Subjects participating in signing the contract appendix must have total civil act capacity and proper competence. At the same time, the signing must be based on the principle of voluntary agreement.
Finally, hope this article about Is it necessary to renew the labor contract for a salary increase? is helpful for you!
A labor contract is a binding legal agreement that establishes the rules and regulations that will govern the relationship between an employer and an employee.
Once both parties have obtained and read over a labor contract, they must sign and date it to indicate they understand its terms. Both parties obtain a copy of the signed deal before actual work begins. Once a labor contract is signed, it puts everything into motion. Those who veer from the agreement can be found in “breach” of the contract and subject to fines.