Pay Transparency Risk: 5 Compensation Gaps MNCs Cannot Afford to Ignore in 2026

Key Takeaways

• Since July 1, 2025, Vietnam’s Employment Law 74/2025 requires companies with five or more employees to disclose salary ranges in job postings. Non-compliance is no longer a reputational risk – it carries administrative penalties under a new pay transparency law.
• Three compliance-visible gaps: undisclosed salary ranges in recruitment, a gender pay equity gap that violates both the Labor Code 2019 and the Gender Equality Law, and pay compression triggered by the 7.2% minimum wage increase effective January 2026.
• Two operational gaps that surface only after damage is done: an unbanded salary structure driving 63% of Vietnamese employees to negotiate individually rather than trust the system, and payroll errors averaging USD 500 per mistake across an estimated 200 incidents per company annually.
• Fixing all five gaps does not require redesigning the entire compensation system. It begins with a structured compensation audit, salary banding by level, and a payroll process with a clear audit trail.

Pay transparency pressure in 2026 comes from two directions at once. 74% of Vietnamese professionals rank salary transparency as their top priority when considering a career move (Reeracoen, 2025), while the new legal framework progressively mandates compensation disclosure. This article identifies each gap and the specific controls needed before risk becomes cost.

Why pay transparency in Vietnam is no longer optional in 2026

The case for pay transparency is being made simultaneously by regulators, talent markets, and global headquarters. Vietnam’s domestic legal framework now has mandatory provisions. Employee expectations have shifted faster than most HR systems can track. And MNC headquarters are pushing subsidiaries to meet OECD pay gap reporting standards ahead of local legislation. The business impact of salary structure design has never been clearer, and 2026 is the year those structural risks convert into actual costs.

Three gaps visible from the outside

These three gaps share one characteristic: regulators, job seekers, and the labor market can all detect them before the company does.

Gap 1: No salary range disclosed in job postings

Article 35 of Employment Law 74/2025 (effective July 1, 2025) requires companies with five or more employees to specify a salary amount or salary range in every job posting. This pay transparency law creates a dual exposure. 58% of candidates skip job postings that omit salary information (NetViet, 2026), meaning non-compliant companies face regulatory penalties while simultaneously shrinking their own candidate pool with every hiring cycle.

Gap 2: Gender pay equity gap without audit

Article 87 of the Labor Code 2019 and Article 15 of the Gender Equality Law 2006 (amended 2020) both prohibit pay discrimination based on gender for work of equivalent value. Market data from 2025 reveals a counterintuitive pattern: women earn a higher base salary than men by 9–16% at certain levels, yet total compensation remains 3–17% lower due to differences in bonus structure allocation (VNEconomy, Oct 2025). This is not only domestic legal exposure for MNCs, but it also creates direct friction with ESG reporting requirements from global headquarters.

Gap 3: Pay compression after the minimum wage increase

Decree 218/2025 raised regional minimum wages by 7.2% from January 1, 2026, bringing Region I (Ho Chi Minh City and Hanoi) to VND 5,310,000 per month. Companies that adjusted only the directly affected group without reviewing the full salary structure components across levels created internal compression risk. Employees with three to five years of experience now earn only 20–30% above entry-level minimum, eroding the pay differential that reflects tenure and capability. Manufacturing and garment sectors face the highest exposure, with labor cost increases estimated at 1.1–1.2% (Ministry of Home Affairs, Oct 2025).

Two gaps embedded in internal operations

Unlike the three gaps above, these two have no surface-level indicator. They manifest through behavior: rising frequency of individual pay negotiations, increasing payroll complaints, and gradual erosion of system trust.

Gap 4: No salary banding, no internal reference point

Without a defined salary band structure, employees have no basis for trusting the fairness of the system. 63% of Vietnamese professionals are actively negotiating compensation individually, and 1 in 3 describe their company’s salary structure as a “black box” (Michael Page, 2025).

“While compensation remains the top priority when looking for a new job, employees are increasingly focused on factors such as career advancement opportunities, learning and development.” – Tiêu Yen Trinh, CEO, Talentnet Corporation (Thi Truong Tai Chinh Tien Te, Feb 2024)

Companies without transparent salary bands lose the ability to manage expectations. Every annual review cycle becomes an ad hoc negotiation, generating inconsistent precedents that are costly and difficult to unwind.

Gap 5: Payroll errors with no audit trail

Ernst & Young estimates that companies average 200 payroll errors per year, at USD 500 per error (Talentnet, Aug 2025). Common errors include incorrect hours recorded, missed allowances, and wrong social insurance contribution levels. When payroll compliance processes lack a clear audit trail, companies cannot provide transparent explanations when employees flag discrepancies. The real cost is not the correction — it is the trust that cannot be recovered.

Four steps to contain risk before it becomes a real cost

All five gaps can be addressed through a sequential four-step approach without replacing the entire compensation system.

The first step is a structured compensation audit. Through salary structure and compensation consulting, companies review all current pay levels by grade, gender, and tenure against market reference data, and identify groups sitting outside a defensible range. Key metrics to examine: the share of employees below market P25, pay gaps between same-grade employees by gender, and compression ratios between adjacent levels.

The second step is building salary bands by level. Each function needs at least three to four grades with a defined floor, midpoint, and ceiling. A band spread of 50–80% between floor and ceiling is standard. Market median (P50) serves as the midpoint anchor for most roles; critical or hard-to-replace positions can be positioned at P65–P75.

The third step is controlled disclosure. In job postings, publish salary ranges per Law 74/2025. For current employees, share the band for their current grade and the criteria for advancing to the next. For leadership, provide an annual compensation equity report. The right timing is before peak hiring season and aligned with the annual salary review cycle.

The fourth step is periodic monitoring. After the government announces the next minimum wage adjustment (typically October to November each year), run a full compression check across the salary structure. After the Mercer Total Remuneration Survey is published, update the market reference data. A pay equity audit should be an annual process, not a reactive one.

Conclusion

2026 marks a turning point: pay transparency in Vietnam is now both a legal obligation and a competitive advantage in talent markets. The five gaps outlined here do not require a full system overhaul, but they do require a structured audit process, starting now. Talentnet’s HR consulting services support companies through every stage, from compensation audit to salary band design and compliant payroll processes.