From July 1, 2022, there’s no longer the regulation on region-based minimum wages paid to a skilled worker which is 7% higher than normal worker
What are the regulations on the region-based minimum wages of employees before July 1, 2022?
According to Article 5 of Decree 90/2019/ND-CP stipulating the region-based minimum wages applicable to employees working under labor contracts as follows:
"Article 5. Application of region-based minimum wages
1. The region-based minimum wages referred to in Article 3 hereof are the lowest rates used as the basis for any arrangement between enterprises and employees on salary and salary payment. The wage paid to an employee who works under normal working conditions, ensures the required monthly working hours and has fulfilled the predetermined labour productivity norm or agreed-upon duties shall:
a) not be lower than the region-based minimum wage paid to an unskilled worker who performs simplest duties; and
b) be at least 7% higher than the region-based minimum wage paid to a skilled worker as prescribed in Clause 2 of this Article.
2. The following employees are considered skilled workers:
a) Employees holding vocational certificates, vocational diplomas, professional secondary school diplomas, vocational secondary school diplomas, associate degrees, undergraduate preparatory certificates, undergraduate education degrees, bachelor's degrees, postgraduate or master's degrees, or doctoral degrees, as defined in the Government’s Decree No. 90/CP dated November 24, 1993 on framework of national education system, educational and training certificate and diploma system;
b) Employees holding certificates of graduation from professional secondary schools, certificates of completion of vocational training courses, associate degrees, bachelor’s degrees, master's degrees, doctoral degrees, vocational education certificates or diplomas, undergraduate education diplomas, or continuing education diplomas or certificates as regulated in the Law on Education in 1998 and the Law on Education in 2005;
c) Employees holding certificates of completion of continuing vocational education programs, primary-level vocational training certificates, diplomas granted by vocational secondary schools or vocational training colleges, or certificates of completion of vocational training programs according to vocational training agreements as regulated in the Law on Vocational Training;
d) Employees holding national vocational skill certificates as regulated in the Law on Employment;
dd) Employees holding primary-, intermediate- or advanced-level vocational education certificates or diplomas, certificates of completion of continuing training programs or other vocational training programs as regulated in the Law on Vocational Education;
e) Employees holding certificates of graduation from higher education programs as regulated in the Law on Higher Education;
g) Employees holding diplomas or certificates awarded by foreign training institutions;
h) Employees who have successfully completed vocational training programs provided by enterprises or self-taught and are arranged by enterprises to job positions holders of which must be skilled workers.
3. When applying the region-based minimum wages prescribed herein, enterprises are not allowed to eliminate or cut back on wages paid to employees who work overtime, night shifts, or work in hazardous and arduous working conditions, perquisites for holders of hazardous and arduous working positions and other benefits as regulated in the Labour Code. Other allowances, supplemental pay, subsidies or bonuses decided by enterprises shall be paid according to terms and conditions of the signed labour contracts, collective labour agreements or statutes of enterprises.
Other allowances, supplements, subsidies and bonuses prescribed by the enterprise shall comply with the agreement in the contract.
Thus, according to current regulations, from July 1, 2022, there’s no longer the region-based minimum wage paid to a skilled worker which is 7% higher than normal worker
From July 1, 2022, there’s no longer the region-based minimum wage paid to a skilled worker which is 7% higher than normal worker
From July 1, 2022, what are the regulations on the region-based minimum wages in Vietnam?
According to Article 4 of Decree 38/2022/ND-CP stipulating the region-based minimum wages for employees working under labor contracts as follows:
Article 4. Application of statutory minimum wages
1. The statutory minimum wage per month is the minimum wage used as the basis for any agreement between employers and employees on monthly salary and payment thereof. The job- or position-based salary of an employee who ensures the monthly normal working hours and has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per month.
2. The statutory minimum wage per hour is the minimum wage used as the basis for any agreement between employers and employees on hourly salary and payment thereof. The job- or position-based salary paid for every working hour to an employee who has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per hour.
3. In case an employee receives a weekly or daily salary, a piece-rate pay or a fixed pay, the wages paid to the employee, when converted into monthly or hourly salary, shall not be lower than the statutory minimum wage per month or per hour. The normal working hours-based converted monthly or hourly salary shall be subjected to the employer’s decision in accordance with regulations of law. To be specific:
a) The converted monthly salary shall equal the product of the weekly salary and 52 weeks divided by 12 months; or the daily salary multiplied by total normal working days in a month; or the piece-rate pay or fixed pay for the works performed during normal working hours in a month.
b) The converted hourly salary shall equal the weekly or daily salary divided by the normal working hours in a week or a day respectively; or the piece-rate pay or fixed pay divided by the working hours, considered as normal working hours, spent for producing a predetermined quantity of products or performing assigned works.
Thus, according to the new regulations, there is no longer a requirement that the region-based minimum wages of skilled workers is 7% higher than wages for workers working in normal conditions as before.
What are the regulations on the effect of the new region-based minimum wages in Vietnam?
According to Article 5 of Decree 38/2022/ND-CP, the effective implementation of this Decree is as follows:
"Article 5. Effect and responsibility for implementation
1. This Decree comes into force from July 01, 2022.
2. The Government’s Decree No. 90/2019/ND-CP dated November 15, 2019 shall cease to have effect from the effective date of this Decree.
3. Employees shall review and make appropriate modifications to their agreements in employment contracts, collective bargaining agreements as well as other regulations and rules; are not allowed to cut or reduce any overtime pay, nightshift pay, perquisites and other benefits paid to employees as prescribed by the Labour Code. Agreements or commitments under employment contracts, collective bargaining agreements or other lawfully concluded agreements that are more advantageous to employees than the provisions of this Decree shall remain valid, unless otherwise agreed upon between the parties.
Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of provincial People’s Committees and employers are responsible for the implementation of this Decree./."
Thus, Decree 38/2022/ND-CP new regulations on region-based minimum wages take effect from July 1, 2022.
Decree 38/2022/ND-CP takes effect from July 1, 2022.
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