Regional Minimum Wage from July 1, 2024: How Much Will It Increase in Different Regions? Will Employees Get a Salary Raise When Regional Minimum Wage Increases?
How much will the regional minimum wage increase from July 1, 2024? Will employees' salaries increase when the regional minimum wage increases?
On June 21, 2024, the Political Bureau issued Conclusion No. 83-KL/TW in 2024 on wage reform; adjustment of pensions, social insurance benefits, privileges for people with meritorious services, and social benefits effective from July 1, 2024.
The Political Bureau concluded the wage reform content according to Resolution No. 27-NQ/TW in 2018 for the enterprise sector as follows:
Implement the following 2 contents fully:
(1) Adjust the regional minimum wage (monthly and hourly) according to the provisions of the 2019 Labor Code (increasing by 6% compared to 2023), applicable from July 1, 2024.
(2) Prescribe the wage mechanism for state-owned enterprises according to the contents of Resolution 27-NQ/TW in 2018, applicable from January 1, 2025, to align with the financial year of the enterprise.
The regional minimum wage (monthly and hourly) currently applicable according to Clause 1, Article 3 of Decree No. 38/2022/ND-CP is as follows:
| Area | Minimum monthly wage
(Unit: dong/month) | Minimum hourly wage
(Unit: dong/hour) || --- | --- | --- || Area I | 4,680,000 | 22,500 || Area II | 4,160,000 | 20,000 || Area III | 3,640,000 | 17,500 || Area IV | 3,250,000 | 15,600 |
Thus, the regional minimum wage (monthly and hourly) according to the provisions of the 2019 Labor Code (increasing by 6% compared to 2023), applicable from July 1, 2024, includes the following:
| Area | Minimum monthly wage
(Unit: dong/month) | Minimum hourly wage
(Unit: dong/hour) || --- | --- | --- || Area I | 4,960,800 | 23,800 || Area II | 4,409,600 | 21,000 || Area III | 3,858,400 | 18,600 || Area IV | 3,445,000 | 16,600 |
Therefore, if the salary agreed upon in the labor contract is less than the regional minimum wage as of July 1, 2024, it must be increased to comply with the new regulations.
If the agreed salary in the labor contract is equal to or higher than the increased regional minimum wage from July 1, 2024, there is no requirement to adjust the increase. In this case, employees will receive salary increases as per the labor contract policies (if any).
How much will the regional minimum wage increase from July 1, 2024? Will employees' salaries increase when the regional minimum wage increases? (Image from the Internet)
On what principles do employers pay wages?
Based on the provisions of Article 94 of the 2019 Labor Code, employers must comply with the following principles in paying wages:
- Employers must pay wages directly, fully, and on time to employees.
Where employees are unable to receive wages directly, employers may pay wages to an authorized representative of the employees.
- Employers are not allowed to restrict or interfere with the employees' right to decide how to spend their wages.
Employers must not force employees to spend their wages on purchasing goods or using services provided by the employers or certain designated units.
When is the payment period for employee wages?
According to the provisions of Article 97 of the 2019 Labor Code, the rules are as follows:
Payment period for wages
1. Employees paid by the hour, day, or week are paid after the working hour, day, or week; otherwise, according to the agreement between the parties but no later than once every 15 days.
2. Employees paid monthly are paid once a month or half a month. The payment time is agreed upon by the parties and must be fixed to a recurring date.
3. Employees paid by product or contract receive wages according to the agreement between the parties; if it takes several months to complete the work, the wages must be advanced monthly according to the amount of work done during that month.
4. If due to force majeure, the employer has tried every way to pay wages on time but still cannot, the payment delay cannot exceed 30 days; if wages are delayed for 15 days or more, the employer must compensate the employee with an amount of at least equal to the delayed wage amount calculated at the one-month deposit interest rate announced by the bank at which the employer opens the wage payment account for employees at the time of payment.
Therefore, depending on whether employees receive wages by the hour, day, week, or month, or by product or contract, the wage payment period is determined as follows:
- For employees paid by the hour, day, week: Wages are paid after the working hour, day, or week; otherwise, according to the agreement between the parties but no later than once every 15 days.
- For employees paid monthly: Wages are paid once a month or half a month. The payment time is agreed upon by the parties and must be fixed to a recurring date.
For employees paid by product or contract: Wages are paid according to the agreement between the parties; if it takes several months to complete the work, wages must be advanced monthly according to the amount of work done during that month.
Additionally, if due to force majeure the employer has tried every way to pay wages on time but still cannot, the payment delay cannot exceed 30 days;
If wages are delayed for 15 days or more, the employer must compensate the employee with an amount at least equal to the delayed wage amount calculated at the one-month deposit interest rate announced by the bank where the employer opens the wage payment account for employees at the time of payment.
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