Regional Minimum Wage in 2024: How Much Will it Increase? When Will the 2024 Regional Minimum Wage Apply?
How much will the regional minimum wage increase in 2024? When will the 2024 regional minimum wage be applied?
On the morning of December 20, the National Wage Council held its second meeting of 2023 to discuss and negotiate the plan to adjust the regional minimum wage for 2024.
Speaking at the conclusion of the meeting, after listening to the opinions of the relevant parties, Mr. Le Van Thanh, Deputy Minister of Labor, Invalids and Social Affairs, Chairman of the National Wage Council, stated that all members of the National Wage Council present at the meeting had voted to approve a 6% increase in the regional minimum wage for 2024, with the implementation period starting from July 1, 2024.
With this increase in the regional minimum wage, the Vietnam General Confederation of Labor will continue to promote and encourage workers to enhance productivity, together with businesses overcoming difficulties.
Thus, the National Wage Council has unanimously agreed on a 6% increase in the regional minimum wage for 2024, with the implementation period starting from July 1, 2024, to submit to the competent authorities, from which a Decree will be issued for execution.
As stated by the Deputy Minister of Labor, Invalids and Social Affairs, the new regional minimum wage (increased by 6%) will be applied from July 1, 2024. As for the regional minimum wage from January 1, 2024, to June 30, 2024, the current regulations will continue to be applied.
How much will the regional minimum wage increase in 2024? When will the 2024 regional minimum wage be applied?
What are the wage reform contents regarding the regional minimum wage according to Resolution 27?
Point a, clause 3.2, Section II of Resolution 27/NQ-TW of 2018 outlines:
Regarding wage reform contents concerning the regional minimum wage, it states:
Wage Reform Contents
...
3.2. For employees in enterprises
a) Regarding the regional minimum wage
- Continue to improve policies on regional minimum wages on a monthly basis; supplement regulations on hourly regional minimum wages to enhance the coverage of the minimum wage and meet the flexibility of the labor market.
- Adjust the regional minimum wage to ensure the minimum living standards of employees and their families, considering the relationship with labor market factors and socio-economic development (labor supply-demand, economic growth rate, consumer price index, labor productivity, employment, unemployment, and businesses' payment capacity, etc.).
- Strengthen the functions, tasks, and organizational structure of the National Wage Council; add independent experts to participate in the Council.
Thus, the adjustment of the regional minimum wage according to wage reform is implemented as stated above.
How is the current regional minimum wage regulated? Who does it apply to?
According to clause 1, Article 3 of Decree 38/2022/ND-CP, the regional minimum wage is regulated as follows:
- Specifies the regional minimum wage by month and by hour for employees working for employers as follows:
| Region | Monthly Minimum Wage
(Unit: VND/month) | Hourly Minimum Wage
(Unit: VND/hour) || --- | --- | --- || Region I | 4,680,000 | 22,500 || Region II | 4,160,000 | 20,000 || Region III | 3,640,000 | 17,500 || Region IV | 3,250,000 | 15,600 |
- The list of areas classified into Regions I, II, III, IV is specified in the appendix issued with Decree 38/2022/ND-CP.
The minimum wage is the lowest wage paid to employees doing the simplest jobs under normal working conditions to ensure the minimum living standards of employees and their families, in line with socio-economic development conditions.
What is the specific roadmap for wage reform from 2021 to 2025 and the vision to 2030?
Resolution 27-NQ/TW of 2018 sets out specific goals for wage reform from 2021 to 2025 and the vision to 2030 as follows:
* For the public sector
- From 2021, apply a unified new wage policy for officials and public employees and armed forces across the entire political system.
- In 2021, the lowest wage of officials and public employees will be equal to the average minimum wage of all enterprise regions.
- Periodically raise wages in line with the consumer price index, economic growth rate, and state budget capacity.
- By 2025, the lowest wage of officials and public employees will be higher than the average minimum wage of all enterprise regions.
- By 2030, the lowest wage of officials and public employees will be equal to or higher than the minimum wage of the highest enterprise region.
* For the enterprise sector
- From 2021, the State periodically adjusts the regional minimum wage based on the recommendations of the National Wage Council. Enterprises will implement wage policies based on negotiation and agreement between employers and employees and representatives of collective employees; the State does not directly intervene in enterprise wage policies.
- Manage labor and wages in state enterprises through the method of cost-based wage contracting linked to business tasks until 2025 and progressively move towards task-based business contracting by 2030.
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