Regional Minimum Wage from July 1, 2024, Will Increase by at Least VND 3,445,000/Month? How Will the Regional Minimum Wage Be Applied?
Regional Minimum Wage from July 1, 2024, to be Increased to at Least 3,445,000 VND/Month?
On the morning of December 20, the National Wage Council met and agreed on the proposal to increase the minimum wage for the year 2024.
At the end of the meeting, with the majority of votes in agreement, the National Wage Council reached a consensus on a 6% increase in the regional minimum wage for 2024, effective from July 1, 2024, to recommend to the Government of Vietnam.
If approved, with a 6% increase, the projected monthly minimum wages effective from July 1, 2024, will be as follows: Region I will increase from 4.68 million VND/month to approximately 4.96 million VND/month (an increase of 280 thousand VND); Region II will increase from 4.16 million VND/month to approximately 4.41 million VND/month (an increase of 250 thousand VND); Region III will increase from 3.64 million VND/month to approximately 3.86 million VND/month (an increase of 220 thousand VND); Region IV will increase from 3.25 million VND/month to approximately 3.45 million VND/month (an increase of 200 thousand VND).
Thus, according to the proposal agreed upon by the National Wage Council, the regional minimum wage will increase by 6% from July 1, 2024. Therefore, if approved by the Government of Vietnam, the regional minimum wage corresponding to the lowest-region wage, Region IV, will increase from 3.25 million VND/month to approximately 3.45 million VND/month (an increase of 200 thousand VND).
The expected regional minimum wage table from July 1, 2024, is as follows:
| Region | Monthly Minimum Wage
(Unit: VND/month) | Hourly Minimum Wage
(Unit: VND/hour) || --- | --- | --- || Region 1 | 4,960,800 | 23,800 || Region 2 | 4,409,600 | 21,000 || Region 3 | 3,858,400 | 18,600 || Region 4 | 3,445,000 | 16,600 |
The minimum regional wage from July 1, 2024, will be increased to at least 3,445,000 VND/month? How will the regional minimum wage be applied?
How will the regional minimum wage be implemented according to the 2024 wage reform?
Based on the provisions outlined in Section II of Resolution 27-NQ/TW of 2018 regarding the 2024 wage reform, the regional minimum wage will be as follows:
- Continuously refine policies regarding the monthly regional minimum wage;- Adjust the regional minimum wage to ensure the minimum living standards for workers and their families, taking into account labor market factors and socio-economic development (labor supply and demand, economic growth rate, consumer price index, labor productivity, employment, unemployment, and the payment ability of enterprises...);- Consolidate functions, duties, and organizational structure of the National Wage Council; include independent experts as members of the Council.
Additionally, the wage and income management mechanism for the private sector is guided as follows:
- Enterprises (including 100% state-owned enterprises) are free to decide wage policies (including wage scales, wage tables, and labor norms) and pay wages not less than the minimum wage announced by the State, based on collective labor agreements aligned with production organization, labor organization, enterprise capacity, and publicly announce it at the workplace.- The State announces the regional minimum wage by month and hour, the average wage in the market for various occupations, and supports labor market information without directly intervening in enterprise wage policies.- Enterprises and workers negotiate, agree on wages, sign labor contracts, and pay wages linked to productivity and labor results.- Enterprises and worker representative organizations negotiate, agree on wages, bonuses, and other incentivizing policies in collective labor agreements or enterprise regulations.- Enhance the role and capacity of trade union organizations and the inspection and supervision tasks of state management agencies.
How will the regional minimum wage be applied?
As per the provisions in Article 4 of Decree 38/2022/ND-CP, the regional minimum wage is applied as follows:
- The monthly minimum wage is the lowest wage base for negotiating and paying wages to workers applying monthly payment, ensuring the wage for the job or position of the worker working full standard working hours in the month and completing the agreed labor norm or tasks is not less than the monthly minimum wage.- The hourly minimum wage is the lowest wage base for negotiating and paying wages to workers applying hourly payment, ensuring the wage for the job or position of the worker working for an hour and completing the agreed labor norm or tasks is not less than the hourly minimum wage.- For workers applying weekly, daily, product-based, or package wages, the wage for these forms of payment, if converted to monthly or hourly, must not be lower than the monthly or hourly minimum wage. The wage conversion to monthly or hourly is based on standard working hours chosen by the employer as per labor law regulations as follows:+ The monthly wage conversion is by multiplying the weekly wage by 52 weeks and dividing by 12 months; or multiplying the daily wage by the normal working days in the month; or the product-based/package wage performed within normal working hours in the month.+ The hourly wage conversion is by dividing the weekly, daily wage by the normal working hours in the week, day; or the product-based/package wage dividing by the working hours in the normal working hours to produce the product, execute the task package.
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