Vietnam: 08 benefits that employees can enjoy when the regional minimum wage increases from July 1, 2022?
- Will employees get a raise in their monthly salary in Vietnam?
- Will employees get an increase in their suspension pay in Vietnam?
- Will employees get a raise in the minimum wage when changing jobs in Vietnam?
- Will the value of compensation for damage that workers must compensate for increase in Vietnam?
- Will the social insurance premium increase according to the new regional minimum wage in Vietnam?
- Will the social insurance premium increase according to the regional minimum wage in Vietnam?
- What is the maximum unemployment benefit workers can get in Vietnam?
- What will the monthly pension of employees paying compulsory social insurance change from July 1, 2022 in Vietnam?
Will employees get a raise in their monthly salary in Vietnam?
According to the provisions of Article 90 of the Labor Code 2019 of Vietnam:
- A salary is an amount the employer pays the employee under an agreement for a work performed by the latter. Salary equals (=) base salary plus (+) allowances and other additional amounts.
- The base salary must not fall below the statutory minimum wages.
Will employees get an increase in their suspension pay in Vietnam?
According to Clauses 2 and 3, Article 99 of the Labor Code 2019 states:
- If the suspension is at the employer’s fault, the employee shall be paid the full salary under the employment contract;
- If the suspension is at the employee’s fault, the employee shall not receive the salary. If this leads to suspension of work of other employees in the same unit, they shall be paid an amount not smaller than the statutory minimum wages;
- In case the suspension is caused by an electricity or water supply issue that is not at the employer’s fault, or by a natural disaster, fire, major epidemic, hostility, relocation requested by a competent authority, or for economic reasons, both parties shall negotiate the salary as follows:
+ If the suspension does not exceed 14 working days, the salary shall not fall below the statutory minimum wages;
+ If the suspension is longer than 14 working days, the salary shall be negotiated by both parties and the salary for the first 14 days must not fall below the statutory minimum wages.
Thus, if the work has to be stopped due to the fault of another employee, the employee will be paid at least equal to the regional minimum wage or because of electricity or water problems, natural disasters, fires, dangerous epidemics, etc. workers will be paid in the first 14 days of receiving wages at least equal to the regional minimum wage.
Vietnam: 08 benefits that employees can enjoy when the regional minimum wage increases from July 1, 2022?
Will employees get a raise in the minimum wage when changing jobs in Vietnam?
According to Clause 3, Article 29 of the Labor Code 2019 stipulates:
- The reassigned employee will receive the salary of the new work. If the new salary is lower than the previous salary, the previous salary shall be maintained for 30 working days. The new salary shall be at least 85% of the previous salary and not smaller than the minimum wages.
Thus, when an employee moves to a job other than the labor contract, he/she will be paid according to the salary according to the new job not lower than the minimum wage.
Will the value of compensation for damage that workers must compensate for increase in Vietnam?
Clause 1, Article 129 of the Labor Code 2019 provides:
- An employee who causes damage to equipment or otherwise damages the employer’s assets shall have to pay compensation in accordance with labor laws or the employer’s internal labor regulations.
- In case the damage caused by an employee is not serious, not deliberate and is worth less than 10 months’ region-based minimum wage announced by the Government, the employee shall have to pay a compensation of not more than his/her 03 months’ salary, which shall be monthly deducted from his/her salary in accordance with Clause 3 Article 102 of this Code.
- An employee who loses the employer’s equipment or assets, or consumes the materials beyond the set limits shall pay compensation for damage in full or in part at the market price or as stipulated in the internal labor regulations or the responsibility contract (if any). In case this is caused by a natural disaster, fire, war, major epidemic, calamity, or another force majeure event which is unforeseeable and insurmountable, and all necessary measures and possibilities for avoidance have been taken, the compensation shall not be required.
Thus, if an employee causes damage due to negligence with a property value not exceeding 10 months of the regional minimum wage, he/she will only compensate for a maximum of 3 months' salary.
Will the social insurance premium increase according to the new regional minimum wage in Vietnam?
According to Article 5 of the process promulgated together with Decision 595/QD-BHXH in 2017, the monthly payment of social insurance premiums will be based on the monthly salary on which social insurance premiums are based.
Therefore, an increase in the regional minimum wage will be the basis for businesses that are paying social insurance premiums for employees at least equal to such a regional minimum wage, and the level of enjoyment of social insurance benefits will also increase.
Will the social insurance premium increase according to the regional minimum wage in Vietnam?
According to the provisions of Clause 2, Article 15, the promulgation process attached to Decision 595/QD-BHXH in 2017 is:
- Employees who pay unemployment insurance premiums according to the salary regime decided by the unit, the monthly salary on which unemployment insurance premiums are based is the salary used as the basis for payment of compulsory social insurance as prescribed in Clause 2, Article 6. In case the employee's monthly salary is the basis for payment of compulsory social insurance higher than 20 months of regional minimum salary, the monthly salary on which unemployment insurance premiums are based is equal to 20 months of regional minimum salary.
Unemployment insurance premiums also depend on the monthly salary as the basis for paying social insurance premiums. The regional minimum wage increases the insurance premium will also increase, which will contribute to the workers' unemployment insurance benefits in the future.
What is the maximum unemployment benefit workers can get in Vietnam?
According to Article 50 of the Employment Law 2013 of Vietnam:
- The monthly unemployment allowance level equals 60% of the average monthly wage of 6 consecutive months before the worker becomes unemployed on which unemployment insurance premiums are based, but must not exceed 5 times the basic wage level, for workers receiving wages under the State-prescribed regime, or must not exceed 5 times the region-based minimum wage level under the Labor Code, for workers who pay unemployment insurance premiums under the wage regime decided by employers at the time of termination of the labor contract or working contract.
According to this regulation, the maximum level of unemployment allowance that employees receive monthly will not exceed 05 times the regional minimum salary.
What will the monthly pension of employees paying compulsory social insurance change from July 1, 2022 in Vietnam?
Pursuant to Article 56 of the Law on Social Insurance 2014 of Vietnam stipulates:
The monthly pension of eligible employees is calculated based on the average monthly salary on which social insurance premiums are based.
The monthly pension of employees paying voluntary social insurance premiums is calculated based on the average monthly income on which social insurance premiums are based.
Based on the above, when the regional minimum wage increases from July 1, 2022 according to Decree 38/2022/ND-CP, employees who are being paid less than the new regional minimum wage will receive an increase in salary. Specifically:
+ Region I: 4.68 million VND/month
+ Region II: 4.16 million VND/month
+ Region III: 3.64 million VND/month
+ Region IV: 3.25 million VND/month
Thus, an increase in the regional minimum wage is the basis for employees who receive wages according to the previous regional minimum wage to increase their wages, from which the social insurance contributions according to the received salary will also increase. The relevant contribution rates described above may also increase if workers are adjusted to the minimum wage.
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