From July 1, 2024, Regional Minimum Wages Increase by 6%? The Specific Roadmap for the Salary Reform from 2021 to 2025 and the Vision to 2030.
Regional Minimum Wage Increase of 6% from July 1, 2024?
On the morning of December 20, the National Wage Council held its second session of 2023 to discuss and negotiate a plan for adjusting the regional minimum wage for 2024.
Mr. Ngo Duy Hieu, Vice President of the Vietnam General Confederation of Labor (VGCL), Vice President of the National Wage Council, stated that during this session, the labor representatives proposed an increase in the regional minimum wage from 6.5% to 7.3%, with the wage increase effective from July 1, 2024.
Mr. Ngo Duy Hieu, Vice President of the Vietnam General Confederation of Labor, Vice President of the National Wage Council, assessed that a 6% increase is appropriate given the context of workers sharing the difficulties with businesses.
Explaining why the proposed increase this time is higher than the previous session, Vice President of the Vietnam General Confederation of Labor Ngo Duy Hieu noted that the current socio-economic situation shows signs of improvement. Meanwhile, the goal to increase the minimum wage from January 1, 2024, could not be implemented due to legal procedures.
"Postponing the wage increase for a period (6 months) requires a higher increase to compensate for the workers. We agree on increasing the regional minimum wage simultaneously with the wage increase in the public sector to ensure consistency and show shared responsibility in both sectors," said Mr. Ngo Duy Hieu.
Moreover, "this proposed increase generally meets the minimum living standards of workers," the Vice President of the Vietnam General Confederation of Labor expressed.
With this regional minimum wage increase, the Vietnam General Confederation of Labor will continue to communicate and motivate workers to boost productivity and help businesses overcome difficulties.
Additionally, businesses also need to continue expanding the market, increasing orders so that workers have jobs in the upcoming period.
From the employer representative perspective, Mr. Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry, Vice President of the National Wage Council, noted that in the second session, the labor representatives proposed a higher rate than the one finalized by the National Wage Council (6%).
Employers proposed a lower rate. Subsequently, through multi-faceted discussions, the consensus was to increase by 6% to present to authorities, from which a Decree will be issued for implementation.
Source: Vietnam Government Newspaper
From July 1, 2024, regional minimum wage will increase by 6%? Specific roadmap for wage reform from 2021 to 2025 with a vision to 2030.
What is the current regional minimum wage for workers?
According to Clause 1 Article 3 of Decree 38/2022/ND-CP regulating the minimum wage for workers as follows:
- The regional minimum wage is regulated on a monthly and hourly basis for workers employed by 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 in Region I, Region II, Region III, and Region IV is stipulated in the Appendix issued together with Decree 38/2022/ND-CP.
How is the specific roadmap for wage reform from 2021 to 2025 and vision to 2030 being implemented?
Resolution 27-NQ/TW in 2018 presented specific goals for wage reform from 2021 to 2025 with a vision to 2030 as follows:
* For the Public Sector
- From 2021, new unified wage policies will be applied for officials and public employees, armed forces across the entire political system.
- In 2021, the lowest salary for officials and public employees will be equal to the average lowest wage across the regions in the enterprise sector.
- Regularly adjust wage levels in line with the consumer price index, economic growth rate, and state budget capacity.
- By 2025, the lowest salary for officials and public employees will be higher than the average lowest wage across the regions in the enterprise sector.
- By 2030, the lowest salary for officials and public employees will be equal to or higher than the lowest wage in the highest region in the enterprise sector.
* 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 negotiations and agreements between employers and workers and their collective representatives; the State will not directly intervene in enterprise wage policies.
- Manage labor and wages in state-owned enterprises by means of wage cost contracting tied to the production and business tasks of the enterprise until 2025, moving towards contracting production and business tasks of the enterprise by 2030.
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