Vietnam: Region-based minimum wage increased by 6% from July 1, 2022, how will workers' wages change?
The National Wage Council has agreed to increase the region-based minimum wage to 6%?
According to Resolution 27-NQ/TW in 2018 on reforming salary policy for cadres, civil servants, public employees, armed forces and employees in enterprises issued by the Central Committee. According to that, for the business sector from 2021, the State periodically adjusts the region-based minimum wage on the basis of recommendations of the National Wage Council. Enterprises are entitled to implement salary policy on the basis of negotiation and agreement between the employer and the employee and the representative of the worker's collective; the state does not directly intervene in the wage policy of enterprises. At the same time, due to the impact of the Covid-19 epidemic, workers are in dire need of support after the epidemic period and price escalation. In addition, for 2 consecutive years from 2020 the Government has not adjusted the regional minimum wage, so at this time it is completely reasonable to propose to increase the regional minimum wage. The increase in the regional minimum wage, in addition to helping workers overcome the current difficult period, also contributes to the rapid economic recovery.
At the 2nd meeting of the National Wage Council, chaired by Mr. Le Van Thanh, Deputy Minister of Labour, Invalids and Social Affairs, cum Chairman of the National Wage Council, to discuss the issue of increasing region-based minimum wages for employees at enterprises. According to the content of the meeting, the General Confederation of Labor proposed to increase the region-based minimum wage by 7-8%. However, at the end of the second meeting of the National Wage Council, it was agreed to increase the regional minimum wage by 6% compared to the current region-based minimum wage. This increase will be applied from July 1, 2022.
The National Wage Council of Vietnam unanimously increased the region-based minimum wage to 6%
What are the regulations on the current region-based minimum wages?
According to Article 3 of Decree 90/2019/ND-CP of Vietnam, region-based minimum wages are stipulated as follows:
- For enterprises located in region I: VND 4,420,000/month.
- For enterprises located in region II: VND 3,920,000/month.
- For enterprises located in region III: VND 3,430,000/month.
- For enterprises located in region IV: VND 3,070,000/month.
Besides, according to Point b Clause 1 Article 5 of Decree 90/2019/ND-CP of Vietnam, region-based minimum wages paid to a skilled worker are at least 7% higher than the region-based minimum wage. The following employees are considered skilled workers:
- Employees holding vocational certificates, vocational diplomas, professional secondary school diplomas, vocational secondary school diplomas, associate degrees, undergraduate preparatory certificates, undergraduate education degrees, bachelor's degrees, postgraduate or master's degrees, or doctoral degrees, as defined in the Government’s Decree No. 90/CP dated November 24, 1993 on framework of national education system, educational and training certificate and diploma system;
- Employees holding certificates of graduation from professional secondary schools, certificates of completion of vocational training courses, associate degrees, bachelor’s degrees, master's degrees, doctoral degrees, vocational education certificates or diplomas, undergraduate education diplomas, or continuing education diplomas or certificates as regulated in the Law on Education in 1998 and the Law on Education in 2005;
- Employees holding certificates of completion of continuing vocational education programs, primary-level vocational training certificates, diplomas granted by vocational secondary schools or vocational training colleges, or certificates of completion of vocational training programs according to vocational training agreements as regulated in the Law on Vocational Training;
- Employees holding national vocational skill certificates as regulated in the Law on Employment;
- Employees holding primary-, intermediate- or advanced-level vocational education certificates or diplomas, certificates of completion of continuing training programs or other vocational training programs as regulated in the Law on Vocational Education;
- Employees holding certificates of graduation from higher education programs as regulated in the Law on Higher Education;
- Employees holding diplomas or certificates awarded by foreign training institutions;
- Employees who have successfully completed vocational training programs provided by enterprises or self-taught and are arranged by enterprises to job positions holders of which must be skilled workers.
From July 1, 2022, what is the change of the region-based minimum wage applied to employees working at enterprises?
- For unskilled workers:
According to the 6% increase in the region-based minimum wage newly announced by the National Wage Council of Vietnam and based on the region-based minimum wage specified in Article 3 of Decree 90/2019/ND-CP of Vietnam, the region-based minimum wage of employees working at the enterprise will change as follows:
+ For enterprises located in region I: VND 4,680,000/month.
+ For enterprises located in region II: VND 4,160,000/month.
+ For enterprises located in region III: VND 3,640,000/month.
+ For enterprises located in region IV: VND 3,250,000/month.
- For skilled workers:
Assuming that a skilled worker continues to be paid at least 7% higher than the region-based minimum wage mentioned above, specifically the minimum wages that the skilled workers will receive as follows:
+ For enterprises located in region I: VND 5,010,000/month.
+ For enterprises located in region II: VND 4,450,000/month.
+ For enterprises located in region III: VND 3,900,000/month.
+ For enterprises located in region IV: VND 3,480,000/month.
So, according to the increase of the region-based minimum wage recently announced by the National Wage Council, the above wage will be the lowest wage that an employee is paid when working under an employment contract at an enterprise.
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