What are the differences between statutory pay rate and region-based minimum wage? Who is eligible for the above salaries in Vietnam?
What is the region-based minimum wage by month and by hour in Vietnam?
According to Article 4 of Decree 38/2022/ND-CP, the minimum wage for employees working under labor contracts is as follows:
"Article 4. Application of region-based minimum wages
1. The region-based minimum wage per month is the minimum wage used as the basis for any agreement between employers and employees on monthly salary and payment thereof. The job- or position-based salary of an employee who ensures the monthly normal working hours and has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the region-based minimum wages per month.
2. The region-based minimum wage per hour is the minimum wage used as the basis for any agreement between employers and employees on hourly salary and payment thereof. The job- or position-based salary paid for every working hour to an employee who has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the region-based minimum wages per hour.
3. In case an employee receives a weekly or daily salary, a piece-rate pay or a fixed pay, the wages paid to the employee, when converted into monthly or hourly salary, shall not be lower than the region-based minimum wage per month or per hour. The normal working hours-based converted monthly or hourly salary shall be subjected to the employer’s decision in accordance with regulations of law. To be specific:
a) The converted monthly salary shall equal the product of the weekly salary and 52 weeks divided by 12 months; or the daily salary multiplied by total normal working days in a month; or the piece-rate pay or fixed pay for the works performed during normal working hours in a month.
b) The converted hourly salary shall equal the weekly or daily salary divided by the normal working hours in a week or a day respectively; or the piece-rate pay or fixed pay divided by the working hours, considered as normal working hours, spent for producing a predetermined quantity of products or performing assigned works.."
Thus, the minimum wage is understood as the lowest salary as a basis for negotiating and paying wages to employees applying the form of salary payment.
What are the differences between statutory pay rate and region-based minimum wage? Who is eligible for those salaries in Vietnam?
Who is eligible to apply for the region-based minimum wage in Vietnam?
According to Article 2 of Decree 38/2022/ND-CP on subjects applying the monthly region-based minimum wage as follows:
Employees work under labor contracts in accordance with the Labor Code.
What is the current statutory pay rate in Vietnam?
According to Article 3 of Decree 38/2019/ND-CP stipulating the statutory pay rate as follows:
"Article 3. Statutory pay rate
1. The statutory pay rate is the basis for:
a) Determining the levels of salaries in payrolls, allowances and other benefits as per the law with regard to individuals as defined in Article 2 hereof;
b) Determining subsistence allowances as per the law;
c) Determining contributions and benefits concerning the statutory pay rate.
2. From July 1, 2019, the statutory pay rate is VND 1,490,000 per month.
3. The Government shall request the National Assembly to consider adjusting statutory pay rate in conformity with the capacity of the state budget, consumer price index and national economic growth rate."
Thus, the current statutory pay rate is 1,490,000 VND.
Who is eligible to apply for the statutory pay rate in Vietnam?
According to Articles 1 and 2 of Decree 38/2019/ND-CP stipulating the statutory pay rate applicable to people receiving salaries and allowances specified in this Decree, they include:
- Public officials and public employees from central echelon to district level prescribed in Clause 1 and Clause 2 Article 4 of Law on public officials and public employees 2008.
- Public officials and public employees at commune level prescribed in Clause 3 Article 4 of Law on public officials and public employees 2008.
- Public employees working in public sector entities prescribed in Law on Public Employees 2010.
- Contract employees who are paid as prescribed in Government's Decree No. 204/2004/ND-CP dated December 14, 2004 on pay policy for public officials and public employees and armed forces’ personnel, including: Contract employees in agencies of the Communist Party, the Government, socio-political organizations prescribed in Government's Decree No. 68/2000/ND-CP dated November 17, 2000 on contracts of employment for certain positions in regulatory agencies and public sector entities and Government's Decree No. 161/2018/ND-CP dated November 29, 2018 on amendments to regulations on recruitment of public employees, pay grade advancement for public officials, promotion for public employees and contracts of employment for certain positions in regulatory agencies and public sector entities.
- Employees on state regular payroll in state-funded associations as defined in Government's Decree No. 45/2010/ND-CP dated April 21, 2010 on organization, operation and management of associations.
- Commissioned officers, professional soldiers, non-commissioned officers, soldiers and national defense workers and public employees, contract employees in the People's Army of Vietnam.
- Commissioned officers, non-commissioned officers on payroll, non-commissioned officers, police officers, public security workers and contract employees in the People’s Police of Vietnam.
- Employees in cryptography organizations.
- Part-time workers in communes, hamlets or neighborhoods.
Thus, according to regulations, the region-based minimum wage is the lowest salary and the employee pays the employee according to the labor law. Statutory pay rate is the salary as the basis for salary calculation according to the position coefficient, etc., applicable to officials, public employees and people working in state agencies and organizations listed above.
Decree 38/2022/ND-CP takes effect from July 1, 2022.
Thư Viện Pháp Luật
