What are the region-based minimum wages in Vietnam in 2024? What is the content of salary reform regarding region-based minimum wages according to Resolution 27?
- What are the region-based minimum wages in Vietnam in 2024?
- What is the content of salary reform regarding region-based minimum wages in Vietnam according to Resolution 27?
- What are the penalties imposed upon an employer for paying their employees salaries which are lower than the region-based minimum wages in Vietnam?
What are the region-based minimum wages in Vietnam in 2024?
Official Dispatch 7978/VPCP-KTTH of 2023 of the Government requires the Ministry of Labor, War Invalids and Social Affairs to develop and submit a draft Decree regulating minimum wages for employees working under labor contracts after The National Wage Council recommends to the Government a minimum wage plan by 2024.
Currently, the specific increase as well as the time of adjustment to increase region-based minimum wages in 2024 have not yet been determined.
After a delay in the region-based minimum wages negotiation meeting, the second meeting of the National Wage Council will take place in December 2023. Therefore, it is unlikely to increase from January 1, 2024.
Previously, the Vietnam General Confederation of Labor proposed an increase of 5-6%, but with the current inflation situation, the proposed increase will probably still change.
Regarding the timing of increasing region-based minimum wages, there are currently 02 proposals: increasing region-based minimum wages from January 1, 2024 or implementing at the same time with the salary reform policy from July 1, 2024.
Because there is no official document, in the early part of 2024, region-based minimum wages may still be implemented according to Decree 38/2022/ND-CP.
Accordingly, if there are no changes, the region-based minimum wages 2024 will continue to comply with Decree 38/2022/ND-CP with the specific amount as follows:
Region | Statutory minimum wages per month (Unit: VND/month) | Statutory minimum wages per hour (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 |
*Note: The statutory minimum wage is the minimum wage used as the basis for any agreement between employers and employees on salary and payment thereof. The job- or position-based salary of an employee who ensures the normal working hours and has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages.
What are the region-based minimum wages in Vietnam in 2024? What is the content of salary reform regarding region-based minimum wages according to Resolution 27? (Picture from internet)
What is the content of salary reform regarding region-based minimum wages in Vietnam according to Resolution 27?
Pursuant to Point a, Clause 3.2, Section II, Resolution 27/NQ-TW of 2018 as follows:
In particular, the content of salary reform regarding region-based minimum wages is mentioned as follows:
Reform content
...
3.2. For employees in businesses
a) Regarding region-based minimum wages
- Continue to improve the policy on region-based minimum wages per month; Supplement regulations for region-based minimum wages per hour to improve the coverage of minimum wages and meet the flexibility of the labor market.
- Adjust region-based minimum wages ensures the minimum living standard of workers and their families, in relation to factors of the labor market and socio-economic development (supply - labor demand, economic growth rate, consumer price index, labor productivity, employment, unemployment, solvency of businesses...).
- Strengthen the functions, tasks, and organizational structure of the National Wage Council; Adding independent experts to the Council.
Thus, the adjustment to increase region-based minimum wages according to salary reform is carried out according to the above content.
What are the penalties imposed upon an employer for paying their employees salaries which are lower than the region-based minimum wages in Vietnam?
Pursuant to the provisions of Article 17 of Decree 12/2022/ND-CP regulating violations against regulations on salaries as follows:
Violations against regulations on salaries
...
3. The following fines shall be imposed upon an employer for paying their employees salaries which are lower than the statutory minimum wages announced by the Government:
a) A fine ranging from VND 20.000.000 to VND 30.000.000 shall be imposed if the violation involves 01 - 10 employees;
b) A fine ranging from VND 30.000.000 to VND 50.000.000 shall be imposed if the violation involves 11 - 50 employees;
c) A fine ranging from VND 50.000.000 to VND 75.000.000 shall be imposed if the violation involves 51 employees or more.
...
5. Remedial measures
a) The employer that commits the violation specified in Clause 2 or Clause 3 of this Article is compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
b) The employer that commits the violation specified in Clause 4 of this Article is compelled to pay full amounts of money equal to total sums of compulsory social insurance, compulsory health insurance, and unemployment insurance premiums payable plus interests on such amounts, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
Thus, based on the above regulations, an individual employer paying their employees salaries which are lower than the region-based minimum wages can be fined from VND 20.000.000 to VND 75.000.000 depending on the number of workers paid lower than the region-based minimum wages.
*Note: The fine imposed upon an organization is twice as much as that imposed upon an individual for committing the same administrative violation as prescribed in Clause 1, Article 6 of Decree 12/2022/ND-CP.
In addition to being fined, employers are also compelled to pay full salaries plus interests on late payments or insufficient payments of salary, which are calculated at the highest rate of the demand deposit interest rates publicly quoted by state-owned commercial banks on the date of penalty imposition, to employees.
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