Accounting and Human Resources Must Immediately Perform These Tasks When Regional Minimum Wage Increases

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Effective from January 1, 2020, the regional minimum wage for employees working under labor contracts in enterprises in various areas will be adjusted as follows:

- Region I: VND 4,420,000/month, currently VND 4,180,000/month (an increase of VND 240,000/month);- Region II: VND 3,920,000/month, currently VND 3,710,000/month (an increase of VND 210,000/month);- Region III: VND 3,430,000/month, currently VND 3,250,000/month (an increase of VND 180,000/month);- Region IV: VND 3,070,000/month, currently VND 2,920,000/month (an increase of VND 150,000/month).

With this increase in regional minimum wage, accountants need to perform the following important tasks:

1. Submit new salary scales and payrolls to the Department of Labor, Invalids and Social Affairs

From January 1, 2020, the new regional minimum wage will officially be applied to employees working in enterprises across the country.

According to Clause 5, Article 7 of Decree 49/2013/ND-CP, salary scales and payrolls must be periodically reviewed to amend and supplement them appropriately based on actual conditions such as technological innovation, production organization, labor organization, the labor market wage ground, and ensuring compliance with labor laws. Enterprises using payrolls with regional minimum wages lower than those stipulated in Decree 90 must re-establish their salary scales and payrolls.

Based on Clause 6, Article 7 of Decree 49/2013/ND-CP, when establishing or amending and supplementing salary scales and payrolls, enterprises must consult with the representative organization of the employee collective within the enterprise and publicly announce the new salary scales and payrolls at the workplace before implementation, and also submit the new salary scales and payrolls to the Department of Labor, Invalids and Social Affairs.

For one-member limited liability companies with 100% state ownership, when establishing or amending salary scales and payrolls, they must report to the owner for opinions before implementation; for parent companies in state economic groups, special class parent companies, they must also send a copy to the Ministry of Labor, Invalids and Social Affairs for monitoring and supervision.

Download the complete notification file on changing salary scales and payrolls HERE.

2. Notify the increase in social insurance contributions to the social insurance agency

The regional minimum wage will be used as one of the bases for calculating social insurance contributions for employees. An increase in the regional minimum wage means the minimum social insurance contribution for employees will also increase. Therefore, if any enterprise has a wage level lower than the wage level used for social insurance contributions, it must notify the increase in social insurance contributions.

According to Article 23 of Decision 595/QD-BHXH, the dossier to notify the increase in social insurance contributions to the social insurance agency includes the following documents:

For employees currently working at the unit:

- Declaration of participation and adjustment of information on social insurance and health insurance (Form TK1-TS);

- In case employees are entitled to higher health insurance benefits: additional proof documents (if any) according to Appendix 03.

For employers:

- Unit declaration of participation and adjustment of information on social insurance and health insurance (Form TK3-TS);

- List of employees participating in social insurance, health insurance, unemployment insurance, labor accident insurance, and occupational disease insurance (Form D02-TS);

- Information sheet (Form D01-TS).

Number of dossier sets: 01 set

Download the complete notification file on increasing social insurance contributions HERE.

Lawyer Bui Tuong Vu, Chairman of HDTV of THU KY LUAT said: "The regional minimum wage is the lowest level used as the basis for enterprises and employees to negotiate salary payments. This wage level is for employees working under normal working conditions, full-time work in a month, and accomplishing the agreed labor quotas or work. Compared to the current regional minimum wage under Decree 157/2018/ND-CP, from January 1, 2020, the regional minimum wage will increase by 5.5% (increasing from VND 150,000 to VND 240,000), depending on each region. We hope that with this increase in regional minimum wage, the basic income of employees will also increase, allowing them to ensure daily life and work with peace of mind and dedication."

Nguyen Trinh

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