According to the projections, the region-based minimum wages for employees will be increased by VND 180,000-250,000/month. This is the content of the draft Decree stipulating the region-based minimum wages for employees working in enterprises, cooperatives, cooperative unions, partnerships, farms, households, individuals and agencies, and organizations that employ employees under employment contracts in Vietnam.
Article table of contents
The region-based minimum wages, which serves as a basis for enterprises and employees to negotiate and pay wages, ensure that the wage paid to employees working under normal working conditions, meeting the standard working hours in a month, and completing the agreed labor norm or tasks must ensure:
- Not lower than the region-based minimum wage for employees who have not undergone training, performing the simplest jobs;
- At least 7% higher than the region-based minimum wage for employees who have undergone vocational training.
According to the proposal of the Ministry of Labor, Invalids, and Social Affairs, the region-based minimum wages applied to enterprises in Vietnam are as follows:
- Region I: 3,750,000 VND/month;
- Region II: 3,320,000 VND/month;
- Region III: 2,900,000 VND/month;
- Region IV: 2,580,000 VND/month.
Thus, the proposed region-based minimum wage in the draft decree remains unchanged from the wage increase plan finalized by the National Wage Council on August 2, 2016. The above minimum wage (an increase of 180,000 VND – 250,000 VND compared to 2016, corresponding to a percentage increase from 7.1 - 7.5% depending on the region, with an average increase of 7.3%).
According to the Vietnam Ministry of Labor, Invalids, and Social Affairs, the above proposal has considered the impacts on employment, unemployment, the production conditions, and business of enterprises, which are still challenging. The above wage meets about 94% of the minimum living needs of employees and their families, depending on the region.
The draft decree has several changes in subregion applying the region-based minimum wage at the request of the People's Committees of provinces and municipalities.
- From Region II to Region I for Tan Thanh district in Ba Ria – Vung Tau province;
- From Region III to Region II, including Hoi An City, Tam Ky in Quang Nam Province, Tra Vinh City in Tra Vinh Province;
- From Region IV to Region III, including Que Son district, Thang Binh district of Quang Nam province, Duyen Hai town of Tra Vinh province;
- From Region III to Region IV for Giang Thanh district of Kien Giang province.
When implementing the region-based minimum wages, enterprises shall not remove or reduce wage policies when employees work overtime, work at night, work under heavy or hazardous conditions, or the policies on providing nourishment in kind for heavy or hazardous job titles, and other policies as prescribed by labor laws. Allowances, additional supplements, subsidies, and bonuses as stipulated by enterprises shall be implemented according to the agreements in labor contracts, collective labor agreements, or enterprise regulations.
As analyzed in previous articles, the increase in region-based minimum wage impacts employees, employers, and the economy. However, this remains a proposal, and the application of the aforementioned region-based minimum wages is pending the official decree from the Government of Vietnam.
