Vietnam: In the near future, the statutory minimum wage will be adjusted based on 07 criteria

According to Article 91 of the Labor Code 2019 of Vietnam, statutory minimum wages are minimum wages of workers who do the simplest jobs in normal working conditions that are sufficient to support themselves and their families, and appropriate for socio-economic development. Statutory minimum wages per month or per hour vary according to regions.

Statutory minimum wages shall be adjusted according to 07 following criteria:

First, minimum living standards of workers and their families; 

Second, the relation between statutory minimum wages and usual salaries; 

Third, consumer price index, economy growth rate; 

Fourth, labor supply and demand;

Fifth, employment and unemployment;

Sixth, productivity;

Seventh, financial capacity of enterprises.

Currently, according to Clause 2 Article 91 of the Labor Code 2012 of Vietnam, based on the minimum living needs of an employee and his/her family, the social and economic conditions and wage level in the labor market, the Government shall announce the regional minimum wage based on the recommendations of the National Wage Council.

Therefore, from January 01, 2021, when the Labor Code 2019 of Vietnam officially takes effect, statutory minimum wages shall be adjusted according to more criteria compared to previous regulation. Specifically, supplementing criteria such as consumer price index, economy growth rate, labor supply and demand, employment and unemployment, productivity and financial capacity of enterprises.

It can be seen that the criteria for adjusting the statutory minimum wages in the coming time will be clearer than before, concurrently helping the assessment and determination of the statutory minimum wages to be accurate and in line with the living standards of employees as well as socio-economic conditions of each locality across the country.

Besides, due to the complicated situation of the Covid-19 epidemic, which makes the economy difficult, it is likely that the statutory minimum wage in 2021 will not increase. Specifically, at the end of August, the National Wage Council had drafted recommendations to the Government on the statutory minimum wage plan applied to employees in enterprises in 2021 in the direction of continuing to current statutory minimum wage by month until the end of 2021 (not adjusted in 2021).

If the Government approves the statutory minimum wage plan to apply to employees in enterprises in 2021 in the direction of continuing to implement the statutory minimum wage in 2020 until the end of 2021, the 2021 statutory minimum wage will not be changed compared to 2020 according to the provisions of Decree No. 90/2019/NĐ-CP. Specifically:

- 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.

Ty Na

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