Methods for determination of a subregion as the basis for application of the statutory minimum wages in Vietnam

Methods for determination of a subregion as the basis for application of the statutory minimum wages in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Methods for determination of a subregion as the basis for application of the statutory minimum wages in Vietnam

According to Clause 3, Article 3 of Decree 38/2022/ND-CP, determination of a subregion as the basis for application of the statutory minimum wages shall be conducted based on the employer’s place of operation. To be specific:

- An employer located in a specific subregion shall apply the respective statutory minimum wage applied thereto. 

- In the event that an employer has its affiliates and/or branches located in different subregions to which different statutory minimum wages apply, such affiliates and/or branches must apply the respective statutory minimum wages applied thereto.

- If an employer is located in an industrial park or export processing zone located in the territory containing two or more subregions to which different statutory minimum wages apply, the highest statutory minimum wage shall apply.

- If an employer is located in a subregion which is renamed or divided, the statutory minimum wage applied to that subregion before it is renamed or divided shall still apply until new regulations promulgated by the Government come into force.

- If an employer is located in a subregion which is converted or established from a subregion or by consolidation of two or more subregions to which different statutory minimum wages apply, it shall apply the highest statutory minimum wage.

- In case an employer is located in a provincial city which is established from one or more subregions in the region IV, it shall apply the statutory minimum wage applied to the remaining provincial cities as prescribed in Clause 3 of the Appendix enclosed with Decree 38/2022/ND-CP.

2. Minimum monthly salary and minimum hourly wage for employees

Pursuant to Clause 1, Article 3 of Decree 38/2022/ND-CP, the region-based statutory minimum wages per month and per hour paid to employees are provided for as follows:

3. Salary payment rules in Vietnam

Salary payment rules are prescribed in Article 94 of the Labor Code 2019 as follows:

- Employers shall directly, fully and punctually pay salaries to their employees. In the cases where an employee is not able to directly receive his/her salary, the employer may pay it through a person legally authorized by the employee.

- Employers must not restrict or interfere their employees’ spending of their salaries; must not force their employees to spend their salaries on goods or services of the employers or any particular providers decided by the employers.

4. Regulations on salary payment in Vietnam

According to Article 95 of the Labor Code 2019, the salary payment is as follows:

- The employer shall pay the employee on the basis of the agreed salary, productivity and work quality.

- The salary written in the employment contract and the salary paid in reality shall be VND, unless the employee is a foreigner working in Vietnam.

- Every time salary is paid, the employer shall provide the employee with a note specifying the salary, overtime pay, nightshift pay and deductions (if any).

Ho Quoc Tuan

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