Regulations on application of statutory minimum wages in Vietnam according to Decree 38/2022/ND-CP

Regulations on application of statutory minimum wages in Vietnam according to Decree 38/2022/ND-CP (Internet image)

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

1. What is statutory minimum wages?

According to Clause 1, Article 91 of the Labor Code 2019, 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.

2. Regulations on application of statutory minimum wages in Vietnam according to Decree 38/2022/ND-CP

Regulations on application of statutory minimum wages according to Article 4 of Decree 38/2022/ND-CP are as follows:

- The statutory minimum wage per month is the minimum wage used as the basis for any agreement between employers and employees on monthly salary and payment thereof. The job- or position-based salary of an employee who ensures the monthly normal working hours and has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per month.

- The statutory minimum wage per hour is the minimum wage used as the basis for any agreement between employers and employees on hourly salary and payment thereof. The job- or position-based salary paid for every working hour to an employee who has fulfilled his/her labor productivity norms or tasks as agreed shall not be lower than the statutory minimum wages per hour.

- In case an employee receives a weekly or daily salary, a piece-rate pay or a fixed pay, the wages paid to the employee, when converted into monthly or hourly salary, shall not be lower than the statutory minimum wage per month or per hour. The normal working hours-based converted monthly or hourly salary shall be subjected to the employer’s decision in accordance with regulations of law. To be specific:

+ The converted monthly salary shall equal the product of the weekly salary and 52 weeks divided by 12 months; or the daily salary multiplied by total normal working days in a month; or the piece-rate pay or fixed pay for the works performed during normal working hours in a month.

+ The converted hourly salary shall equal the weekly or daily salary divided by the normal working hours in a week or a day respectively; or the piece-rate pay or fixed pay divided by the working hours, considered as normal working hours, spent for producing a predetermined quantity of products or performing assigned works.

3. Regulations on subregion as the basis for application of the statutory minimum wages in Vietnam

According to Clause 2, 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.

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