Apply regional minimum wage from January 1, 2017

(Baonghean) - Nghe An Provincial Social Insurance has just issued Official Dispatch No. 157/BHXH-QLT to Heads of labor-using units regarding the application of regional minimum wages according to the provisions of Decree No. 153/2016/ND-CP of the Government.

Accordingly, from January 1, 2017, the regional minimum wage stipulated in Clause 1, Article 3 of Decree No. 153/2016/ND-CP shall be applied as the lowest level as a basis for enterprises and employees to agree on the salary stated in the contract and pay salaries to employees working in normal working conditions and the simplest jobs, specifically:

- The level of 2,900,000 VND/month/person applies to businesses operating in Vinh city (region III);

- The level of VND 2,580,000/month/person applies to businesses operating in districts and towns of Nghe An province (region IV).

For employees doing jobs that require vocational training as prescribed in Clause 2, Article 5 of Decree No. 153/2016/ND-CP, the salary stated in the labor contract must be at least 7% higher than the regional minimum wage stated in Section 1 of this Official Dispatch.

Workers complete procedures for social insurance book issuance at Nghe An Social Insurance. (Photo courtesy)

Enterprises operating in a locality shall apply the regional minimum wage prescribed in that locality. In case an enterprise has branches operating in localities with different regional minimum wages, the unit or branch operating in each locality shall apply the regional minimum wage according to that locality. For enterprises operating in industrial parks, export processing zones, and high-tech zones located in localities with different regional minimum wages, the locality with the highest regional minimum wage shall apply.

Enterprises operating in areas that have changed their names or split will temporarily apply the regional minimum wage prescribed for the area before the name change or split until the Government has new regulations.

Enterprises operating in a newly established area from one or more areas with different regional minimum wages shall apply the regional minimum wage according to the area with the highest regional minimum wage.

For example: Enterprise (A) operates in commune (X), district (M), province (T). In April 2017, a new district (Y) was established in province (T) including commune (X) of district (M) and 9 communes of district (Z). Before April 2017, district (M) applied the regional minimum wage of VND 2,580,000/month/person; district (Z) applied the regional minimum wage of VND 2,900,000/month/person. Based on the above regulations, from April 2017, enterprise (A) applied the regional minimum wage of VND 2,900,000/month/person.

In case an enterprise operates in a provincial city newly established from one or more localities in region IV, the regional minimum wage prescribed for the remaining provincial cities in Section 3, Appendix issued with Decree 153/2016/ND-CP shall apply (applying the regional minimum wage of region III).

For example: Enterprise (B) operates in commune (C) of district K. In May 2017, a city (H) was established under the province, including commune (C) of district (K) and 9 wards of town (E). Before May 2017, district (K) and town (E) both applied the regional minimum wage of VND 2,580,000/month/person (region IV). Based on the above regulations, from May 2017, enterprise (B) applied the regional minimum wage of VND 2,900,000/month/person (region III).

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