Officially increase regional minimum wage for workers from July 1

This Decree prescribes the minimum monthly wage and minimum hourly wage applicable to employees working under labor contracts.

Subjects of application include: Employees working under labor contracts as prescribed by the Labor Code; Employers as prescribed by the Labor Code include: Enterprises as prescribed by the Law on Enterprises; agencies, organizations, cooperatives, households, and individuals that hire or employ employees to work for them under agreements; Other agencies, organizations, and individuals related to the implementation of the minimum wage prescribed in this Decree.

From July 1, the regional minimum wage for contract workers will increase by 6%. Photo: Xuan Hoang

Increase regional minimum wage by 6%

Regarding the monthly minimum wage, the Decree stipulates the monthly minimum wage levels according to 4 regions: Region I is 4,680,000 VND/month, Region II is 4,160,000 VND/month, Region III is 3,640,000 VND/month, Region IV is 3,250,000 VND/month.

Thus, the salary in Region I increased by VND260,000, from VND4,420,000/month to VND4,680,000/month. Region II increased by VND240,000, from VND3,920,000/month to VND4,160,000/month. Region III increased by VND210,000, from VND3,430,000/month to VND3,640,000/month. Region IV increased by VND180,000, from VND3,070,000/month to VND3,250,000/month.

The above minimum wage increases by an average of 6% (equivalent to an increase of VND 180,000 - VND 260,000) compared to the current minimum wage. The above minimum wage adjustment includes an increase of 5.3% to ensure a minimum living standard for workers and their families (by the end of 2023) and an additional increase of 0.7% to further improve wages for workers.

Regarding the minimum hourly wage, the Decree also stipulates the minimum hourly wage according to 4 regions: Region I is 22,500 VND/hour, Region II is 20,000 VND/hour, Region III is 17,500 VND/hour, Region IV is 15,600 VND/hour.

The Decree clearly states that the application of regional areas is determined according to the employer's place of operation as follows:

Employers operating in a region shall apply the minimum wage prescribed for that region.

If an employer has units or branches operating in areas with different minimum wages, the unit or branch operating in the area shall apply the minimum wage prescribed for that area.

Employers operating in industrial parks and export processing zones located in areas with different minimum wages shall apply the area with the highest minimum wage.

Employers operating in an area that has changed its name or split shall temporarily apply the minimum wage prescribed for the area before the name change or split until the Government issues new regulations.

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

Employers operating in a provincial city newly established from one or more localities in region IV shall apply the minimum wage prescribed for the remaining provincial cities in Clause 3 of the Appendix issued with this Decree.

The Decree also clearly states that the monthly minimum wage is the lowest wage used as a basis for negotiating and paying wages to employees applying the monthly wage payment method, ensuring that the wage according to the job or position of the employee who works enough normal working hours in the month and completes the agreed labor or work norms must not be lower than the monthly minimum wage.

The minimum hourly wage is the lowest wage used as a basis for negotiation and payment of wages to employees applying the hourly wage payment method, ensuring that the wage according to the job or position of the employee working in one hour and completing the agreed labor norm or work must not be lower than the minimum hourly wage.

For employees who are paid weekly or daily or by product or by piecework, the salary of these forms of payment, if converted to monthly or hourly, must not be lower than the minimum monthly salary or minimum hourly salary. The salary converted to monthly or hourly based on normal working hours is chosen by the employer according to the provisions of the labor law as follows:

- The converted monthly salary is equal to the weekly salary multiplied by 52 weeks divided by 12 months; or the daily salary multiplied by the number of normal working days in a month; or the product-based salary, piecework salary performed during normal working hours in a month.

- Hourly salary is converted by weekly or daily salary divided by normal working hours per week or day; or product salary or contract salary divided by normal working hours to produce products or perform contract tasks.

The above Decree takes effect from July 1, 2022.

The adjustment of the minimum wage from July 1 is very necessary. This demonstrates the close and timely attention of the State to taking care of the lives of workers, especially after more than 2 years of being greatly affected by the Covid-19 pandemic. The adjustment level ensures compensation and a slight improvement compared to the minimum living standards of workers.

The Government's adjustment of the minimum wage from July 1 will meet the aspirations of workers, especially in the context of rising prices, and will actively contribute to maintaining stable labor relations in enterprises.