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, individuals who hire and use employees to work for them according to 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 260,000 VND, from 4,420,000 VND/month to 4,680,000 VND/month. Region II increased by 240,000 VND, from 3,920,000 VND/month to 4,160,000 VND/month. Region III increased by 210,000 VND, from 3,430,000 VND/month to 3,640,000 VND/month. Region IV increased by 180,000 VND, from 3,070,000 VND/month to 3,250,000 VND/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 (until 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 locations with different minimum wages, the minimum wage prescribed for the location in which the unit or branch operates shall apply.

Employers operating in industrial parks and export processing zones located in areas with different minimum wages shall apply the locality 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 has 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 minimum monthly wage is the lowest wage level used as a basis for negotiating and paying wages to employees applying the monthly salary payment method, ensuring that the wage level 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 minimum monthly wage.

The minimum hourly wage is the lowest wage used as a basis for negotiation and payment 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, daily, piecework or piecework, the salary of these forms of payment, if converted monthly or hourly, must not be lower than the minimum monthly wage or minimum hourly wage. The salary converted monthly or hourly based on normal working hours chosen by the employer according to the provisions of the labor law is 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 per day; or product salary or contract salary divided by normal working hours to produce products or perform contracted 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.