Minimum wages in some areas could increase by more than 20% starting next year.
The reason is that, in addition to increasing the minimum wage, some localities are expected to be reclassified from Region IV to Region III or from Region III to Region II.
Recently, the National Wage Council finalized the plan to adjust the regional minimum wage for 2020, increasing it by 5.5% compared to 2019.
According to this increase, the minimum wage for contract workers in Region I from 2020 will be 4.42 million VND/month, an increase of 240,000 VND compared to the current level; Region II will be 3.92 million VND/month, an increase of 210,000 VND; Region III will be 3.43 million VND/month, an increase of 180,000 VND; and Region IV will be 3.07 million VND/month, an increase of 150,000 VND.
However, in reality, workers in some localities may see a minimum wage increase of up to 20.6% starting next year.
The reason is that the government is drafting a decree stipulating the regional minimum wage for employees working under labor contracts, effective from January 1, 2020.
In addition to stipulating a 5.5% increase in the regional minimum wage starting next year, this draft also adjusts several regions, moving them from Region IV to Region III and from Region III to Region II.
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| Minimum wage for workers in different regions |
Specifically, the districts of Ba Tri, Binh Dai, and Mo Cay Nam in Ben Tre province; Dong Son and Quang Xuong districts in Thanh Hoa province; Cua Lo town, Nghi Loc and Hung Nguyen districts in Nghe An province; and Cam Khe district in Phu Tho province are expected to be reclassified from region IV to region III.
According to calculations, the regional minimum wage after a 5.5% increase, as agreed upon by workers in the aforementioned localities, will be 3.07 million VND, an increase of 150,000 VND compared to the previous minimum wage.
However, due to being reclassified from Region IV to Region III, workers in these localities will receive the new minimum wage for 2002, which is 3.43 million VND per person per month.
Therefore, compared to the current minimum wage, workers in these localities could receive a minimum wage increase of 510,000 VND per month, equivalent to a 17.5% increase.
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| The regional minimum wage is the lowest level used as a basis for businesses and employees to negotiate and determine wages. (Illustrative image) |
Similarly, the draft also stipulates that localities such as Ben Tre city and Chau Thanh district in Ben Tre province; and Dong Phu district in Binh Phuoc province are expected to be reclassified from region III to region II.
Accordingly, the regional minimum wage for workers in these areas will increase from the current 3.25 VND/month to 3.92 VND/month from next year, an increase of approximately 20.6%.
If the new draft decree is issued, it will replace Decree 157/2018/ND-CP dated November 16, 2018, of the Government, which stipulates the regional minimum wage for employees working under labor contracts.
According to Decree 157/2018/ND-CP, the regional minimum wage in 2019 also increased by an average of 5.3% compared to 2018.
The current regional minimum wage for workers is VND 4.18 million in Region I; VND 3.71 million in Region II; VND 3.25 million in Region III; and VND 2.92 million in Region IV.
