Regional minimum wage applicable to businesses from 2015

The Government has just issued a Decree regulating regional minimum wages for employees working in enterprises, cooperatives, cooperative groups, farms, households, individuals and agencies and organizations that hire employees under labor contracts, replacing Decree 182/2013/ND-CP dated November 14, 2013.

The Decree also clearly states that the above regional minimum wage is the lowest level that serves as a basis for businesses and employees to negotiate and pay wages. Illustrative photo: VNA

Subjects of application include enterprises established, organized, managed and operating under the Law on Enterprises (including foreign-invested enterprises in Vietnam that have not re-registered or have not converted according to regulations); cooperatives, cooperative unions, cooperative groups, farms, households, individuals and other organizations in Vietnam that hire workers under labor contracts; foreign agencies, organizations, international organizations and foreign individuals in Vietnam that hire workers under labor contracts (except in cases where international treaties to which Vietnam is a member have provisions different from those of this Decree).

The regional minimum wage applicable to enterprises from January 1, 2015 is as follows: Region 1: 3.1 million VND/month; Region 2: 2.75 million VND/month; Region 3: 2.4 million VND/month; Region 4: 2.15 million VND/month. Thus, the new regional minimum wage is about 250,000-400,000 VND/month higher than the current wage.

The Decree also clearly states that the above regional minimum wage is the lowest level used as a basis for enterprises and employees to negotiate and pay wages, in which the wage paid to employees working under normal working conditions, ensuring enough normal working hours in a month and completing the agreed labor norms or work must not be lower than the regional minimum wage for untrained employees doing the simplest work; at least 7% higher than the regional minimum wage for employees who have undergone vocational training (including employees trained by the enterprise itself).

Based on the above-mentioned regional minimum wage and the contents of the agreement in the labor contract with the employee, the collective labor agreement or the enterprise's regulations, the enterprise shall coordinate with the grassroots trade union executive board and the employee to negotiate and determine the adjustment of the salary levels in the salary scale, salary table, salary levels stated in the labor contract and the salary levels paid to the employee accordingly, ensuring the provisions of labor law and a reasonable correlation between untrained employees and trained employees and employees with high professional and technical qualifications, and between newly recruited employees and employees with seniority in the enterprise.

When implementing the regional minimum wage, enterprises are not allowed to eliminate or reduce wage regimes when employees work overtime, work at night, work in arduous or hazardous working conditions, in-kind compensation regimes for arduous or hazardous job titles and other regimes according to the provisions of labor law.

Allowances, subsidies, and bonuses prescribed by the enterprise shall be implemented according to the agreement in the labor contract, collective labor agreement, or in the enterprise's regulations.

According to Vietnam+