Minimum wages in some places may increase by more than 20% from next year.
The reason is that in addition to increasing the minimum wage, some localities are expected to change their regional status from region IV to region III or from region III to region II.
Recently, the National Wage Council has finalized the final plan to adjust the regional minimum wage for 2020 to increase by 5.5% compared to 2019.
According to this increase rate, the minimum wage for contract workers in region I from 2020 will be 4.42 million/month, an increase of 240,000 VND compared to the present; region II will be 3.92 million/month, an increase of 210,000 VND; region III will be 3.43 million/month, an increase of 180,000 VND; and region IV will be 3.07 million/month, an increase of 150,000 VND.
However, in reality, workers in some localities may see their minimum wages increase by up to 20.6% from next year.
The reason is that the Government is drafting a decree regulating regional minimum wages for employees working under labor contracts, applicable from January 1, 2020.
In addition to stipulating a 5.5% increase in regional minimum wages from next year, this draft also adjusts many regions from region IV to region III, from region III to region II.
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| Minimum wage for workers by region |
Specifically, Ba Tri, Binh Dai, Mo Cay Nam districts of Ben Tre province; Dong Son, Quang Xuong districts of Thanh Hoa province; Cua Lo town, Nghi Loc, Hung Nguyen districts of Nghe An province; Cam Khe district of Phu Tho province are expected to be adjusted from region IV to region III.
According to calculations, the regional minimum wage after increasing by 5.5% as agreed upon by workers in the above local group will be 3.07 million VND, an increase of 150,000 VND compared to the old minimum wage.
However, due to being transferred from region IV to region III, workers in these localities will receive the new minimum wage in 2002 of 3.43 million VND/person/month.
Thus, compared to the current minimum wage, workers in the above localities can receive a minimum wage increase of VND510,000 per month, equivalent to an increase of 17.5%.
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| The regional minimum wage is the lowest level that serves as a basis for businesses and employees to negotiate and pay wages. Illustrative photo |
Similarly, the draft also stipulates that localities such as Ben Tre city and Chau Thanh district of Ben Tre province; Dong Phu district of Binh Phuoc province are expected to be adjusted from region III to region II.
Accordingly, the regional minimum wage for workers in these areas will increase from the current VND3.25/month to VND3.92/month from next year, an increase of about 20.6%.
If the new draft decree is issued, it will replace Decree 157/2018/ND-CP dated November 16, 2018 of the Government regulating regional minimum wages 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 in region I is 4.18 million VND; region II is 3.71 million VND; region III is 3.25 million VND; and region IV is 2.92 million VND.