Regional minimum wage increase 2017: Final level 7.3%

The average increase of 7.3% in regional minimum wages for employees in enterprises in 2017 has received the highest consensus of all parties ever.

Deputy Prime Minister Vuong Dinh Hue has just agreed with the proposal of the National Wage Council, adjusting the regional minimum wage in 2017 to increase from 180,000 - 250,000 VND compared to 2016, equivalent to 7.1% - 7.5%, an average of 7.3%. Of which, regions I and II have an increase of 7.1%, region III increased by 7.4% and region IV increased by 7.5%.

Deputy Prime Minister Vuong Dinh Hue agreed with the proposal of the National Wage Council on the adjustment of regional minimum wages in 2017. Illustrative photo: VNA

The above decision of the Deputy Prime Minister was made at the meeting of the Central Steering Committee on reforming wage policies, social insurance and incentives for people with meritorious services, giving opinions on the plan to adjust the regional minimum wage on the afternoon of September 7.

According to Deputy Minister of Labor, War Invalids and Social Affairs Pham Minh Huan, adjusting the regional minimum wage in 2017 is necessary. This wage is basically approached according to market principles.

The average increase of 7.3% in the regional minimum wage for employees in enterprises in 2017 has received the highest consensus from all parties so far. The Ministry is drafting a Decree to collect opinions from ministries, branches and localities before submitting it to the Government for consideration and promulgation.

Deputy Minister Pham Minh Huan said that implementing the above plan will ensure real wages for workers, improve labor productivity by about 2 - 2.5% to move towards a roadmap to ensure minimum needs of workers.

The adjustment of the regional minimum wage in 2017 achieved the highest consensus among all parties ever. Photo: Tran Le Lam-VNA

The above plan also takes into account the difficult conditions of employment, unemployment, production and business of enterprises, especially in the context of 2016-2017 when implementing the Law on Social Insurance, social insurance is paid on both salary and salary allowance; the impact on the cost of enterprises is moderate, contributing to gradually ensuring the minimum living needs of employees, creating favorable conditions for enterprises to produce and do business.

The difficulty and challenge raised by the Deputy Minister is that the cost of enterprises increases when they have to adjust salaries for employees and increase social insurance contributions. Currently, the total social insurance contribution is 32.5% of salary, of which the employer has to pay 22%.

Many employers believe that the social insurance contribution rate is too high and should be reduced to 18%. Mr. Pham Minh Huan said that the National Wage Council has calculated and requested to reduce the contribution rate of some social insurance costs for businesses.

Speaking at the meeting, Deputy Prime Minister Vuong Dinh Hue, Head of the Central Steering Committee on reforming wage policies, social insurance and incentives for people with meritorious services, directed the Ministry of Labor, War Invalids and Social Affairs to urgently complete the process of assessing and collecting opinions from ministries, branches and business associations on the plan to increase the regional minimum wage in 2017, and submit it to the Prime Minister for consideration and signing in September 2016.

The Deputy Prime Minister requested the Ministry of Labor, War Invalids and Social Affairs to preside over and coordinate with ministries and branches to research and propose to supplement and amend the bases for determining regional minimum wages in the revised Labor Code, in accordance with reality; strengthen solutions to provide labor market information to ensure social consensus in agreeing on annual regional minimum wage increases.

In addition to the need for a minimum standard of living, a number of factors must be taken into account, such as the relationship between increased labor productivity and wage growth, factors related to the competitiveness of enterprises, and the building of harmonious, stable and progressive labor relations in enterprises.

According to VNA