Regional minimum wage increase from January 1, 2018

From January 1, 2018, the regional minimum wage will be applied from VND 2,760,000 to VND 3,980,000/month for employees working under labor contracts.

The Government has just issued Decree No. 141/2017/ND-CP stipulating regional minimum wages for employees working under labor contracts.

Accordingly, the subjects of application include: Employees working under labor contracts as prescribed by the Labor Code; enterprises established, organized, managed and operated under the Law on Enterprises; cooperatives, cooperative unions, cooperative groups, farms, households, individuals and other organizations of Vietnam that hire employees under labor contracts; foreign agencies, organizations, international organizations and foreign individuals in Vietnam that hire employees under labor contracts (except in cases where international treaties to which the Socialist Republic of Vietnam is a member have provisions different from those of this Decree).

The regional minimum wage applicable to employees working in enterprises from January 1, 2018 is as follows: Region I: VND 3,980,000/month; Region II: VND 3,530,000/month; Region III: VND 3,090,000/month; Region IV: VND 2,760,000/month. Thus, the new regional minimum wage is about VND 180,000-230,000/month higher than the current wage.

The area applying the regional minimum wage is regulated according to administrative units at district, town and provincial city levels.

The Decree clearly states that enterprises operating in a specific area shall apply the regional minimum wage prescribed for that area. In case an enterprise has units or branches operating in areas with different regional minimum wages, the unit or branch operating in the specific area shall apply the regional minimum wage prescribed for that area.

Enterprises operating in industrial parks and export processing zones located in areas with different regional minimum wages shall apply the area with the highest regional minimum wage.

Enterprises operating in an area that has changed its name or split shall temporarily apply the regional minimum wage prescribed for the area before the name change or split until the Government has new regulations.

Enterprises operating in a newly established area from one or more areas with different regional minimum wages shall apply the regional minimum wage according to the area with the highest regional minimum wage.

In case an enterprise operates in a provincial city newly established from one or more localities in region IV, the regional minimum wage prescribed for the remaining provincial cities shall apply.

The above-mentioned 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 ensure: Not lower than the regional minimum wage for employees doing the simplest work; at least 7% higher than the regional minimum wage for employees doing work that requires employees to have undergone vocational training according to regulations.

When implementing the regional minimum wage prescribed in this Decree, enterprises are not allowed to eliminate or reduce wage regimes when employees work overtime, work at night, work in arduous and hazardous working conditions, in-kind allowances for arduous and hazardous job titles and other regimes as prescribed by labor laws.

Other allowances, supplements, 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 chinhphu.vn