Increasing retirement age, what's new in the Labor Law?

Men gain 2 years, women gain 5 years

The draft of the revised Labor Code has been implemented by the Ministry of Labor, Invalids and Social Affairs since 2016. When Resolution 27-28 of the Central Committee was issued, this draft law continued to be revised accordingly. Last August, the draft of the revised Labor Code had some further revisions compared to the previously published drafts.

Regarding the increase in retirement age (according to Resolution 28), the Ministry of Labor, Invalids and Social Affairs proposed in the draft law: From January 1, 2021, each year will increase by 3 working months for male workers and 4 months for female workers, until men reach 62 years old and women reach 60 years old (currently women retire at 55 years old and men at 60 years old). Workers with poor health, doing heavy or hazardous work will be allowed to retire before the above age (early retirement). Highly skilled and technical workers, those working in management positions and some other special cases will be allowed to work beyond the above age but not more than 5 years.

It is possible that from 2021, the retirement age of workers will increase compared to the current age.

Regarding wages, implementing Resolution 27, the bill introduces a new definition of wages: Wages include wages based on work or position (not lower than the minimum wage) and other additional allowances provided in contracts and collective labor agreements. This provision is intended to prevent businesses from “circumventing the law” by offering many levels of subsidies and allowances to increase income for employees but not included in wages, in order to reduce other contributions (such as insurance, union fees).

The bill also adds a regional minimum wage per hour (in addition to per month), to apply to irregular and overtime work.

Double overtime

Regarding overtime, the drafting team of this bill proposed that the working hours in a day (both official and overtime) should not exceed 12 hours, and the total overtime hours in a year should not exceed 400 hours. There is no regulation on the maximum overtime hours in a week or month (to suit businesses that produce according to orders). The total overtime hours above are doubled compared to the current overtime hours (not exceeding 200 hours in a year).

Along with increasing overtime hours, the Ministry of Labor, Invalids and Social Affairs also proposed an additional overtime wage plan (in addition to the current regulations, overtime wages are 150-300% higher than normal wages). Accordingly, the drafting unit proposed overtime wages to be calculated according to a scale, such as for overtime on weekdays, the first hour's wage is 150% of the regular hourly wage, the following hours are at least 200%; similarly, on weekly days off, the minimum overtime wage is 300% (from the 3rd hour) and on holidays is 400%.

Along with increasing overtime hours, the Ministry of Labor, Invalids and Social Affairs also proposed an additional overtime wage plan (in addition to current regulations, overtime wages are 150 - 300% higher than normal wages).

Regarding the organization representing workers at enterprises (in addition to the current trade union organization), the draft law allows workers to establish, join, and operate a labor representative organization at their workplace. This organization operates independently and equally with the trade union organization, carrying out activities to protect the rights of union members. To be allowed to establish, the organization representing workers must be licensed, have an organizational structure, operating regulations, and must have at least 20 union members or more...

Minister of Labor, Invalids and Social Affairs Dao Ngoc Dung - Head of the drafting committee of this bill said that the Labor Code has a profound impact on society, related to the rights and interests of workers. This amendment aims to comprehensively transform the law, concretize the Party's policies and guidelines, in accordance with the 2013 Constitution; ensure the consistency of the promulgated laws, at the same time resolve practical problems, contribute to perfecting the labor market institution, international integration...

Regarding retirement age, Mr. Dung said that Resolution 28 of the Central Committee has clearly oriented this content. However, it is important to specify it for each group of subjects and each field and profession. According to the roadmap, it is expected that by the end of this year, the Ministry of Labor, Invalids and Social Affairs will submit it to the Prime Minister, and in early 2019, it will submit it to the National Assembly Standing Committee; the draft law will be submitted to the National Assembly for comments at the May 2019 session and approved at the October 2019 session.

The draft Labor Code (amended) continues to retain specific regulations for female workers, such as work during pregnancy and maternity leave. In particular, the draft law still retains the regulation: Female workers who are raising children under 12 months old are entitled to 60 minutes off each day during working hours and still receive their salary...