Regional minimum wage to increase starting in July

A new decree raising the regional minimum wage for labourers was approved on June 12 by Deputy Prime Minister Pham Binh Minh.

The new regulation, coded 38/2022/ND-CP will come into effect on July 1.

The 6% increase is equivalent to a rise of VND260,000 (US$11.20) in Region 1, and VND240,000, VND210,000, and VND180,000 in Regions 2, 3, and 4, respectively.

The document also specifies that the minimum hourly wage will range from VND15,600 to 22,500 (US$0.70-1), which also depends on the region.

The geographical classification is determined based on the employer’s place of operation.

Region 1 covers Hanoi and Ho Chi Minh City's urban areas; Region 2 encompasses Hanoi and HCM City's rural areas, along with major urban areas in the country like Can Tho, Da Nang and Hai Phong; Region 3 covers provincial cities and the districts of Bac Ninh, Bac Giang and Hai Duong provinces; and Region 4 comprises the rest of the country.

The change is applicable to workers and employers under labour contracts in accordance with the Labour Code.

The resolution also defines minimum wage as the lowest amount that can be paid to an employee, which is the basis for negotiation and compensation, in the form of a monthly salary. This amount corresponds to the workload and job title in designated work hours, given that the employee fulfils their tasks as assigned.

For workers who are paid on a daily or weekly basis, or based on a piece rate, then their salary, when converted to the monthly or hourly rate, must not be lower than the minimum wage.