Vietnam to hike minimum wages by 5.5%

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Vietnam To Hike Minimum Wages By 5.5%

Vietnam will next year lift regional minimum salaries in the private sector by 5.5 per cent after labour and business representatives reached a consensus on the issue, local media reported on July 12.

Vietnam’s National Wage Council decided that the monthly minimum salary for workers in Region I, urban areas of Hanoi and Ho Chi Minh City, will rise to 4.42 million dong (approximately $190), while that in Region II, rural areas of the two cities along with major urban areas in the country like Can Tho, Da Nang, Nha Trang and Hai Phong, is set to increase to 3.92 million dong ($169), Vietnam News reported.

Minimum salary for workers in Region III, cities and districts of northern Bac Ninh, Bac Giang and Hai Duong provinces, will climb up to 3.43 million dong ($148), and that in Region IV, the rest of Vietnam, is poised to rise to 3.07 million dong (§132).

The Vietnam Chamber of Commerce and Industry (VCCI), which represents employers, had suggested that the minimum wage should be hiked by four per cent. In turn, the Vietnam General Confederation of Labour had demanded a much higher increase and suggested three different options ranging from 6.52 per cent to 8.18 per cent.

Vietnamese Deputy Minister of Labour, Invalids and Social Affairs Doan Mau Diep stated the current minimum salary was meeting 95 per cent of the labour force’s minimum living standards, so the hike next year would make their lives “more comfortable.”

“The 5.5 per cent increase is higher than the said level of deficiency, and so both parties were agreeable,” he said.

Vietnam increased regional minimum salary by 7.3 per cent, 6.5 per cent and 5.3 per cent in 2017, 2018 and 2019, respectively.

Enterprises in Vietnam are not allowed to pay manual workers monthly salaries which are lower than the minimum salary. Salaries paid to employees who have undergone vocational training should be at least seven per cent higher than the minimum salary, according to the ministry.

The salary raise comes after a report by Washington-based Fair Labour Association determined that garment factory workers in Vietnam were not able to earn a living wage without working excessive overtime. The non-profit organisation came to this conclusion after it collected data over three years from 13,000 workers across 38 factories in the country.

Although the average garment factory worker in Vietnam earns more than double the country’s minimum wage and well above the International Poverty Line established by the World Bank, it was still not enough to cover all basic necessities, which forces most of them to work over 50 hours of overtime a month, the survey said.

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Vietnam will next year lift regional minimum salaries in the private sector by 5.5 per cent after labour and business representatives reached a consensus on the issue, local media reported on July 12. Vietnam’s National Wage Council decided that the monthly minimum salary for workers in Region I, urban areas of Hanoi and Ho Chi Minh City, will rise to 4.42 million dong (approximately $190), while that in Region II, rural areas of the two cities along with major urban areas in the country like Can Tho, Da Nang, Nha Trang and Hai Phong, is set to increase to 3.92...

Reading Time: 2 minutes

Vietnam To Hike Minimum Wages By 5.5%

Vietnam will next year lift regional minimum salaries in the private sector by 5.5 per cent after labour and business representatives reached a consensus on the issue, local media reported on July 12.

Vietnam’s National Wage Council decided that the monthly minimum salary for workers in Region I, urban areas of Hanoi and Ho Chi Minh City, will rise to 4.42 million dong (approximately $190), while that in Region II, rural areas of the two cities along with major urban areas in the country like Can Tho, Da Nang, Nha Trang and Hai Phong, is set to increase to 3.92 million dong ($169), Vietnam News reported.

Minimum salary for workers in Region III, cities and districts of northern Bac Ninh, Bac Giang and Hai Duong provinces, will climb up to 3.43 million dong ($148), and that in Region IV, the rest of Vietnam, is poised to rise to 3.07 million dong (§132).

The Vietnam Chamber of Commerce and Industry (VCCI), which represents employers, had suggested that the minimum wage should be hiked by four per cent. In turn, the Vietnam General Confederation of Labour had demanded a much higher increase and suggested three different options ranging from 6.52 per cent to 8.18 per cent.

Vietnamese Deputy Minister of Labour, Invalids and Social Affairs Doan Mau Diep stated the current minimum salary was meeting 95 per cent of the labour force’s minimum living standards, so the hike next year would make their lives “more comfortable.”

“The 5.5 per cent increase is higher than the said level of deficiency, and so both parties were agreeable,” he said.

Vietnam increased regional minimum salary by 7.3 per cent, 6.5 per cent and 5.3 per cent in 2017, 2018 and 2019, respectively.

Enterprises in Vietnam are not allowed to pay manual workers monthly salaries which are lower than the minimum salary. Salaries paid to employees who have undergone vocational training should be at least seven per cent higher than the minimum salary, according to the ministry.

The salary raise comes after a report by Washington-based Fair Labour Association determined that garment factory workers in Vietnam were not able to earn a living wage without working excessive overtime. The non-profit organisation came to this conclusion after it collected data over three years from 13,000 workers across 38 factories in the country.

Although the average garment factory worker in Vietnam earns more than double the country’s minimum wage and well above the International Poverty Line established by the World Bank, it was still not enough to cover all basic necessities, which forces most of them to work over 50 hours of overtime a month, the survey said.

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