Aug 18, 2012

Vietnam - Minimum wage may rise 35 percent

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VietNamNet Bridge – From January 1, 2013, minimum salary may rise by VND700,000 ($35) to the highest level of VND2.7 million ($135) per month, according to a proposal of the Ministry of Labor, War Invalids and Social Affairs (MoLISA).

In a draft decree on minimum wage, published on August 16, the ministry proposed two plans.

The first plan: the minimum salary for enterprises in Region 1 will rise by VND700,000, to VND2.7 million. It will be VND2.4 million ($120), VND2.13 million and VND1.93 million for workers of enterprises in Region 2, 3 and 4.

The second plan: The highest level for Region 1 is VND2.5 million and the lowest level of VND1.8 million for Region 4.

If the decree is approved, the new minimum salary will take effect from January 1, 2013.

A minimum wage is the lowest monthly remuneration that employers may legally pay to workers. Equivalently, it is the lowest wage at which workers may sell their labor.

The draft decrees encourage employers to pay more than minimum wage to workers.

It also stipulates that the lowest wage paid for trained workers must be at least 7 percent higher than the minimum wage.

In fact, minimum wage is only used as reference for employers to build their wage payrolls and to calculate insurance for workers. Real income of workers at all businesses is higher than the minimum wage.

The minimum wage in Vietnam is also said to be backward compared to the real life. A survey in 2011 by the Vietnam Labor Confederation showed that the minimum spending per month of people in Region 1-5 are VND3.04 million – VND2.86 million – VND2.66 million – VND2.47 million. Meanwhile, the highest minimum wage was VND1.55 million.

At a seminar in May, Mr. Dang Quang Dieu, director of the Institute for Worker and Trade Union Research, said that in the last 20 years, minimum wage in Vietnam has never reached the minimum living standards.

Compiled by Thu Ha


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