Region–based minimum wage to increase from January 1, 2020

Since January 1, 2020, the regional monthly minimum wages of four different regions in Viet Nam increase from VND150,000 to VND240,000 compared to the 2019.

Specifically, regional monthly minimum wages of four different regions in Viet Nam will be raised from VND 4.18 million to VND 4.42 million (up VND 240,000) for region 1, from VND 3.71 million to VND 3.92 million (up VND 210,000) for region 2, from VND 3.25 million to VND 3.43 million (up VND 180,000) for region 3, and from VND 2.92 million to VND 3.07 million (up VND 150,000) for region 4.

The region-wage minimum wage is the lowest wage amount which is paid to an employee performing the simplest job in normal working conditions and completing his labor norms and at least 7% higher than the region-based minimum wage paid to skilled workers.

Enterprises are not allowed to eliminate or reduce salary regime when employee works overtime or nighttime or subject to extremely heavy, dangerous, or toxic working conditions, perquisites for holders of hazardous and arduous working positions and other benefits as regulated in the Labor Code.

Other allowances, supplemental pay, subsidies or bonuses decided by enterprises shall be paid according to terms and conditions of the signed labor contracts, collective labor agreements or statutes of enterprises.

Principles for application of region-based minimum wages

Enterprise located in a specific subregion shall apply the respective minimum wage applied thereto.  In case that affiliates and/or branches of the same enterprise located in different subregions to which different region-based minimum wages apply, they must apply the respective minimum wages applied thereto.

If an enterprise is located in the industrial park or the export processing zone located in the territory containing two or more subregions to which different region-based minimum wages apply, the highest region-based minimum wage shall apply.

If an enterprise is located in the subregion which is renamed or divided, the region-based minimum wage applied to that subregion before it is renamed or divided shall still apply until regulations promulgated by the Government come into force.

If an enterprise is located in the subregion which is converted from a district to which a different region-based minimum wage applies or established by merger of two or more subregions to which different region-based minimum wages apply, it shall apply the highest region-based minimum wage. In case an enterprise is located in a provincial city which is established from one or more subregions in the region IV, it shall apply the region-based minimum wage applied to the remaining provincial cities of the region III as provided in Section 3 of the Appendix enclosed herewith.

By Thuy Dung