REGIONAL MINIMUM WAGE FROM JULY 1, 2024

I. The schedule of regional minimum wage increase in 2024

According to the Draft Decree prescribing the regional minimum wage, the time to apply the new regional minimum wage is from July 1, 2024.

II. How does the regional minimum wage change?

     – The Ministry of Labor – Invalids and Social Affairs is drafting a Decree regulating the minimum wage for employees working under labor contracts. Accordingly, the Ministry proposes to adjust the minimum wage by 6% compared to the current level.

     – On January 12, 2024, the National Salary Council issued report No. 02/BC-HDTLQG to the Government recommending adjusting the regional minimum wage to an average increase of 6%, applicable from July 1, 2024.

     – From July 1, 2024, the salary policy will undergo comprehensive reform Resolution 27-NQ/TW In 2018 of the Seventh Conference of the 12th Central Committee of the Communist Party of Vietnam, public sector salaries will increase, accordingly, there needs to be an adjustment in the minimum salary of the business sector to ensure general correlation.

The change in the regional minimum wage is intended to reflect the current economic situation and living standards while ensuring that employees have a basic income level consistent with the cost of living.

Accordingly, the regional minimum wage applied in 2024 will have 2 stages:

     (1) From January 1, 2024 to June 30, 2024: the regional minimum wage applies according to Decree 38/2022/ND-CP.

     (2) From July 1, 2024 to December 31, 2024: Apply the new regional minimum wage (an increase of 6% compared to the first 6 months of 2024).

III. The regional minimum wage applies from July 1, 2024

According to the Draft Decree prescribing the regional minimum wage for employees working under employment contracts, from July 1, 2024, the regional minimum wage is provided for as follows:

1. Changes in social insurance payment rates when applying the new regional minimum wage in 2024

     – From July 1, 2024, for employees in Region I, the Salary for Social Insurance Contributions will not be lower than 4.960.000/month.

     – For employees in Region I (with the expected regional minimum wage of 4.960.000 VND/month), the maximum Salary for Unemployment Insurance Contributions in a month can be up to 99,2 million VND.

2. Notes when applying the new regional minimum wage in 2024

     – When implementing the regional minimum wage, enterprises are not allowed to cut or reduce salary regimes when employees work overtime, work at night or work in heavy and hazardous working conditions. In addition, enterprises are not allowed to eliminate in-kind compensation for heavy, hazardous occupations and other benefits according to the provisions of Labor Code.

     – Parties affected when the regional minimum wage in 2024 changes

          + Employees who work under labor contracts as prescribed the provisions of the Labor Code.

          + Enterprises are established, organized, managed and operated as prescribed the Law on Enterprises.

          + Cooperatives, cooperative unions, cooperative groups, farms, family households, individuals and other Vietnamese organizations that hire employees under employment contracts.

          + Foreign agencies, organizations, international organizations and foreign individuals in Vietnam hire employees under employment contracts (except for international treaties to which the Socialist Republic of Vietnam is a member have regulations different from the provisions of this Decree).

References:

– The Draft: https://xaydungchinhsach.chinhphu.vn/toan-van-du-thao-nghi-dinh-quy-dinh-muc-luong-toi-vung

– Decree 38/2022/ND-CP: https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Nghi-dinh-38-2022-ND-CP

– Resolution 27-NQ/TW: https://thuvienphapluat.vn/van-ban/Lao-dong-Tien-luong/Nghi-quyet-27-NQ-TW-2018