VietNamNet Bridge – The National Wage Council will replace the Ministry of Labor, War Invalids and Social Affairs to do the job of making decisions on minimum wages from next year onwards.

The council, which was set up by the Government in its Decree 49/2013 and is slated to start operation from early July, is responsible for analyzing the socioeconomic situation and living standards of people, and then forecast the subsistence needs of workers and their families. In addition, the council will check the compliance to regional minimum wages and submit wage proposals to the Government every year.

It will also study the minimum hourly wage for irregular jobs and review the geographical boundaries of each region that is assigned with a certain minimum salary. Moreover, it will conduct surveys and draw on experience from foreign countries.

This council will comprise 17 members representing the labor ministry, the Vietnam General Confederation of Labor, the Vietnam Chamber of Commerce and Industry, the Vietnam Co-operative Alliance, the Vietnam Association of Small and Medium Enterprises, and two industry associations whose members are labor-intensive firms.

Pham Minh Huan, deputy labor minister, has been picked to chair the council, which is designed to enforce the provisions on wages in the Labor Code, according to the labor ministry.

Tong Thi Minh, head of the Labor and Wages Department at the labor ministry, said the council would make the regional-minimum-wage setting process more transparent. With members representing the general labor confederation and industry associations, minimum wages are believed to better reflect the reality at enterprises and workers’ living conditions, she said.

The labor ministry will give the wage council suggestions during the calculation of regional minimum wages, she told the Daily.

Another new point is the companies wholly owned by the State will no longer apply the payroll scale set by the labor ministry, but develop their own scales under Decree 50/2013/ND-CP. Still, they have to ensure employees are paid in accordance with their performance and profits of employers.

If a company runs into losses, payments for its employees will equal the minimum wage multiplying a coefficient.

Many State-owned enterprises, despite their heavy losses, have constantly raised their payrolls. Minh explained some State groups are in charge of stabilizing the market, such as Vietnam Electricity Group (EVN), so their losses do not affect the pay hike.

Source: SGT