VietNamNet Bridge – The Ministry of Labour, Invalids and Social Affairs is completing a draft decree to increase the minimum wage from October 1, says Deputy Minister Pham Minh Huan.

Speaking at a conference on a minimum wage rise on Wednesday, Huan said the ministry had worked with relevant ministries and agencies to raise the salary on October 1 instead of January 1, three months ahead of the planned schedule.

The salary hike would be made earlier because public employee salaries had not risen along with inflation, Huan said.

The move would help consolidate salary levels in economic sectors, enhancing the competitiveness among enterprises while improving workers' living conditions, he said.

Huan said the rise was based on four elements: the Consumer Price Index, Gross Domestic Product, the average salary and minimum living standards.

According to the draft decree, the minimum salary of local enterprises and foreign-invested enterprises will be applied at the same levels.

There are different levels of minimum wages for four regions in the country, with the first at VND1.9 million (US$93), the second at VND1.73 million ($84), the third at VND1.55 million ($75) and the fourth at VND1.44 million ($70).


Employees to receive allowance

The Ministry of Finance has agreed to give a minimum allowance of VND250,000 ($12.5) for employees from August 10.

Specifically, employees who have signed labour contracts with State-owned one-member limited liability companies and non-State enterprises since April and had a monthly salary of VND2.2 million ($107) or less would be eligible for the allowance.

Based on their financial funds, enterprises would have different allowance payment for their labourers, but at least VND250,000 as required. Enterprises would not be allowed to use this amount of money for other purposes such as social insurance payments, unemployment and health insurance payments or trade union fees.

This means the minimum salary in domestic enterprises increases by VND500,000-570,000 ($25-$28) and that of foreign-invested enterprises by VND300,000-380,000 ($15-$19).

According to Ngo Chi Hung, deputy head of Ha Noi Industrial and Export Processing Zone Management Board, the pay rise was essential to improve the relationship between employers and employees and to minimise strikes in industrial zones.

In the first six months of this year, 35 strikes occured in industrial and processing zones in Ha Noi. All of the participants asked for a pay rise, Hung said.

Le Anh Tuan, a worker in Bac Thang Long Industrial Zone in Ha Noi, said although his payment was VND3 million ($147), much higher than other workers in the city, he found it difficult to live on the wage.

"My wife and son have gone back to live with my parents in Phu Tho Province after a time living in Ha Noi. Everything became more expensive and we could hardly handle it," Tuan said.

Surveys from the Viet Nam General Confederation of Labour showed that the income of workers in Ha Noi and HCM City was between VND1.8 million ($88) and VND2.5 million ($122). This payment was said to be quite low in the context of soaring goods prices.

However, Viet Nam Textile and Apparel Association vice chair Dang Phuong Dung said, the wage rise would be a burden for enterprises.

Dung said the prices of input materials kept increasing remarkably, raising production costs for companies. Thus, enterprises were forced to reduce their workforces, which meant the rate of unemployment would increase.

Nguyen Van Thanh, owner of Minh Thanh Noodle Export Enterprises, in northern Phu Tho Province, said his workers received a payment of VND1.5 million per month but many workers didn't get that much.

Thanh said enterprises might hire temporary workers to cut down the cost of social and health insurances and pay.

The Ministry of Labour, Invalids and Social Affairs will gather opinions on the issue from enterprises and local authorities before July 21.

The draft decree will come into effect in October if it is approved by the Government.

VietNamNet/Viet Nam News