The draft decree on minimum wages of workers under labor contracts is open for public opinion. The document, drafted by the Ministry of Labor, War Invalids and Social Affairs (MOLISA), stipulates monthly minimum wages and hourly minimum wages.

The subjects to be covered by the decree are those who work under labor contracts in accordance with the Labor Code; those who use laborers in accordance with the Labor Code, including businesses operating under the Enterprise Law; and agencies, organizations, cooperatives, households and individuals who hire and use workers under negotiations between the two parties. Also, other agencies, organizations and individuals related to the implementation of minimum wage as stipulated in the decree.

According to MOLISA, the minimum wages stipulated in Decree No 38 which took effect on July 1, 2022, ensured minimum living standards of workers and their families; help enlarged coverage of minimum wages to the groups of laborers working flexibly and part time who were not protected previously; suited enterprises’ payment capability, especially after a long period of suffering from Covid-19; helped the recovery of the labor market; and helped stabilize and develop enterprises’ production and business activities.

However, some new problems have arisen which require the adjustment of minimum wage levels. The factors related to socio-economic development, labor market and enterprises’ capability have improved. The macro economy continues to be stable with GDP growth rate of 5.05 percent.

Also, the labor market continues its recovery trend, while the production and business of enterprises are getting better, and workers’ incomes have increased.

Meanwhile, the real value of minimum wages stipulated in Decree 38/2022 has decreased because of a CPI (consumer price index) increase. With the CPI predicted to increase by 4-4.5 percent in 2024, these minimum wages will no longer ensure minimum living standards for workers and their families in the second half of 2024 (4 percent lower).

The currently applied minimum wages were defined by zones, but they have become unreasonable because of changes in administrative boundaries.

Therefore, after considering the recommendation by the National Wage Council after the session on January 12, 2024, MOLISA has proposed raising minimum wages by 6 percent, starting from July 1, 2024.

The proposed new minimum wages are as follows: VND4.96 million for Zone 1, VND4.41 million for Zone 2, VND3.86 million for Zone 3 and VND3.45 million for Zone 4.

The minimum wages are expected to increase by VND200,000-280,000 a month compared with current levels.

Vu Diep