Business News

According to Government Decree 143/2018/ND-CP issued on October 15, 2018 and put into force on December 1, 2018, providing details on enforcement of compulsory social insurance for foreign workers working in Vietnam under the Law on Social Insurance and the Law on Occupational Safety and Health. There are four cases that foreign workers are entitled to receive one-time social insurance.

The Government has issued a decree to update provisions of the Labour Code relating to wages. The newly issued decree, which will take effect from November 1 this year, details regulations for wage scales, payroll and labour productivity norms.

An increase in the minimum wage moved a step closer yesterday after the National Wage Council agreed to increase basic salaries. The committee confirmed they will look at a rise of more than 5 per cent compared to last year.

The Vietnam Chamber of Commerce and Industry (VCCI), representing employers in the nation, has suggested keeping region-based minimum wages unchanged from next year as annual minimum wage hikes place a heavy burden on enterprises.

The minimum wage will be officially increased from January 1, 2018 by an extra VND180,000-230,000 ($8.07-10.13), depending on the region. The government has issued Decree No.141/2017/ND-CP, amending regional minimum wages for workers employed under a labour contract. Accordingly, the increase stands at an average of 6.5 per cent (See chart below).

The minimum wage increase, coupled with the increase for social insurance and union fees, is putting financial burdens on enterprises operating in labour-intensive sectors, such as the garment and textile sector.

The forthcoming spikes in the region-based minimum wages are expected to improve workers' incomes but production costs in labor-intensive industries will certainly pick up.

Increasing the regional minimum wage has raised concerns over a potential trade-off with social allowances that would block the new wages from increasing employees' real income.