VCCI PROPOSES END TO MINIMUM WAGE HIKES FROM NEXT 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.

At the first meeting on the minimum wages in 2019, held by the National Wage Council in Hanoi on July 9, VCCI Vice Chairman Hoang Quang Phong said the VCCI had consulted domestic and foreign enterprises about the minimum wage spike next year, and most of them had agreed on the proposal.

The reason behind the proposal is that employers want to improve their payment capability and boost the training of workers to help them meet working requirements and raise labor productivity. Minimum wage hikes can be adopted later.

In addition, minimum wage spikes will put pressure on enterprises, particularly in terms of sharp increases in their expenditures for employees’ salaries and social and health insurance premiums, as well as for trade unions’ operations.

Enterprises’ payroll funds are used to pay the monthly salaries and allowances for employees covered by social insurance. The monthly salary, which is used as the basis for calculating social, health, unemployment, occupational accident and disease insurance premiums, must not be lower than the region-based minimum wage.

Mai Duc Chinh, vice chairman of the Vietnam General Confederation of Labor (VGCL), operating on behalf of employees, noted that Vietnam’s gross domestic product in the first half of the year had expanded 7.08% year-on-year, the highest first-half growth rate since 2011. Employees are entitled to enjoy this economic development achievement, Chinh added.

According to the Party Central Committee’s Resolution 27, the minimum wage must ensure the minimum living needs of workers and their families are met by 2020. To meet this goal, the VGCL proposed increasing the region-based minimum wage by 8% next year.

Doan Mau Diep, Deputy Minister of Labor, Invalids and Social Affairs and Chairman of the National Wage Council, said that Vietnam will continue revising the region-based minimum wage until 2020 to ensure the interests of employees, especially those on a low income.

According to Resolution 27, the government will not interfere in enterprises’ salary payment policies to encourage negotiations between employers and employees, Diep noted.

Prior to the meeting, Le Dinh Quang, deputy head of the Labor Relations Department under the Vietnam General Confederation of Labor, said the confederation had earlier proposed increasing region-based minimum wages next year by 7.5-8%, or VND190,000-300,000 per month, Thanh Nien newspaper reported.

The proposal was made based on a survey of laborers after Decree 141/2017/ND-CP on this year’s minimum wage came into force. Accordingly, the minimum wage, which accounts for 85% of the total income of laborers, can cover their basic daily needs but are not enough for savings.

Vu Quang Tho, head of the Institute for Workers and Trade Unions and a member of the National Wage Council, pointed out that the institute had initially proposed raising the minimum wage by 10% but had later revised down the rate to 8%. The institute noted that the 8% hike was reasonable to satisfy workers’ minimum living needs, offset price hikes and increase labor productivity.

Meanwhile, Pham Minh Huan, former Deputy Minister of Labor, Invalids and Social Affairs and ex-chairman of the National Wage Council, forecast a 5-6% increase in the minimum wage.

Nguyen Thi Lan Huong, former head of the Institute of Labor Science and Social Affairs, and Bui Sy Loi, deputy head of the Committee for Social Affairs of the National Assembly, shared the same view that a 6% hike was reasonable to balance the benefits to both enterprises and workers.

Last year, the National Wage Council decided to increase this year’s minimum wage by 6.5%. Accordingly, the minimum wage for enterprises operating in region one is up by VND230,000; in region two, it is up by VND210,000; region three, VND190,000; and region four, VND180,000.

Source: The Saigon Times