VIETNAM'S MINIMUM WAGES TO INCREASE BY 6.5 PER CENT IN 2018

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).

Region              Minimum wage in 2017         Minimum wage from early 2018
                         (million VND)                           (million VND)
Region I             3.75                                        3.98
Region II            3.32                                        3.53
Region III           2.90                                        3.05
Region IV           2.58                                        2.76

Before being submitted to the government for approval, the proposal to increase the minimum wage by an average 6.5 per cent was subject to heated debate. However, after three meetings, the local authorities and business associations reached a compromise over the proposal via a vote.

Notably, at the first meeting, various options for the raise were recommended, including increases of 5, 6, and 6.8 per cent. Specifically, the National Salary Council proposed the highest increase of 13.3 per cent, while the Vietnam Chamber of Commerce and Industry (VCCI) proposed an increase of less than 5 per cent or even keeping wages unchanged.

At the second meeting, after numerous discussions, there was a slight change in proposals. Notably, the National Salary Council recommended the figure of 8 per cent, while VCCI’s figure was 5 per cent. However, relevant authorities still failed to reach a compromise.

At the third meeting, Deputy Minister of Labour, Invalids and Social Affairs cum chairman of the National Salary Council Doan Mau Diep said that after discussions, the Vietnam General Confederation of Labour (VGCL) and VCCI put two figures (7 and 6.5 per cent) to vote. As the result, eight out of 14 members voted in favour of the 6.5 per cent plan, and the remaining members selected the 7 per cent plan.

Source: VIR