With the promulgation of Decree 38/2022/ND-CP changing the minimum wage of Vietnamese employees from July 2022, there are still many businesses and trained employees wondering whether this major change in the minimum wage affect the required 7% increase in the minimum wage for trained employees?
Article 3 of Decree 38/2022/ND-CP stipulating monthly and hourly minimum wages for employees working for regional employers, effective from July 1, 2022. Specifically, the regional and hourly minimum wages are as follows:
– Region I: 4,680,000 VND/month (22,500 VND/hour)
– Region II: 4,160,000 VND/month (20,000 VND/hour)
– Region III: 3,640,000 VND/month (17,500 VND/hour)
– Region IV: 3,250,000 VND/month (15,600 VND/hour)
The minimum wage is adjusted every year, except for 2021 and the first half of 2022 due to the impact of the Covid-19 pandemic. Currently, there is no regulation on the increase of the minimum wage in 2023. However, from July 1, 2023, the base salary in Vietnam will increase from 1.49 million VND/month to 1.8 million VND/month.
Will trained Vietnamese employees still receive a 7% incentive on minimum wage in 2023?
Clause 1, Article 5 of Decree No. 90/2019/ND-CP stipulating the regional minimum wage for employees working under labor contracts, regulating that the regional minimum wage is the lowest level as a basis for businesses and employees to negotiate and pay wages.
In particular, the salary paid to employees working under normal working conditions, ensuring enough normal working hours in a month and completing agreed labor norms or jobs must ensure:
a) Not lower than the regional minimum wage for employees doing the simplest jobs;
b) At least 7% higher than the regional minimum wage for employees who do jobs requiring employees who have undergone vocational training.
Decree 90/2019/ND-CP ("Decree 90") takes effect from January 1, 2020. Currently, Decree 90 is still in full force and effect, without any replacement, adjustment or supplemental documents.
Thereby, from July 1, 2022, Vietnamese employees working at the old minimum wage rate who have undergone vocational training as prescribed in Clause 2, Article 5 of Decree 90 will be increased to the new minimum wage of plus 7%.
For example, the minimum wage in Region I is 4,680,000 VND/month. The minimum wage of trained employees in Region I will be 4,680,000 x 107% = 5,007,600 VND.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
