REGION-BASED MINIMUM WAGES

I.       LEGAL ISSUES

Definiton and application of region-based minimum wages

II.      LEGAL BASE

1. Labor Code of the National Assembly of the Socialist Republic of Vietnam No. 10/2012/QH13 issued on June 18, 2012 (“Labor Code 2012”)
2. Decree no. 141/2017/ND-CP issued on December 07, 2017 of the Government  providing for region-based minimum wages applied to employees working under labour contracts (“Decree no. 141/2017/ND-CP”)

III.    CONSULTANCY CONTENT

Definition and application of minimum wages?

Region-based minimum wage is the lowest rate of payment paid to a worker who perform the simpliest work, under normal working conditions and shall meet the minimum living requirements of workers and their families. Depending on the region, the Government will offer the minimum wage applied in that region, which is called the region-based minimum wages. The wage paid to a worker must not be lower than this.

According to Article 3 of Decree no. 141/2017/ND-CP, the region-based minimum wages up to 2018 are specified as follows:

The list of subregions applying region-based minimum wages is laid down in the Appendix in the Decree no. 141/2017/NĐ-CP.

In order to apply region-based minimum wages, Clause 1 of Article 5 Decree no. 141/2017/ND-CP was specifically regulated as follows:

- The wag is not be lower than the region-based minimum wage paid to an unskilled worker who performs simplest duties; and  

- The wage shall be at least 7% higher than the region-based minimum wage paid to skilled workers. (For example: Undergraduate education degrees, bachelor's degrees, master's degrees, ect.) as detailed in Clause 2 of this Article)

For example: If you have graduated from university and work in Hanoi City (Region-based I), the minimum wage you will receive is:

3.980.000 x 7% = 4.258.600

(Four million two hundred fifty eight thousand six hundred VND)