MINIMUM REGIONAL WAGE HIKE FOR 2020 SET AT 5.5%

The National Wage Council today, July 11, finalized a 5.5% minimum regional wage hike for 2020, following two meetings to discuss the matter.

Specifically, the minimum wage in Region 1 comprising more developed localities rose by VND240,000 to VND4.42 million per month, while that in Region 2 was hiked by VND210,000. The lowest wages in Regions 3 and 4 picked up by VND180,000 and VND150,000, respectively, according to Nguoi Lao Dong newspaper.

Doan Mau Diep, deputy minister of Labor, Invalids and Social Affairs and chairman of the National Wage Council, noted that the increase was established after the council considered the proposals of 6.7% by the Vietnam General Confederation of Labor and 4% by the Vietnam Chamber of Commerce and Industry (VCCI).

Le Dinh Quang, deputy head of the Labor Relations Department, under the Vietnam General Confederation of Labor, explained that the minimum regional wage hike will put pressure on employers but encourage laborers to contribute to enterprises’ development.

The hike of 5.5% is expected to meet laborers’ basic needs, Quang added.

At the first meeting to discuss the minimum regional wage hike for 2020, the Vietnam General Confederation of Labor proposed three solutions, with a minimum wage hike of 6.52%-8.18% for next year. Meanwhile, VCCI representing employers suggested a rate of less than 3%.

VCCI Vice Chairman Hoang Quang Phong stated that even though the Government had earlier finalized a 5.3% minimum regional wage hike for 2019, 72.5% of enterprises have applied a hike of over 6%.

Therefore, the minimum regional wages cannot be increased to levels as high as those proposed by the confederation as they are beyond the capacity of most enterprises.

Prior to the second meeting of the National Wage Council, Pham Minh Huan, former deputy minister of Labor, Invalids and Social Affairs, told Thanh Nien Online newspaper that laborers expected higher wages but employers, especially owners of small enterprises and firms that need many employees, raised concerns over the possibility of an increase in extra working time being approved by the National Assembly amid unchanged labor productivity and stronger competition among enterprises.

Source: The Saigon Times