8 business associations seek delay in minimum wage increase

Eight business associations in Vietnam have proposed the government delay the 6% increase in the country’s region-based minimum wage until the beginning of 2023 instead of this July.

The organizations have sent their petition to the Prime Minister after the National Wage Council agreed on April 12 to raise the minimum wage by 6% from this July. They said their corporate members have been affected seriously by the pandemic over the past two years, therefore such a delay would help them much better.

Meanwhile, new pandemic outbreaks continue, said the associations, which represent labor-intensive sectors in the country.

The proposal came from Japan Business Association; Vietnam Association of Seafood Exporters and Producers; Vietnam Textile and Apparel Association; Vietnam Electronic Industries Association; Food and Foodstuff Association of Ho Chi Minh City; Vietnam Timber and Forest Products Association; Vietnam Plastics Association; and Vietnam Association of Motorcycle Manufacturers.

According to the National Wage Council’s wage increase plan for this July, the rise range is VND180,000-260,000 ($7.84-11.32). The increase for Region 1 is VND260,000 per month, while the rise for regions 2, 3 and 4 are VND240,000, VND210,000, and VND180,000, respectively.

If approved, the new minimum wages for the regions will be VND4.68 million ($204), VND4.16 million, VND3.64 million, and VND3.25 million per month, respectively.

The Vietnam General Confederation of Labor had earlier expected an increase of 7-8%, instead of 6% in order to better support employees.

Vietnam’s regional minimum wage is based on four separate benchmarks, established by living standards in each area. Region 1 is for Hanoi’s and Ho Chi Minh City’s urban areas; Region 2 for rural areas in the two megacities and major urban areas in the three centrally-managed cities of Hai Phong, Danang, and Can Tho.

Vietnam’s regional minimum wage is based on four separate benchmarks, established by living standards in each area. Region 1 is for urban Hanoi and Ho Chi Minh City; Region 2 for rural areas in the two megacities and major urban areas in the three centrally managed cities of Hai Phong, Danang, and Can Tho.

Region 3 covers provincial-level cities and the districts of Bac Ninh, Bac Giang, and Hai Duong provinces (all near Hanoi). The rest of the country is Region 4.