Region-based minimum wage to increase 6% from July

The government on Sunday approved the labor ministry's proposal to raise the country’s region-based minimum wage starting July.

With an average 6% increase, the new minimum wages for regions 1, 2, 3, and 4 will be VND4.68 million ($204), VND4.16 million, VND3.64 million, and VND3.25 million per month, respectively.

The country’s regional minimum wage is based on four separate benchmarks, determined 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 cities of Hai Phong, Danang, and Can Tho.

Region 3 covers provincial-level cities (not Hanoi, HCMC, Hai Phong, Danang and Can Tho) and the districts of Bac Ninh, Bac Giang, and Hai Duong provinces - all near Hanoi. The rest of the country is Region 4.

All the National Wage Council members had agreed with the proposed 6% hike, and suggested the government approve the plan, the Ministry of Labor, Invalids and Social Affairs stated.

Eight business associations in Vietnam had earlier proposed the government delay such wage increases until the beginning of 2023 instead of this July. They said their corporate members have been seriously affected by the pandemic over the past two years, therefore such a delay would help them better recover.

However, the labor ministry wrote in its proposal that the 6% rise is not much - just sufficient for workers to make ends meet, and that at present, most employers are paying more than minimum levels. "Therefore, such a wage increase would not affect them much."