Vietnam okays 6% minimum wage hike from July 2024

The National Wage Council voted Wednesday to have minimum wages in the country rise by 6% starting July 1, 2024.

Ngo Duy Hieu, deputy head of the Vietnam General Confederation of Labor, which heads labor unions across the country, said the hike was suitable and would meet minimum livelihood demands of workers.

He said workers understood that businesses were facing challenges at the moment.

The confederation will call on workers to improve their productivity to help businesses overcome challenges, and urge firms to expand their markets to gain more orders and create more work for employees, he added.

In a meeting of the wage council in August, the labor confederation had said that a minimum wage hike of 11.34% was needed to meet the minimum livelihood needs of workers and their families. However, in order to help businesses facing challenges, a lower rate has been suggested, said Le Dinh Quang, deputy head of the confederation’s labor relations department.

Hoang Quang Phong, deputy head of the Vietnam Chamber of Commerce and Industry (VCCI), said the employers’ side had proposed a lower increase first, but agreed to the 6% hike, eventually.

While the hike adds to the heavy challenges facing firms, especially in industry, commerce and services, agreeing to it showed businesses’ determination to stand beside employees amidst challenging economic conditions, he added.

Relevant authorities will draft a decree for implementing the consensus agreement reached at the meeting, officials said.

After Vietnam’s most recent minimum wage hike in July 2022, monthly wages in the four regions (1-4) range between VND3.25 million ($137) and VND4.68 million ($197), equivalent to between VND15,600 ($0.66) and VND22,500 ($0.95) per hour.

The average monthly income of a contracted worker in Vietnam was VND7 million ($288) in January-September, up VND451,000 ($18.6) or 6.8% year-on-year, according to the General Statistics Office (GSO). It was VND8.6 million ($353.8) in urban areas and VND6.1 million ($251) in rural areas.

These figures are already above the minimum regional wage decreed in July 2022.