Vietnam to raise minimum wage by 5.5 percent in 2020

By Doan Loan   July 11, 2019 | 10:41 pm PT
Vietnam to raise minimum wage by 5.5 percent in 2020
Workers at a garment factory in Hanoi. Photo by Shutterstock/Jimmy Tran.
The National Wage Council has arrived at a 5.5 percent minimum wage increase next year after labor and business representatives reached a consensus.

The hike is adequate to ensure a minimum living standard for all workers, the council said Thursday.

This proposal is expected to be finalized and submitted to the government later this year.

Depending on the region, the wages will increase by VND160,000-230,000 ($7-10) a month.

The Vietnam Chamber of Commerce and Industry (VCCI), which represents employers, had suggested that the minimum wage should be hiked by 4 percent.

The Vietnam General Confederation of Labor had demanded a much higher increase last month and again put forward the proposal at the meeting. It had suggested three different options ranging from 8.18 percent to 6.52 percent.

This is the first time in the six years since the National Wage Council was established that the two sides reached a consensus after only two rounds of talks. It would usually take three to four rounds. The council has 15 members from the Ministry of Labour, Invalids and Social Affairs, the labor confederation and business representatives, acting as the mediator between the labor confederation and VCCI in the wage negotiation.

Doan Mau Diep, chairman of the council, said according to calculations made by the council’s technical department the current minimum wage is enough to cover 95 percent of workers’ basic needs.

"The 5.5 percent increase is higher than the said level of deficiency, and so both parties were agreeable."

The minimum wage is now fixed at four different levels, depending on location - VND4.18 million ($179) for region 1, VND3.71 million ($159) for region 2, VND3.25 million ($139) for region 3, and VND2.92 million ($125) for region 4. They reflect the cost of living in each area, with region 1 including largest cities like Hanoi and Ho Chi Minh City and region 4 covering rural areas.

Businesses will calculate their workers' salaries by multiplying the minimum wage rates with a coefficient determined by qualification and experiences.

Vietnam raises minimum wage every year. The increase this year was 5.3 percent

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