Minimum wage may not be adjusted on January 1, 2024

Speaking to the press on the afternoon of October 17, Mr. Tong Van Lai, Deputy Director of the Department of Labor Relations and Wages, said that the Ministry of Labor, War Invalids and Social Affairs has reported to the Government to postpone the submission of the plan to increase the minimum wage until the end of this year. It is expected that by the end of November, the National Wage Council will discuss the timing and level of the increase.

"In the fourth quarter, the Council will meet to discuss the plan and then make recommendations to the Government, so it will definitely not be able to adjust the minimum wage in early 2024," said Mr. Lai, recalling that over the past 10 years, the minimum wage has usually been adjusted on January 1, and in 2022, on July 1.

Traditionally, each council meeting takes place in 2-3 sessions. The plan and timing of salary increase are usually finalized in the third session, and fastest in the second session when all parties find common ground.

At its first meeting in early August, the National Wage Council agreed to postpone negotiations on a minimum wage increase until the end of this year to discuss the timing and extent of the increase. The reason was the economic downturn that caused more than half a million workers to lose their jobs, reduce working hours, and the CPI in the first six months of the year increased by 3.29% compared to the same period last year, with inflation increasing by 4.74%.

The Vietnam General Confederation of Labor proposed an increase of about 6%, meaning the lowest corresponding salary would be 195,000 VND for region IV and 280,000 VND for region I. However, the Vietnam Confederation of Commerce and Industry (VCCI) said that finding orders and keeping jobs for workers is more urgent than increasing wages.

The survey on working life in the first half of 2023 showed that the average income of workers reached 7.88 million VND, while their family's monthly spending was 11.7 million VND. Income only met about 70% of the spending of the surveyed people. Workers' spending also increased by 19% compared to 2022, mainly due to high prices and electricity and water bills.

The regional minimum wage is the lowest level that serves as a basis for businesses to negotiate and pay wages to employees. This level applies to employees working under the contract regime of the Labor Code; working in enterprises; cooperatives, farms, households, individuals and other organizations in Vietnam that hire employees under contracts; foreign agencies, organizations, international organizations and foreign individuals in Vietnam that hire employees.

From July 1, 2022, the monthly minimum wage will increase by 6%, equivalent to VND 180,000-260,000 compared to before. Specifically, the minimum wage in region I is VND 4.68 million; region II is VND 4.16 million, region III is VND 3.64 million and region IV is VND 3.25 million.