Minimum Wage Adjustment for 2012 to be effective from Oct 5, 2011

HCMC – Starting from October 1 to the end of December 31, 2012, a new minimum wage, varying from VND1.4 to 2 million, will be applied to employees working for companies and organizations across the country.

The recently-issued Decree 70/2011/ND-CP, Aug 22, 2011 stipulates a minimum salary applicable for staff of businesses, domestic and foreign-invested alike, in four different regions in the country, the Government said on its website (chinhphu.vn).

In particular, region one, consisting of Hanoi and HCMC, has the highest minimum salary at VND2 million a month whereas laborers will earn a minimum monthly salary of VND1.78 million in region two, including important economic areas like Binh Duong, Dong Nai and Ba Ria-Vung Tau. The figures are VND1.55 million for region three and VND1.4 million for region four.

in 2011, under Decree 107/2010/ND-CP, the respective minimum salary for foreign-invested companies in the four regions is VND1.55 mil., VND1.35 mil., VND1.17 mil. and VND1.1 million.

And Decree 108/2010/ND-CP stipulates a minimum wage for Vietnamese companies of VND1.35 million, VND1.2 million, VND1.05 million and VND830,000 in regions one, two, three and four respectively.

Therefore, the new regional minimum wage will be higher than the current one by VND300,000-650,000 per month.

The regional minimum wage is the lowest figure for businesses and laborers to refer to when negotiating salaries and used to build up wage scales, increments and other regulations abiding by the Labor Code.

The below chart shows the minimum wage levels from 2008 to 2012. Note that FDI and Vietnamese companies’ minimum wage levels were different until 2012, when they were unified under Vietnam’s WTO accession commitments.

Minimum Wage 2008 - 2012 (actual)