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FAQs on Minimum Wages in Vietnam

by Gunjan Pandya — last modified Feb 14, 2012 02:10 PM

 

Is there a separate minimum wage legislation in your Vietnam? There is no separate legislation on minimum wages in Vietnam rather there is a general Labour Code, 1994 (amended 2002) which also regulates minimum wage law
Do one or more minimum wage/s, exists in your Vietnam? Yes there exists more than one minimum wages in Vietnam. Article 56 (Chapter VI - Wages) of Labour Code. (Para 2) [……..,Government should determine a general minimum wage rate, minimum wage for each region and minimum wage for each industry]
At what level are minimum wages determined? minimum wages are determined at Regional and Sectoral level. Article 56 of the Labour Code, 1994 (amended 2002) says that the government shall determine a general minimum wage rate, a minimum wage for each region and minimum wage for each industry. But as far as a general minimum wage rate (national level minimum wage rate) is concerned, Vietnam does not have one. However, a common minimum wage level is prescribed legally (refer to Decree No 22/2011) which applies to state employees, personnel in armed forces, political organizations etc. who do not fall under the scope of Labour Code 1994. minimum wage rate is used as a basis for calculation of wages for other types of jobs. Vietnam has different minimum wages for different types of enterprises - domestic and foreign owned. Vietnam also has a common minimum wage level which applies to state employees, armed personnels, public organizations etc.. Which however are not regulated by the Labour Code. But the minimum wage rate is prescribed legally by Ministry of Labour, War Invalids & Social Affairs, ministry of Home Affairs and Ministry of Finance (refer to Decree No 28/2010)
On what basis is/are minimum wage/s declared? minimum wages are declared on monthly basis. As per the latest Decree no 70/2011 minimum wage rates as declared on monthly basis. Labour Code is silent on this. Employers, however, have the right to pay wages - weekly, piece rate but it should be in agreement with the employees
In case of daily/weekly/monthly minimum wage, are number of working hours considered while fixing minimum wage? No number of working hours are not considered while fixing minimum wages. Labour Code 1994 (amended 2002) however, does fix the number of working hours not to exceed 8 hours per day or 48 hours per week, as per article 68.
Who all are involved in setting minimum wage? Ministry of Labour, War Invalids and Social Affairs, Representatives of Employers, Vietnam General Confederation of Labour are involved in setting minimum wages in Vietnam. According to article 56 of the Labour Code 1994 (amended 2002), the government should determine minimum wages in consultation with Vietnam General Confederation of Labour and representatives of employers
How are upratings (adjustments) of minimum wage/S decided upon? Upratings of minimum wages are decided jointly by government, employer and trade union representatives. Article 56, (Chapter VI - Wages) of Labour Code. (Para. 2) and Decree No.70/2011 article 4, clause 2.
Which are the components of minimum wage in your country? Vietnam has only fixed component of minimum wage. Decree 22/2011, Decree 70/2011 all declare single component minimum wage rate (in case of both common minimum wage rate and regional minimum wage rate)
How frequently is the fixed component of minimum wage updated? There is no specific interval fixed for updating minimum wages. The labour Code does not specify any fixed interval for revision of minimum wages but Article 56, (Chapter VI - Wages) of Labour Code. (Para. 3) says "..when price index increases ……, the government shall adjust minimum wages to ensure real wages"
What are the yardsticks on which minimum wage revisions are based? minimum wage revision is based on Consumer price indexation & (decent) living standards. Article 56, (Chapter VI - Wages) of Labour Code. (Para. 1) [minimum wage is set on the basis of cost of living of an employee ….. And includes remuneration for the work performed and additional amount for contribution towards savings
What is the national poverty line? (In national currency) VND 500,000 in urban areas and VND 400,000 in rural areas per person per month.
How often is poverty line updated? Poverty line is updated at irregular intervals.
When was poverty line last updated? (Specify YYYY/MM) Poverty line was last updated on 30-1-2011 (Decree No 09/2011 QĐ-TTG)
What is the percentage of minimum wage relative to the current poverty line? For Vietnamese enterprises and Vietnam-based foreign-invested enterprises minimum wage rate ranges from 1,400,000 – 2,000,000. Average poverty line VND 450,000 = (500000+400000)/2 Therefore the % of minimum wage relative to poverty line ranges from 341 - 444%. 
Who all regulate minimum wage compliance? minimum wage compliance is regulated by labour inspector or similar body (Chapter XVI, article 185 of Labour Code- [state inspectors shall have the function of inspection of labour policies]) & Trade Unions (Vietnam General Confederation of Labour and other trade unions (article 181 clause 3) of Labour Code)
Which legal sanctions can be applied if compliance is lacking? In case of non Compliance Fines (Decree No. 047/2010, dated 6th may 2010, article 10, clause 4 AND article 192 of the Labour Code), imprisonment (Article 192 of Labour Code, 1994 (amended 2002)), payment of arrears (Article 192 of Labour Code, 1994 (amended 2002).
Are sanctions often being applied? Sanctions are rarely applied. Vietnamese has a little accuqantance with law, So they do not want to solved by law.
Are employer and/or trade union representatives involved in compliance procedures? Yes employer and/or trade union representatives are involved in compliance procedures. as per article 181 (clause 3 & $) of Labour Code 1994 amended 2002) Vietnam General Confederation of Labour and trade unions at all levels should participate in the supervision of administration of labour laws and employers representatives should participate (only) with their views
To whom/where can individuals complain, if they think they are earning less than minimum wage. Incase of non compliance, individuals can complain to employer/management/contractor (Article 9 of Labour Code [The state encourages the resolution of labour dispute by way of conciliation and arbitration); labour inspector (article 186, clause 4, Labour Code - one of the duty of state labour inspector is to resolve complaints or claims of labour in accordance with the provisions of the law); Trade unions (Article 156 Labour Code: The Vietnam General Confederation of Labour and trade unions at all levels shall participate with State bodies and representatives of employers in discussing and resolving issues relating to labour relations);Others (Article 162, Labour Code - Labour Conciliatory Council of the enterprise/Labour Conciliator of the body in charge of state administration of labour of the district, town or provincial city OR People's Court OR Provincial Labour Arbitration Council [article 168] (in case of collective dispute)

 

 

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