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New points on labor policy from the beginning of July 2022 in Vietnam

There are many upcoming changes to the regulations on employment and labor at the beginning of July 2022 that will have a direct impact on the lives of every employee in Vietnam. So, what are the new points on labor policy from the beginning of July 2022 in Vietnam?

There are 2 extremely important new points in the labor policies that will have a direct impact on the lives of every employee in Vietnam, which are the increase in minimum regional wages and the changes from the monthly minimum wages to the hourly minimum wages. 

The increase in minimum regional wages 

According to the draft on the monthly minimum wage adjustment, the minimum regional wages of every employee in Vietnam will increase by 6% (respectively increasing from VND 180,000 to VND 260,000) compared to the current level.

Specifically, region 1 is 4,680,000 VND/month, region 2 is 4,160,000 VND/month, region 3 is 3,640,000 VND/month, region 4 is 3,250,000 VND/month.

It should be noted that employees who have undergone vocational training will receive at least 7% higher than the regional minimum wage.

Therefore, the employees who have graduated from colleges, etc. in region 1 will be entitled to at least 4,680,000 X 1,07% = 5,007,600 VND/month.

The changes from the monthly minimum wages to the hourly minimum wages

In addition to the monthly regional minimum wage, a new feature coming in July 2022 is the changes from the monthly minimum wages to the hourly minimum wages.

Specifically, region 1 will have a minimum hourly salary of 22,500 VND/hour, region 2 is 20,000 VND/hour, region 3 is 17,500 VND/hour, and region 4 is 15,600 VND/hour.

Regarding the hourly regional minimum wages, there have been many voices expressing their unsatisfactory opinions about the change, stating that the change is too strict and rigid. 

They stated that we can’t just convert 100% of the monthly minimum wages to the hourly minimum wages without some adjustments, based on the nature of the jobs that needed hourly minimum wages measurement. 

However, the Vietnam Ministry of Labor – Invalids and Social Affairs doesn’t agree with the opinion, stating that the Labor Code of Vietnam does not stipulate the distinction between full-time employees (minimum monthly wages) and part-time employees (minimum hourly wages). Therefore, there is no basis for calculating an additional factor in addition to the minimum hourly wage.

In addition, the Ministry of Labour, Invalids, and Social Affairs find that according to international experience, the hourly minimum wage can be converted from the monthly minimum wage and the standard working time as prescribed by the law without the need to change, decrease or increase.

Changes from the beginning of July 2022 in Vietnam

Consequently, despite the raging disapprovements from the public, there will be little chance that there will be changes in the conversion from monthly minimum wages to hourly minimum wages. 

However, the increase in monthly minimum wages, it’s nearly 100% set, and the employees currently on or a little bit higher than the current minimum wages should expect to see their salary increase at the end of July. 

For all employees who are paying minimum social insurance in Vietnam, they will also see the benefits of this increase when they retire, receive a pension, or are paid social insurance support for sickness regime, etc. as their minimum social insurance contributions are also increased. 

ASL LAW is the top-tier Vietnam law firm for Employment and Labor Law. If you need any advice, please contact us for further information or collaboration.

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