Covid-19 has ravaged Vietnam for over 2 years. Due to the impacts of the pandemic, the Government of Vietnam has had to postpone the yearly increase of the regional minimum wage for employees for the last 2 years. Accordingly, as the Covid-19 pandemic has slowly been controlled by the people’s effort and the Government’s policies, it’s time to refocus on the policies involving the salary of the people. Recently, the Vietnam General Confederation of Labor has stated a proposal to increase the regional minimum wage by 7-8% in 2022.
At the second session of the National Wage Council took place on the morning of April 12th, 2022, the representative of the leadership of the Vietnam General Confederation of Labor proposed to increase the regional minimum wage from July 1, 2022, by 7 to 8%.
The National Wage Council was established to renew the wage policy in line with the market economy, in line with Vietnam’s international integration process.
The second session was hosted by the chairmanship of Mr. Le Van Thanh – Deputy Minister of Labor, War Invalids and Social Affairs, Chairman of the National Wage Council, to continue discussing and negotiating the increase of regional minimum wages for employees at the enterprises.
Mr. Ngo Duy Hieu – Vice President of the Vietnam General Confederation of Labor said during an interview before the session took place that the representative of employees set a negotiating goal and expected the regional minimum wage to be increased at a rate of 7-8% from July 1, 2022.
Due to the impact of the Covid-19 epidemic, the Government has not adjusted the regional minimum wage for the past 2 years.
Consequently, with no further guidance, the businesses continue to maintain the minimum wage according to Decree 90/2019/ND-CP.
Specifically, the current standards in the regional minimum wage are:
- Region I of 4.42 million VND;
- Region II 3.92 million VND;
- Region III 3.42 million VND;
- Region IV 3.07 million VND.
Necessary changes to the regional minimum wage regime to support the employees
Although the increase in the regional minimum wage will mean bad effects on the businesses, however, the change must be done.
Because while the business may be affected adequately by the Covid-19 pandemic, it is the employees and the normal citizens that suffered the most.
Stating about this matter, Mr. Ngo Duy Hieu has stated: “I share with many businesses’ difficulties, but we can’t help but pay attention to a part of employees who are in great difficulty. The endurance of employees has also reached the threshold to (force us) to consider adjusting the regional minimum wage in the context of the consumer price index continuously increases and the life of employees facing many difficulties.”
He adds: “We have to look at the image of employees queuing up from early morning to wait for the lump-sum social insurance withdrawal, which is worth thinking about.”
The change is due for a long time.
Besides the support against the Covid-19 pandemic, another reason for the question of why the increase is necessary is that currently, Vietnam is transitioning to a stage of recovery and development. Especially in the first quarter of the past year, the Vietnamese economy has recovered very strongly but at the same time, employees are still facing great difficulties. This bizarre situation is not suitable for the overall development of the nation and its people.
Regarding this matter, Mr. Ngo Duy Hieu stated: “This increasing of wages, both to support employees to overcome difficulties, and at the same time is a driving force to increase labor productivity, help businesses recover quickly and thrive.”
According to the representative of the Vietnam General Confederation of Labor, employees need to receive support and share the difficulties after a period of exhaustion due to the epidemic and price storms. The increase in wages benefits both businesses and employees. Along with the effective fight against the epidemic and the ability of the economy to recover in 2022, the Vietnam General Confederation of Labor believes that an increase in the regional minimum wage from July 1, 2022, is possible.
“If it fails to meet expectations, it is likely that the National Wage Council will have to hold more meetings to negotiate,” a representative of the Vietnam General Confederation of Labor said.
Summarizing today’s meeting, according to the agreement of the National Wage Council, from July 1, 2022, the regional minimum wage is expected to increase by 6%, or 180,000-260,000 VND more according to the current regional minimum wage.