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By Lien Hoang
Aug. 8—The National Wage Council proposed increasing minimum wages 7.3 percent on average in 2017, according to an Aug. 2 post on Vietnam's Ministry of Labor, Invalids, and Social Affairs website. That compares with hikes of 12 percent in 2016 and 14 percent in 2015, data from Baker & McKenzie shows.
The Vietnam Chamber of Commerce and Industry supports the 7.3 percent raise, which would result in monthly minimum earnings of 2.58 to 3.75 million dong ($116 to $168), depending on the region. The current minimum wages range from 2.4 to 3.5 million dong ($108 to $157).
The Vietnam General Confederation of Labor, which wanted a 2017 increase of 11 percent, said that the 2016 wage represents just 85 percent of the amount needed for minimum living standards. A survey by Vietnam’s sole labor union found more than half of workers barely make enough to survive, state news agency Vietnam News reported.
The onus should be on employers to meet corporate social responsibility by paying a livable income, as outlined in the Labor Code, said Angie Ngoc Tran, a professor at California State University, Monterey Bay.
“The minimum salary should not be misunderstood for a good salary or a reasonable salary,” said Nguyen Thi Quynh Nhu, a senior associated lawyer at Grünkorn & Partner in Ho Chi Minh City. “Obviously many employers will have to pay considerably more than what are the minimum wages.”
A low wage “hurts workers in the long run because social insurance benefits are tied to the minimum wage, not the actual, higher gross salary, which includes overtime,” Tran said. She said the “downward spiral” of wage growth can be attributed to an “increasingly stronger alliance” between the wage council, a government advisory board, and the Vietnam Chamber of Commerce and Industry.
The wage council will submit its proposal to the prime minister for approval. The ministry said all parties have agreed to the 2017 rate.
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The Ministry of Labor, Invalids, and Social Affairs post on the wage increase is available in Vietnamese at http://www.molisa.gov.vn/vi/Pages/chitiettin.aspx?IDNews=24976.
The Vietnam General Confederation of Labor’s statement on living standards is available in Vietnamese at http://www.congdoanvn.org.vn/details.asp?l=1&c=259&m=10528.
The Vietnam News report on the labor union’s survey is available at http://vietnamnews.vn/society/300664/viet-nam-workers-cant-make-ends-meet-survey.html#cmuVZEjQB0PdAbCr.97.
The 2012 Labor Code is available at http://www.molisa.gov.vn/en/Pages/Detail-document.aspx?vID=538.
More information on payroll issues in Vietnam can be found in the Vietnam country primer.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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