Proposal to increase regional minimum wage by 7.2% from January 1, 2026

The Ministry of Home Affairs is drafting a Government Decree regulating the minimum wage for employees working under labor contracts.

The Ministry of Home Affairs is drafting a Government Decree regulating the minimum wage for employees working under labor contracts.

Proposed increase in regional minimum wage from 250,000 VND - 350,000 VND/month

The draft stipulates that the subjects of application are: Employees working under labor contracts as prescribed by the Labor Code; employers as prescribed by the Labor Code (including: enterprises as prescribed by the Law on Enterprises; agencies, organizations, cooperatives, households, individuals who hire and use employees to work for them according to agreements); other agencies, organizations, and individuals related to the implementation of the minimum wage prescribed in this Decree.

The draft proposes to adjust the monthly minimum wage and the hourly minimum wage applicable to employees working under labor contracts to increase by 7.2% compared to the current level (coinciding with the plan that the National Wage Council unanimously recommended to the Government ). Specifically:

Regulations on monthly minimum wages according to 4 regions : region I is 5,310,000 VND/month, region II is 4,730,000 VND/month, region III is 4,140,000 VND/month, region IV is 3,700,000 VND/month.

The Ministry of Home Affairs said that the above minimum wage increased from 250,000 VND - 350,000 VND (equivalent to an average rate of 7.2%) compared to the current minimum wage. The above minimum wage adjustment is about 0.6% higher than the minimum living standard of workers until the end of 2026 to improve the workers. This adjustment shares and harmonizes the interests of workers and businesses, paying attention to improving the lives of workers and ensuring the maintenance and development of production and business of enterprises.

Regulations on minimum hourly wages according to 4 regions: region I is 25,500 VND/hour, region II is 22,700 VND/hour, region III is 20,000 VND/hour, region IV is 17,800 VND/hour.

According to the Ministry of Home Affairs, the minimum hourly wage continues to be determined based on the equivalent conversion method from the minimum monthly wage and standard working time as prescribed by the Labor Code. This is the method that ILO experts have recommended Vietnam to choose and has been used when calculating the minimum hourly wage from 2022 to present.

Minimum wage adjustment from January 1, 2026

Regarding the timing of adjusting the minimum wage, the draft proposes to implement it from January 1, 2026 to ensure time for businesses to prepare plans and resources for implementation.

Most countries also choose the time to adjust the minimum wage to coincide with the start of the fiscal year to facilitate business planning.

In Vietnam, from 2000 to now, the Government has adjusted the minimum wage 20 times in general, of which 15/18 times were adjusted on January 1. Other adjustments on January 1 every year are associated with unusual fluctuations (the current minimum wage is applied from July 1, 2024, this adjustment time is set in the economic and social context after going through the most difficult time of the COVID-19 pandemic and starting to move to a state of good recovery and many positive aspects).

Regulations on the list of localities applying the minimum wage according to the new commune-level administrative units

The current minimum wage in Decree No. 74/2024/ND-CP is established by region and linked to district-level administrative boundaries, which is no longer suitable for the actual situation in localities after the two-level government arrangement from July 1, 2025. Therefore, the draft proposes a new List of localities in Region I, Region II, Region III, Region IV on the basis of inheriting the current list prescribed in Decree No. 128/2025/ND-CP and has been reviewed and updated at the request of the Provincial People's Committee.

The Draft Decree stipulates the application of regional areas determined according to the place of operation of the employer as follows:

- Employers operating in a region shall apply the minimum wage prescribed for that region.

- If an employer has units or branches operating in locations with different minimum wages, the minimum wage prescribed for the location in which the unit or branch operates shall apply.

- Employers operating in industrial parks and export processing zones located in areas with different minimum wages shall apply the locality with the highest minimum wage.

- Employers operating in an area with a name change or separation shall temporarily apply the minimum wage prescribed for the area before the name change or separation until the Government has new regulations.

- Employers operating in a newly established area from one or more areas with different minimum wages shall apply the minimum wage according to the area with the highest minimum wage.

Regarding the application of minimum wages, the draft Decree stipulates:

The minimum monthly wage is the lowest wage used as a basis for negotiation and payment of wages to employees applying the monthly salary payment method, ensuring that the wage according to the job or position of the employee who works enough normal working hours in the month and completes the agreed labor or work norms must not be lower than the minimum monthly wage.

The minimum hourly wage is the lowest wage used as a basis for negotiation and payment to employees applying the hourly wage payment method, ensuring that the wage according to the job or position of the employee working in one hour and completing the agreed labor norm or work must not be lower than the minimum hourly wage.

For employees who are paid weekly, daily, piecework or piecework, the salary of these forms of payment, if converted monthly or hourly, must not be lower than the minimum monthly wage or minimum hourly wage. The salary converted monthly or hourly based on normal working hours chosen by the employer according to the provisions of the labor law is as follows:

- The converted monthly salary is equal to the weekly salary multiplied by 52 weeks divided by 12 months; or the daily salary multiplied by the number of normal working days in a month; or the product-based salary, piecework salary performed during normal working hours in a month.

- Hourly salary is converted by weekly or daily salary divided by normal working hours per week or per day; or product salary or contract salary divided by normal working hours to produce products or perform contracted tasks.

The draft Decree clearly states that employers are responsible for reviewing agreements in labor contracts, collective labor agreements and regulations of the employer to adjust and supplement accordingly; salary regimes must not be abolished or reduced when employees work overtime, work at night, compensation in kind and other regimes according to the provisions of labor law. For the agreed contents, commitments in labor contracts, collective labor agreements or other legal agreements that are more beneficial to employees (including agreements on salary regimes for employees doing jobs or positions requiring vocational training and education at least 7% higher than the minimum wage) than those stipulated in this Decree, they shall continue to be implemented, unless the parties have other agreements.

HA (according to VGP)

Source: https://baohaiphongplus.vn/de-xuat-tang-luong-toi-thieu-vung-7-2-tu-1-1-2026-416629.html