Decree regulating regional minimum wages for employees working under labor contracts

Illustration

On June 30, 2024, the Government issued Decree No. 74/2024/ND-CP stipulating the minimum wage for employees working under labor contracts, replacing Decree No. 38/2022/ND-CP dated June 12, 2022 and taking effect from July 1, 2024.

According to Decree 74/2024/ND-CP, the minimum wage by region from July 1, 2024 will increase by an average of VND 200,000 to VND 280,000 compared to the current minimum wage in Decree 38/2022/ND-CP. Specifically:

The monthly minimum wage in 4 regions is regulated as follows: Region I: increase by 280,000 VND, from 4,680,000 VND/month to 4,960,000 VND/month; Region II: increase by 250,000 VND, from 4,160,000 VND/month to 4,410,000 VND/month; Region III: increase by 220,000 VND, from 3,640,000 VND/month to 3,860 VND/month; Region IV: increase by 200,000 VND, from 3,250,000 VND/month to 3,450,000 VND/month.

The minimum hourly wage in region I increased from VND 22,500/hour to VND 23,800/hour, region II from VND 20,000/hour to VND 21,200/hour, region III from VND 17,500/hour to VND 18,600/hour, and region IV from VND 15,600/hour to VND 16,600/hour.

The application of the regional area is determined according to the employer's place of operation 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 areas with different minimum wages, the unit or branch operating in the area shall apply the minimum wage prescribed for that area.

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

Employers operating in areas with a change of name or administrative division shall temporarily apply the minimum wage prescribed for the area before the change of name or administrative division 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.

Employers operating in a provincial city newly established from one or more localities in region IV shall apply the minimum wage prescribed for the remaining provincial cities in Clause 3 of the Appendix to this Decree.

Apply minimum wage

Decree No. 74/2024/ND-CP stipulates that the monthly minimum wage is the lowest wage level used as a basis for negotiating and paying wages to employees applying the monthly salary payment method, ensuring that the wage level according to the job or position of employees working enough normal working hours in the month and completing the agreed labor norms or work must not be lower than the monthly minimum wage.

The minimum hourly wage is the lowest wage used as a basis for negotiation and payment of wages 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 or daily or by product or by piecework, the salary of these forms of payment, if converted to monthly or hourly, must not be lower than the minimum monthly salary or minimum hourly salary. The salary converted to monthly or hourly based on normal working hours is chosen by the employer according to the provisions of the labor law 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 day; or product salary or contract salary divided by normal working hours to produce products or perform contract tasks.

Decree No. 74/2024/ND-CP clearly states: When implementing the minimum wage prescribed in this Decree, employers are responsible for reviewing the wage payment regimes in the labor contract agreed with employees, collective labor agreements and regulations and rules of the employer to adjust and supplement accordingly. For agreed and committed salary contents that are more beneficial to employees (such as salary regime for employees doing jobs or positions requiring vocational training and education is at least 7% higher than the minimum wage and salary regime for employees doing jobs or positions with arduous, toxic, or dangerous working conditions is at least 5% higher; jobs or positions with especially arduous, toxic, or dangerous working conditions are at least 7% higher than the salary of jobs or positions with equivalent complexity, working under normal working conditions), they shall continue to be implemented, unless the parties have other agreements.

Employers are not allowed to eliminate or reduce wage regimes when employees work overtime, work at night, compensation in kind and other regimes as prescribed by labor laws.

Source: https://dangcongsan.vn/thoi-su/nghi-dinh-quy-dinh-muc-luong-toi-thieu-vung-doi-voi-nguoi-lao-dong-lam-viec-theo-hop-dong-lao-dong-671452.html