The minimum wage will be officially increased from January 1, 2017 by an extra VND180,000-250,000 ($8.07-11.21), depending on the region.
The government has issued Decree No.153/2016/ND-CP, dated November 14, amending regional minimum wages for workers employed under a labour contract. Accordingly, the increase stands at an average of 7.3 per cent.
Before the proposal to increase the minimum wage by an average 7.3 per cent to be submitted to the government for approval, Vietnamese authorities had undergone a prelude of heated debate to reach a compromise for the proposal.
Notably, according to Pham Minh Huan, Deputy Minister of Labour, Invalids and Social Affairs, the proposal is based on the country’s current socio-economic conditions. However, the Vietnam General Confederation of Labour (VGCL) proposed an 11 per cent increase, while the Vietnam Chamber of Commerce and Industry (VCCI) would have been happy with a mere 5 per cent.
Mai Duc Chinh, deputy chairman of VGCL, said that the council was not satisfied with the results because labourers’ living standards in the garment and textile sector are still alarmingly low.
Meanwhile, Hoang Quang Phong, deputy chairman of VCCI, argued that the 7.3 per cent increase would challenge enterprises, especially small and medium sized ones.
In November 2015, the government decided to raise the minimum wage by 12.4 per cent, effective on January 1, 2016, raising concerns at a number of foreign-invested firms over the competitiveness of Vietnamese labour costs.