6.5-percent rise proposed for regional minimum wage in 2018

VietNamNet Bridge – Pham Minh Huan, former Chairman of the National Wage Council, speaks to the newspaper Nong thon Ngay nay (Countryside Today) about salary increase proposals for 2018. Why have the annual wage increase meetings been so tense? The reasons are very easy to understand as all parties, particularly the Viet Nam Chamber of Commerce and Industry (VCCI) and the Viet Nam General Confederation of Labour (VGCL), all want to protect the rights and interests of those they represent. For example, the VGCL wants to protect employers’ rights while the VGCL wants to protect employee benefits. In recent years the National Wage Council (NWC) has organised meetings between the two parties to negotiate and reach a consensus on the minimum wage increase for each region. Whatever arguments the two parties present must be calculated carefully, based on scientific criteria and on the actual context of Viet Nam’s socio-economic conditions. So what are the specific criteria for calculating the minimum wage increase for each region? In my opinion, the calculation of the minimum wage should be based on minimum living requirements, the consumer price index (CPI), the employment situation and average wage in each region. However, currently wages cover over 90 per cent of the workers’ minimum living needs. That’s why, in my opinion, we should cut down the minimum wage increase. Many of our economic sectors have lost their balance, particularly the textile and shoe and leather sectors. Employers of these sectors have tried not to dismiss workers despite…... [read more]

Pham Minh Huan, former Chairman of the National Wage Council, speaks to the newspaper Nong thon Ngay nay (Countryside Today) about salary increase proposals for 2018. Illustration photo, source: zing Why have the annual wage increase meetings been so tense? The reasons are very easy to understand as all parties, particularly the Viet Nam Chamber of Commerce and Industry (VCCI) and the Viet Nam General Confederation of Labour (VGCL), all want to protect the rights and interests of those they represent. For example, the VGCL wants to protect employers’ rights while the VGCL wants to protect employee benefits. In recent years the National Wage Council (NWC) has organised meetings between the two parties to negotiate and reach a consensus on the minimum wage increase for each region. Whatever arguments the two parties present must be calculated carefully, based on scientific criteria and on the actual context of Viet Nam’s socio-economic conditions. So what are the specific criteria for calculating the minimum wage increase for each region? In my opinion, the calculation of the minimum wage should be based on minimum living requirements, the consumer price index (CPI), the employment situation and average wage in each region. However, currently wages cover over 90 per cent of the workers’ minimum living needs. That’s why, in my opinion, we should cut down the minimum wage increase. Many of our economic sectors have lost…... [read more]

Tough talks over pay raiseThuy Dung HANOI – While employers seek to cap the minimum wage increase for next year at less than 5%, employees are pushing for an 8-10% pay raise, and the wide difference requires another round of negotiations on August 7. The current salary level, according to experts, meets around 90% of the minimum living demand for laborers, said Hoang Quang Phong, vice president of the Vietnam Chamber of Commerce and Industry (VCCI) at a meeting of the National Wage Council last Friday. Pay rise to erode competitiveness Meanwhile, local companies want to achieve sustainable growth because any sharp rise in the minimum wage will force them to restructure production, resulting in staff layoffs and creating other social problems, said Phong of VCCI, which represents employers. Phong said the business performance of local enterprises has slightly improved. However, those active in textile-garment, leather-footwear, seafood, and electronics sectors will face adverse effects upon any strong hike in the minimum wage. A report shows there are around 54.4 million employees nationwide, but those having signed labor agreements with enterprises and cooperatives account for a mere 17%. As such, if the minimum wage is adjusted up strongly, other social factors will follow suit – lives of laborers subject to the adjustment and those working in the informal sector will be impacted. Nguyen Duc Thuan, chairman of the Vietnam Leather, Footwear and Handbag Association, said enterprises always regard their employees as a cornerstone to fuel their growth. However, Thuan said, if…... [read more]

Average minimum salary proposed to rise over 15% next year Minh Duc By Minh Duc - The Saigon Times Daily The minimum wage for Zone 1 would rise to VND3.1 million per month if the National Wage Council’s proposal is approved by the Government - Photo: Uyen Vien HANOI – The National Wage Council has agreed on a proposal by representatives of different agencies to increase the 2015 minimum salary by region by an average of 15.1% and the minimum wage for Zone 1 would rise to VND3.1 million if the proposal is approved by the Government. According to the National Wage Council’s proposal, employees in Zone 1 would see their minimum salary up VND400,000 to VND3.1 million per month while the respective amounts in zones 2, 3 and 4 would be VND2.75 million (up VND350,000), VND2.42 million (up VND320,000) and VND2.2 million (up VND300,000). At the council’s meeting in Hanoi on August 6, the Vietnam General Confederation of Labor proposed a minimum wage increase of 18.5%. The increase suggested by the council is not at all strange as the regional minimum wage picks up around 15% annually in the past time. Tong Thi Minh, director of the Department of Labor and Wage under the Ministry of Labor, War Invalids and Social Affairs, told the Daily that the proposed hike was seen as acceptable for the employer and the employee. The establishment of the National Wage Council is aimed to propose wage increases based on economic situations, inflation and people’s…... [read more]

In his address at the launch on August 6, Deputy Prime Minister Vu Van Ninh asked the council’s staff to closely work with relevant ministries, branches and agencies to successfully fulfill the assigned tasks. The council’s main function is to advise the government on the regional minimum wage on an annual and periodic on the basis of scientific grounds and available data. The council’s members include representatives from the Ministry of Labour, War Invalids and Social Affairs (MoLISA), the Vietnam General Confederation of Labour (VGCL), and the Vietnam Association of Small and Medium Enterprises. On the same day, the council’s first session was held to decide on its working regulations and tasks.... [read more]

At a review meeting in Hanoi on January 3, MoLISA officials noted 88,000 workers were sent abroad—103.7% of the set target and 10% more than a year earlier. MoLISA Office Deputy Head Luu Hong Son said cities and provinces in four key economic regions recorded considerable employment success. The labour market is developing and can now meet employer demands in Bac Ninh, Hai Duong, Long An, and Ho Chi Minh City, Son said. The MoLISA’s list of 2013’s highlights included: 1. A Party decree regulates occupational safety and health (OSH) The Party Central Committee Secretariat’s September 18 decree urges Party committees, Party and Government organisations, the Fatherland Front, and citizens to educate themselves and their colleagues on the importance of OSH more broadly. 2. The National Assembly approves Law on Employment The National Assembly passed the Law on Employment on November 16. Its seven chapters and 62 articles will enter into effect on January 1, 2015. 3. The National Wage Council debuts The National Wage Council was established under the revised Labour Code. It will directly consult with the Government on issues related to wage adjustment. 4. Vietnam and the RoK sign MoU on employment cooperation Vietnam and the Republic of Korea signed a memorandum of understanding, under which the latter will resume receiving Vietnamese workers over a year. The signing demonstrates both sides’ attempts to combat illegal Vietnamese labour in the RoK. 5. Additional preferences for social policy beneficiaries The revised ordinance on contributors to the revolution finished its…... [read more]

Getting Ready for Next Level of Competitiveness for Vietnam’s Manufacturing Industry “Vietnam is trying to reform to become the number one destination for investors in Southeast Asia and the world,” said Minister of Planning and Investment, Mr. Nguyen Chi Dung,at the ASEAN Business Summit 2016. As a percentage of GDP at 6.3%, Vietnam has been attracting more than five times the Foreign Direct Investment seen in China or India over the last 5 years. Expect huge investment in the next decade in next-generation manufacturing across a wide range of industries. Wall Street Daily has some summary comments about the possibility of attracting the investment in Vietnam, in which the labor cost is considered for a decisive competitive advantage, following by the tremendous opportunities for market reforms to unlock blocked potential to drive its industry forward. Vietnam’s National Wage Council has decided upon a modest 7.3 percent average increase in monthly minimum wages across the country for 2017. This decision is considered as a compromise between the employers’ proposed increase of 5 percent and that of workers which pushed for an 11 percent increase. The decision also seems to be in response to competition from fellow manufacturing powerhouses in the region and hence primarily an effort to maintain its attractiveness to foreign investors and businesses (according to Vietnam Briefing). According to World Bank economist Sebastian Eckardt: “Vietnam may lose its competitive edge in the manufacturing sector as well. One of the challenges is raising wages, while productivity still lags behind. Vietnam…... [read more]

Viet Nam News HÀ NỘI - The government has approved an increase of 7.3 per cent against the regional minimum wage, starting January 1, 2017. According to a decree signed by Prime Minister Nguyễn Xuân Phúc earlier this week, the minimum wage for labourers in Region I will be increased to VNĐ3,750,000 (US$167) per month from the current VNĐ3,500,000, the highest increase for labourers compared to those in other regions. Region I includes large districts and towns in Hà Nội, Hải Phòng, HCM City and Đồng Nai, as well as Bình Dương and Bà Rịa-Vũng Tàu. Labourers from Regions II, III and IV will have a minimum wage of VNĐ3,320,000, VNĐ2,900,000 and VNĐ2,580,000 per month, respectively. This plan was submitted by the National Wage Council after a months-long fierce debate between representatives of employees and employers, who suggested very different figures. In a noteworthy move, the decree also regulates that enterprises are not allowed to strike out or cut wages for labourers who work overtime, work at night or work in onerous or hazardous working conditions. Other allowances, bonuses and benefits offered by enterprises should be paid in accordance with labour contracts, collective labour agreements or regulations of the enterprises. According to the Labour Code, the regional minimum wage is the lowest permitted rate that employers can pay an employee doing the simplest job under normal working conditions. The minimum wage must ensure a labourer and his/her family have a livelihood that meets their minimum needs. - VNS... [read more]

Govt approves 7.3% wage rise Truc Diem HANOI – The Government has issued a decree approving region-based minimum wages for 2017 which will rise about 7.3% versus 2016 to between VND2.58 million and VND3.75 million per month. Prime Minister Nguyen Xuan Phuc signed Decree 153/2016/ND-CP on November 14. The minimum monthly wage for region one will edge up to VND3.75 million, region two to VND3.32 million, region three to VND2.9 million and region four to VND2.58 million. The new monthly salaries will be VND180,000-250,000 higher than the current levels. The National Wage Council submitted this wage hike plan to the Government after months of discussion and deliberation. The council said a 7.3% wage increase next year could help meet 90% of basic needs of workers. At a recent conference on amendments to the 2012 Labor Code, many experts said they had a vague idea of how workers’ basic needs are defined. According to Article 91 of the labor code, the minimum wage for the simplest job must be enough to cover the basic needs of workers and their families. Ho Trung Dung, deputy general director of WMC, asked how to calculate one’s basic needs. There are numerous viewpoints on basic needs, said Dung, who is an independent expert in salary. According to the legal department at the Ministry of Labor, Invalids and Social Affairs, the amended Labor Code will make clear the definition of the minimum wage. The ministry proposed issuing the law on minimum wages.... [read more]

The National Assembly (NA) has agreed an increase 7 per cent for annual base salary, pensions, and preferential subsidies for people with meritorious service given to Vietnam’s revolution. The base salary is currently stipulated in Decree No. 99/2015/QH13 and stands at VND1.21 million ($54). The minimum regional salary is VND3.5 million ($156) in Region I, VND3.1 million ($139) in Region II, VND2.7 million ($121) in Region III, and VND2.4 million ($107) in Region IV, under Decree No. 122/2015. Comparing the base salary, which is used to calculate the salaries of State officials, and the regional minimum salary for non-State employers, Mr. Bui Sy Loi, NA delegate for Thanh Hoa province, expressed concern over whether the base salary can meet the minimum living standards of State officials. Though the increase to the base salary is only modest, Mr. Loi also estimated that an increase of 7 to 8 per cent would cost the State budget an additional VND6.6 trillion ($295.5 million). Any increase, he went on, would only be a temporary solution and not represent real reform to the salary mechanism. He suggested that retirees and people that gave meritorious services to the revolution be excluded from any increases. He expects the government to research salary reform because increases motivate workers to enhance productivity. State officials in the education sector total about 1.3 million, in healthcare about 300,000, and in other sectors from 1.6 to 1.7 million, Mr. Mai Duc Chinh, Deputy Chairman of the Vietnam General Confederation of Labor (VGCL),…... [read more]




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