Responding to the expectations of employees during the past two years, on 12th June, 2022 the Vietnamese Government issued Decree 38/2022/ND-CP with many notable changes related to the Minimum Monthly Wages in the coming time.
1. The Minimum Monthly Wage increase by an average of 6% from 1st July 2022
It is essential to distinguish “Minimum Monthly Wage” from “Minimum Basic Wage”, terms that are often confused. Minimum Basic Wage is used by Government organisations as a the foundation for payroll calculations, allowances and other salary matters, and is also used as a threshold upon which the maximum payment for Social Insurance and Health Insurance are calculated.
In contrast, the Minimum Monthly Wage forms the basis for salary calculations and negotiations between commercial employers & employees, which is evidenced in labour contracts. It is also used as a threshold upon which the maximum payment for Unemployment Insurance (UI) is calculated. Minimum Monthly Wages are applied at different rates using “zones” that are to align for areas with different economic and living standards.
Effective from 1 July 2022, Decree 38/2022/ND-CP has adjusted the Minimum Monthly Wages by 6% compared to the provisions of Decree 90/2019/ND-CP. As follows:
| ZONE | Regional Minimum Wage in Decree 90/2019/ND-CP
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