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Minimum wage to increase 12.4%

Released at: 16:44, 03/09/2015

Minimum wage to increase 12.4%

Increase decided on by the National Wage Council on September 3 and will take effect from January 1, 2016.

by Quynh Nguyen

The National Wage Council has determined the minimum wage will be increased by 12.4 per cent in 2016.

Chairman of the National Wage Council and Deputy Minister of Labor, Invalids and Social Affairs, Mr. Pham Minh Huan, said that after discussions on many different options the Council agreed with a proposal to increase the minimum wage by 12.4 per cent from next year.

The increase was agreed to by both the Vietnam General Confederation of Labor (VGCL) and the Vietnam Chamber of Commerce and Industry (VCCI) and demonstrates the efforts of both sides to find a “common voice” in ensuring business development and the livelihoods of workers.

Discussions by the National Wage Council took place after two unsuccessful discussions on August 5 and August 25, when opinions on the extent of the minimum wage increase differed greatly between the two sides.

VCCI sought a minimum wage increase of just 10 per cent in 2016, with a representative explaining that many businesses are facing a range of difficulties. More than 70 per cent of all enterprises are unprofitable. “Salary increases would be a major burden for them,” he said. “Enterprises agree with the policy of wage increases but need a long-term roadmap.”

A representatives from VGCL, meanwhile, believed that an increase of 16.8 per cent, or VND350,000 ($15.41) to VND550,000 ($24.2), would have been entirely reasonable and would meet 89 per cent of workers’ basic needs.

The National Wage Council will now send a proposal to the government on the minimum wage increase, which is expected to come into effect on January 1, 2016.

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