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Chamber backs 10% wage increase

Update: August, 22/2015 - 09:30

A minimum wage increase would not affect enterprises, General Confederation of Labour vice-president Mai Duc Chinh tells Thoi bao Kinh te Viet Nam (Vietnam Economic Times).

The Viet Nam Chamber of Commerce and Industry (VCCI) has protected its proposal of a 10 per cent increase in the regional minimum wage in 2016, saying that up to 70 per cent of enterprises have not made enough profit to justify a higher wage hike. What do you think?

I do not know how VCCI came up with such figures. Whether enterprises are profiting or not should be decided by the tax agency. The Viet Nam General Confederation of Labour (VGCL) will only accept the figures if they are reported by the General Department of Taxation.

Besides, we have learnt that many FDI enterprises have conducted transfer pricing tricks and reported losses for years. I believe enterprises cannot survive with such reported losses.

Labourers need enterprises and enterprises also need labourers. Enterprises should see the poor and miserable situations of their employees. Last year, even when the economy faced difficulties, we were able to raise the minimum wage to VND400,000 per month. I see no reason we cannot raise the wage again this year when the economy has been better.

The VGCL is protecting our proposal of raising the minimum wage by VND350,000 - VND550,000 (US$16-$25) in an effort to protect the legitimate rights of labourers.

Enterprises always say labourers are valued, but then why should they bargain and try not to raise their wages?

I, once again, confirm that the VGCL's proposal will not affect enterprises' development.

On what basis can you confirm that?

The VGCL conducted surveys in April and May this year on minimum wages and living standards of labourers.

In Ha Noi and HCM City, each labourer is paid an average of VND4.4 million (nearly $200) to VND4.9 million ($220) a month. The regional minimum wage in 2015 for Ha Noi and HCM City is VND3.1 million ($140) per month.

We can see it this way. Enterprises normally build two salary sheets systems. One is used for paying social insurance and is normally calculated equal or slightly higher than the minimum wage rate.

Another sheet is the actual payment for labourers, which is higher than the second sheet and shows the total income of labourers with all kinds of money they receive, including salary, and extra payments for responsibilities, traveling or housing. Enterprises use this second sheet to report to tax agencies on their management expenses. Enterprises do this to avoid paying extra money for social insurance, health insurance and unemployment insurance.

The VGCL's minimum wage hike proposal is still lower than the salaries most labourers receive. For example, the VND550,000 increase for Ha Noi and HCM City and the 2015 minimum wage of VND3.1 million will add up to about VND3.6 million ($160), which is still lower than what enterprises are paying for labourers right now.

Why has the VGCL set a deadline of 2017 for implementing the regional minimum wage increase to meet labourers' minimum living costs?

The 2014 Law on Social Insurance states that from August 1, 2018 the payment for social insurance must be equal to labourers' total income.

If the regional minimum wage is increased following the VGCL's proposal, we can meet the required increase by 2017.

Also, the 2012 Labour Code says the minimum wage must meet minimum acceptable living costs for labourers and their families.

Why should we need to wait until 2020, as the VCCI has proposed? — VNS

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