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VietNamNews

Minimum wage must cover basic needs

Update: May, 24/2018 - 09:00
A minimum wage should be set that it is sufficient to attain a basic standard of living for labourers and their families, a new resolution on wage reform issued by the 12th Party Central Committee said.– Photo thanhnien.vn

HÀ NỘI — A minimum wage should be set that it is sufficient to attain a basic standard of living for labourers and their families, a new resolution on wage reform issued by the 12th Party Central Committee said.

The Government’s Decree No. 27/2018/ND-CP is a reflection of the Party’s view on specific goals on wage reform by 2030.

The resolution said that paying a proper and sufficient wage to labourers is an invaluable investment in human resources, and will motivate increased productivity, while ensuring a fair deal for workers.

Regarding salary reform for all public employees and Government officials, the resolution stated that wages ought to be paid based on each person’s position and title in compliance with the State’s resources. State servants’ wages must be paid in a manner that will motivate higher productivity, which will in turn help to build a more effective political system.

Minimum wage in the private sector must be set to protect disadvantaged labourers, regulate the labour market, and to serve as a basis for salary negotiations.

From 2018 to 2020, any wage increase for the public sector must be regulated based on the National Assembly’s resolution and must not be lower that the consumer price index. This must also go hand-in-hand with reforming the organisational structure of the political system to produce an effective and efficient civil service.

Wage increase for enterprises in the private sector must reflect the socio-economic development of the country, and the capacity of each enterprise, so that by 2020, the minimum wage will allow labourers to cover their basic needs.

From 2021 onwards, enterprises can implement policies on wages based on negotiations between employers and employees, in which the State will not intervene.

Since July 1, 2018, the minimum wage for public officials, public employees and armed forced personnel will be increased to VNĐ1.39 million (US$61) per month from the current VNĐ 1.3 million, according to the Government’s Decree No. 27/2018/ND-CP.

The new basic salary will be applied for those working in agencies, organisations and non-production units of the Party and the State, as well as in State-funded political-social organisations and associations, and the armed forces.

The basic salary is used as the basis for calculating salary, allowances and other payments. It will also be applied when calculating operating and living allowances and other deductions and entitlements.

In Việt Nam, there are four different minimum wage regions which relate specifically to private enterprises, which are supposed to reflect the cost of living in each area. Region I, including Hà Nội and Hồ Chí Minh City, has the highest minimum wage, while region IV, which is for rural areas, has the lowest.

In 2018, wage rises brought the minimum wage for private enterpirses in region I to VNĐ3.98 million ($175) a month, region II to VNĐ3.53 million, region III to VNĐ3.09 million, and region IV to VNĐ2.76 million.

It has long been known in Việt Nam that the average wage is not enough to live on. A recent study by the Research Center for Employment Relations, conducted for the Global Living Wage Coalition, estimated a living wage in Hồ Chí City to be VNĐ6.44 million ($288), much higher than the set minimum wage mentioned above. — VNS

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