You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

December 24, 2019

Vietnam’s Regional Minimum Wages to Increase

Taylor Vinters – International Employment Law Update

On January 1, 2020, region-based minimum wages for non-state employees in Vietnam will increase by an average of 5.5%. The increase was passed by Vietnam’s National Wage Council on July 11, 2019, and approved by the prime minister on November 17 of the same year.

As the cost of living varies dramatically throughout Vietnam, the government divides the country into four salary regions for the purpose of issuing minimum wages, reflecting the economic realities of the urban/rural divide and other developmental factors. The increase in the minimum wage for 2020 is summarised in the table below.

Monthly minimum wage by region:

  • Companies are not permitted to pay unskilled employees monthly wages which are lower than the relevant minimum wage. Wages paid to employees who have undergone vocational training should be at least 7% higher than the minimum salary, according to the country’s Ministry of Labor, Invalids and Social Affairs.Region I includes the urban and suburban districts of Hanoi and Hai Phong in the north, and the urban and suburban districts of Ho Chi Minh City and its neighboring provinces of Dong Nai, Binh Duong, and Ba Ria – Vung Tau in the south.
  • Region II includes the outskirts of Hanoi and Ho Chi Minh City, as well as other large and medium-sized cities throughout Vietnam, such as Da Nang, Nha Trang, and Can Tho.
  • Region III includes smaller provincial cities and suburban districts.
  • Region IV includes all remaining areas, including the least developed and sparsely populated rural and mountainous regions of Vietnam.

Comment

Employers with employees in each of the four regions mentioned above should be aware of these changes and ensure that they are complying with them by paying their employees the minimum wage for that region. Contract and payroll reviews are therefore recommended to ensure compliance.

RELATED INSIGHTS​ 

February 28, 2024
The Myanmar Investment Commission (MIC) has announced the opening of the trial period for MIC-permitted or MIC-endorsed companies to reenter investment data for using the Myanmar Investment Online (MyInO) system. The trial period is open until June 30, 2024. The MyInO system allows for the submission and recordal of applications for investment under the Myanmar Investment Law. With the implementation of phase 2 from September 1, 2023, applications for the appointment or resignation of foreign experts and employees within MIC-permitted or MIC-endorsed companies can now be submitted manually or through the Investment Monitoring System available on MyInO. To initiate the application process in MyInO, applicants are required to create an account on the platform. Subsequently, companies holding an MIC permit or endorsement must reenter all investment-related data since the obtaining of the relevant permits/endorsements, in compliance with the announcement. Following this data update, applications can be filed through MyInO. After this trial period, the submission of applications for appointments will be available online. The benefit of using MyInO to submit a foreign expert or employee appointment or resignation application is that the application can be submitted within 30 days of the foreign expert’s arrival in Myanmar. In contrast, hard copy applications must be submitted within seven working days of arrival. According to the Myanmar Investment Law, a foreign expert is one who qualifies as a senior manager, technical or operational expert, or advisor in permitted or endorsed companies within Myanmar. For assistance with completing the investment data reentry process or filing applications for appointment or resignation of foreign experts or employees, or for further details on any aspect of the Investment Monitoring System under MyInO, please contact Tilleke & Gibbins at [email protected].
February 9, 2024
Tilleke & Gibbins employment specialists in Myanmar have contributed an updated Employment and Employee Benefits in Myanmar overview for Thomson Reuters Practical Law, an online publication that provides an overview of employment and employee benefits in jurisdictions worldwide. The Myanmar overview was written by members of Tilleke & Gibbins’ Yangon office, including Yuwadee Thean-ngarm, director; Nwe Oo, senior associate; and Kyaw Min Tun, associate. The chapter covers a wide range of key employment topics, including employment status, background checks, regulation of the employment relationship, minimum wage, working hours and holidays, illness and injury of employees, discrimination and harassment, termination of employment, resolution of employer-employee disputes, redundancy/layoffs, employee representation and consultation, business transfer and insolvency, employee relocation, health and safety obligations, taxation of employment income, intellectual property issues, and more. Practical Law, one of the many legal reference resources from Thomson Reuters, publishes a wide range of guides for hundreds of jurisdictions and practice areas. The Employment and Employee Benefits Global Guide covers 44 jurisdictions around the world, with Tilleke & Gibbins also providing the Vietnam chapter of the guide. To view the latest version of the Employment and Employee Benefits in Myanmar overview, please visit the Practical Law website and enroll in the free Practical Law trial to gain full access.
January 12, 2024
On December 28, 2023, Cambodia’s Ministry of Labor and Vocational Training (MLVT) issued Notification No. 110/23 on the issuance of work permits for foreign employees, in accordance with the country’s Labor Law and Prakas 195 dated August 20, 2014, on work permits and employment cards for foreign employees. This is a more comprehensive notification than existed previously, as it specifically clarifies the parties that are required to apply for work permits and employment cards. Notification No. 110/23 specifies that the following types of foreign individuals must hold a valid foreign work permit and/or employment card in order to work in Cambodia: A foreign employer whose name is stated in an enterprise’s patent tax certificate must hold a foreign work permit. A foreign employee whose name is stated in an enterprise’s patent tax certificate must hold a foreign work permit and an employment card. Self-employed individuals must hold a foreign work permit and an employment card. Applications for work permits and employment cards can be submitted through the MLVT’s online portal, accompanied by the following required documents: Valid passport; Latest patent tax certificate; Physical examination form; and Photo (4×6 cm) However, foreign shareholders and members of the board of directors as defined in the company’s articles of incorporation who do not have a Cambodian resident visa are not required to obtain a work permit or employment card. For more information on regulations and requirements for foreign employees in Cambodia, please contact Tilleke & Gibbins at [email protected].
December 15, 2023
Tilleke & Gibbins’ office in Yangon provided the Myanmar chapter to the Guide to Restructuring a Cross-Border Workforce from International Employment Lawyer. This global guide, which covers 45 jurisdictions worldwide, examines the issue of workplace restructurings, particularly in relation to the needs of multinational companies. The Myanmar chapter was written by Kyaw Min Tun, an associate in the firm’s Myanmar office. The Q&A-style chapter focuses on key areas related to workplace restructuring, covering each of the following topics in detail: Reduction in workforce; Restructuring or reorganization of the business; Changing terms and conditions; and Areas to watch. A PDF of the Myanmar chapter can be downloaded through the button below. Tilleke & Gibbins also provided the Cambodia, Laos, Thailand, and Vietnam chapters to the Guide to Restructuring a Cross-Border Workforce 2024. To browse the full guide for all 45 jurisdictions, please visit the International Employment Lawyer website.