Regional minimum wage for contracted employees will increase by 7.3% from January 1^st, 2017.

In fact, on November 14^th, 2016, Vietnamese Government issued Decree No. 153/2016/ND-CP providing for regional minimum wage rates applied to employees working under an employment contract.

  Related: Payroll and Human Resource

In accordance with the aforementioned Decree, the minimum wage for employees working under an employment contract as prescribed by the Labor Code will increase between 180,000-250,000 VND (8.18-11.3 USD ; 7.5-10.40 EUR) per month.

More in detail, regional minimum wage rates shall be prescribed as follows to enterprises operating within unit subregions of:

• Region I: 3,750,000/ month
• Region II: 3,320,000/ month
• Region III: 2,900,000/ month
• Region IV: 2,580,000/ month

  Related: Tax Advisory   

Moreover:enterprises operating within the subregions newly established from one or more subregions where the regional minimum wage rates vary shall adopt the same rates as applied to the highest-rate subregions.
Employees working for branches or representative offices of companies will be paid the wage applied for the region that the offices are located in.
The decree also stipulates that enterprises must not cut down or abolish payments for employees for overtime or in extreme working conditions as well as other supports and allowances.

  Related: Business Advisory

The aforementioned Decree will affect all overseas institutional entities and international organizations and foreigners operating within the territory of Vietnam that hire employees under employment contracts and it will increase the compulsory insurance contributions for both employer and employee. 

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