Decree 74/2024/ND-CP dated June 30, 2024, of the Government, regulates the regional minimum wage for employees working under labor contracts.

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1. Regional minimum wage

The Decree regulates regional minimum wages for four economic regions as follows:

a, Region I: 4,960,000 VND/month

b, Region II: 4,410,000 VND/month

c, Region III: 3,860,000 VND/month

d, Region IV: 3,450,000 VND/month

2. Scope of application

This Decree applies to:

• Employees work under a labor contract.
• Businesses, agencies, organizations, cooperatives, households, and individuals hire workers.

3. Classification of regions

• 1Region I: Large cities and economically developed areas: Hanoi and Ho Chi Minh City.
• 2Region II: Areas with an average level of economic development such as Hai Phong and Da Nang.
• 3Region III: Areas with lower levels of economic development such as Nha Trang and Can Tho.
• 4Region IV: Rural, mountainous areas and other economically underdeveloped areas.

4. Time of application

The Decree takes effect from July 1, 2024, and replaces the previously prescribed regional minimum wage.

5. Responsibilities of related parties

• Businesses and employers: Must pay employees higher than the regional minimum wage.
• State management agencies: Monitor and inspect regional minimum wage implementation, ensuring workers’ benefits.
• Employees: Have the right to request the employer to pay wages according to the prescribed regional minimum wage.

6. Other regulations

Allowances, allowances, and other supplements are not included in the minimum wage.

Encourage businesses to negotiate with workers on salaries higher than the regional minimum wage.

Decree 74/2024/ND-CP aims to ensure a minimum income level for workers, contributing to improving quality of life and promoting sustainable socio-economic development in Vietnam’s economic regions.

Details of Decree 73/2024/ND-CP:

DECREE

Regulation of regional minimum wage for employees working under labor contracts

Article 1. Scope

Firstly, This Decree regulates the monthly minimum wage and the minimum hourly wage applicable to employees working under labor contracts.

Article 2. Subjects of application

– Employees work under labor contracts according to the provisions of the Labor Code.

– Employers according to the provisions of the Labor Code, including:

1. a) Enterprises according to the provisions of the Enterprise Law.
2. b) Agencies, organizations, cooperatives, households, and individuals that hire and employ workers to work for them according to agreement; In case the employer is an individual, he must have full civil capacity.

– Other agencies, organizations, and individuals related to the implementation of the minimum wage specified in this Decree.

Article 3. Minimum wage

Secondly, Regulations on monthly minimum wage and hourly minimum wage for employees working for employers by region are as follows:

Finally, The list of areas of Region I, Region II, Region III, and Region IV is specified in the Appendix attached to this Decree.

The application of regional area is determined according to the employer’s place of operation as follows:

a) surely, Employers operating in any region shall apply the minimum wage prescribed for that area.

b) also, If the employer has units or branches operating in areas with different minimum wage levels, which area the unit or branch operates in will apply the minimum wage prescribed for that local area.

c) otherwise, Employers operating in industrial parks and export processing zones located in areas with different minimum wages shall apply according to the area with the highest minimum wage.

Regulates Regional Minimum Wage

d) thus, Employers operating in an area with a change of name or division of administrative units shall temporarily apply the minimum wage prescribed for the area before the change of name or division of administrative units until the Government has new regulations.

d) especially, Employers operating in an area newly established from one or multiple areas with different minimum wage rates shall apply the minimum wage according to the area with the highest minimum wage.

e) following, Employers operating in an area that is a city under a province newly established from one or multiple areas in Region IV shall apply the minimum wage prescribed for the area under the city. So, The remaining provinces are in Clause 3 of the Appendix attached to this Decree.

Article 4. Application of minimum wage

Additionally, The minimum monthly salary is the lowest as a basis for negotiation and payment to employees applying the monthly salary method, ensuring the salary according to the job or title of the employee who works fully. Normal working hours during the month and completion of agreed labor or work norms must not be lower than the monthly minimum wage.

So, The hourly minimum wage is the lowest as a basis for agreement and payment to employees applying the hourly wage method, ensuring a salary according to the job or title of the employee and completing the agreed labor or work quota which must not be lower than the hourly minimum wage.

Also, For employees applying weekly or daily salary or product or piece salary, the salary of these salary methods, if converted monthly or hourly, must not be lower than the monthly minimum salary or a minimum hourly wage.

Regulates Regional Minimum Wage

In addition, Salary is converted monthly or hourly based on normal working hours selected by the employer according to the provisions of labor law as follows:

Hence, The converted monthly salary is equal to the weekly salary multiplied by 52 weeks divided by 12 months, or daily wage multiplied by the number of normal working days in the month, or product-based salary or piece-rate salary made during normal working hours of the month.

Besides, The converted hourly salary is equal to the weekly or daily salary divided by the number of normal working hours per week or per day; or product-based salary, contract salary divided by the number of hours worked during normal working hours to produce products or perform contract tasks.

Article 5. Effect and responsibility for implementation

1. This Decree takes effect from July 1, 2024.
2. Decree No. 38/2022/ND-CP dated June 12, 2022, of the Government regulating the minimum wage for employees working under labor contracts that expire from July 1, 2024.
3. When implementing the minimum wage specified in this Decree, the employer is responsible for reviewing the salary payment regimes in the labor contract agreed with the employee and the collective labor agreement. regulations and regulations of the employer to adjust and supplement accordingly.

REGIONAL MINIMUM WAGE

Furthermore, for agreed and committed salary content that is more beneficial to employees (such as a salary regime for workers doing jobs or positions that require education; vocational training is at least 7% higher than the minimum wage; and a salary regime for employees doing work; Positions with at least 5% more arduous, dangerous working conditions; compared to the salary of the job; or title of equivalent complexity, working under normal working conditions); will continue to be implemented, unless the parties agree otherwise.

Besides, The employer cannot remove or cut salary benefits when employees work overtime; when work at night; especially, compensation in kind, and other benefits according to the provisions of labor law.

So, Ministers, Heads of ministerial-level agencies; moreover, Heads of Government agencies, Chairmen of People’s Committees of provinces and centrally run cities; also employers are responsible for implementing this Decree.

Attached appendix: LIST OF AREAS APPLICABLE REGIONAL MINIMUM WAGE FROM July 1, 2024