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Vietnam labor confederation proposes raising minimum wages by at least 14.3% in 2016

Monday, October 12, 2015, 16:44 GMT+7
Vietnam labor confederation proposes raising minimum wages by at least 14.3% in 2016

The Vietnam General Confederation of Labor (VGCL) has suggested that the government hike regional minimum wages in 2016 by at least 14.3 percent from the current rates.

VGCL chairman Dang Ngoc Tung on Tuesday said the confederation had sent to Prime Minister Nguyen Tan Dung a proposal that regional minimum wages should be increased by such a rate next year, instead of only 12.4 percent as agreed at a meeting organized by the Vietnam National Wage Council on September 3.

The meeting was the third held to work out solutions to the issue between the Vietnam Chamber of Commerce and Industry (VCCI), which represents employers and asked for an expansion of no more than 10 percent, and the VGCL, which supports employees and requested that the increase be 16.8 percent.

However, during the third meeting, the VCCI demanded an 11 percent increase while the VGCL agreed to lower its rate to 14.3 percent.

After further discussions, both sides agreed for a poll to take place and a 12.4-percent rate was then passed.  

But after re-considering the actual conditions directly related to the wage, income, and living cost of laborers, the VGCL finds that the rate is not satisfactory as it will not help much in improving the difficult living conditions of workers, Tung said.

He cited Vietnam’s higher-than-expected economic growth in the first nine months of this year, the increasing number of newly-established businesses, and some other positive factors to advocate the proposed 14.3 percent rise in regional minimum wages.

He emphasized that such a wage increase will create a basis for the country to meet its target that minimum wages will cover 100 percent of the minimal living cost of employees in 2017.

Meanwhile, representatives of both domestic business associations and foreign-invested enterprises have reported to the government that the 12.4-percent increase rate is too high to be applied, Pham Minh Huan, Deputy Minister of Labor, War Invalids and Social Affairs and chairman of the Vietnam National Wage Council, told Tuoi Tre(Youth) newspaper.

The council has submitted to the government a plan to raise regional minimum wages in 2016 by 11.6-12.9 percent, depending on each zone, Deputy Minister Huan said.

Zone 1 covers the urban parts of Hanoi and Ho Chi Minh City; Zone 2 is applicable to the rural areas of Hanoi and Ho Chi Minh City, along with the urban regions of Can Tho City, Da Nang City and Hai Phong City; Zone 3 comprises provincial cities and the districts of Bac Ninh Province, Bac Giang Province, Hai Duong Province, and Vinh Phuc Province; and Zone 4 consists of the remaining localities.

The government is expected to issue a decree on new regional minimum wages in October, he said.

According to the VGCL, the 2015 minimum wage rates, which are 14.3 percent higher than those in 2014, can only cover 78-85 percent of the minimal living cost of employees.

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