On 30 October 2009, the Government issued Decree No. 98/2009/ND-CP regarding area minimum wage rates for Vietnamese employees working for foreign entities in Vietnam ("Decree 98").
Decree 98 has introduced new area minimum wage rates to be paid to Vietnamese employees working for foreign-invested enterprises, foreign bodies and organizations, international organizations and foreign individuals in Vietnam with effect from 1 January 2010. The rates are divided into four types and correspond to four different areas based on the living standards of each area.
The new rates are as follows:
1. VND 1,340,000 per month is applicable to Area I
2. VND 1,190,000 per month is applicable to Area II
3. VND 1,040,000 per month is applicable to Area III
4. VND 1,000,000 per month is applicable to Area IV
The area minimum wage rates serve as the basis for calculating wage scales including those recorded in labour contracts, wage tables and allowances.
The Appendix to Decree 98 contains full details as to districts and other administrative units that comprise Areas I, II, III and IV. Notably, Area I comprises urban districts of Haoi and urban districts of Ho Chi Minh City.
Enterprises are encouraged to pay higher than the minimum wage rates and should any current wage rates be lower than the new minimum wage rates, the employer and the relevant employee should amend the wages stipulated in the labour contract to comply with the area minimum wage rates.
For inquiries related to this Client Alert, please contact:
Dao Nguyen (firstname.lastname@example.org)
Hoang Anh Nguyen (email@example.com)
Thinh Dan (firstname.lastname@example.org)