Vietnam to Implement Minimum Wage Hike in 2009

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Oct. 15 – Vietnam's Ministry of Labor, Invalids and Social Affairs said that beginning Jan. 1, 2009, monthly minimum salaries for employees in domestic enterprises will rise between VND110,000 to VND180,000 while those for foreign-invested businesses will increase by VND120,000 to VND200,000.

The changes are part of the agency's 2008-2012 salary, social insurance and allowance reform plan, that aims to standardize the minimum salary for all businesses by 2012.

The salary rates were based on GDP growth and consumer price index (CPI) in the first nine months of this year, wage increases in the labor market, enterprises’ payment capacity as well as economic development conditions and labour markets in each region.

Minimum wage is for employees who fill out the least demanding positions in a company. Pham Minh Huan, head of the ministry's wage department, told the Vietnam News Agency that for skilled workers, enterprises have to pay salaries that are 7 percent higher than the minimum levels.

He went on to say that the salary changes should not have a great impact on a company's expenditure and should only increase costs by 1.3 to 1.7 percent.

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