Business associations propose delaying minimum wage increase

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The regional minimum wage for labours is proposed to rise by six per cent from July 1, 2022. Photo nguoiduatin.vn

Hà Nội — Eight associations with a large labour force have proposed the Government increase the regional minimum wage from January 1, 2023 instead of July 1, 2022 as per the National Wage Council’s decision.

They include the Japan Business Association in Việt Nam, the Việt Nam Association of Seafood Exporters and Producers, the Việt Nam Textile and Apparel Association, the Việt Nam Electronic Business Association, the HCM City Food Association, the Việt Nam Association of Electronic Enterprises, the Việt Nam Timber and Forest Products Association, Việt Nam Plastics Association, and Việt Nam Motorcycle Manufacturers Association.

In their petition to the Prime Minister, these associations also said that in the two years of 2020-21, the COVID-19 outbreak seriously affected businesses. Postponing the regional minimum wage increase would help the businesses have time to prepare.

These associations also believe that the difficulties caused by the pandemic will not end, as workers infected with COVID-19 continue to appear and new strains of COVID-19 still threaten production.

If the wage is increased from the beginning of July, it will be difficult for businesses to prepare in time. All production, financial and order plans of the enterprises were built at the end of the previous year so they are unable to increase the selling price to cover costs. Besides that, many businesses have increased their wages since the beginning of 2021 or 2022.

The petition also states that with current difficulties, many businesses would have to cancel contracts because of unstable financial situations, reduction of workers, and suspension or reduction of production.

The National Wage Council announced on April 12 that the regional minimum wage will rise by six per cent from July 1, 2022.

This increase is equivalent to a rise of VNĐ180,000-260,000 (US$7.86-11.36), which varies between regions.

Specifically, monthly minimum wages in Region 1, which covers Hà Nội and HCM City’s urban areas, will be VNĐ4.68 million ($203) per person; and in Region 2, covering Hà Nội and HCM City’s rural areas, along with major urban areas in the country like Cần Thơ, Đà Nẵng and Hải Phòng, will be VNĐ4.16 million per person.

Those in Region 3, or provincial cities and the districts of Bắc Ninh, Bắc Giang and Hải Dương provinces, will earn at least VNĐ3.64 million a month; and in Region 4, or the rest of the country, will receive a minimum of VNĐ3.25 million a month.

According to the National Wage Council, with this wage increase, production costs of enterprises are expected to increase by 0.5-0.6 per cent on average, of which production costs of textiles, garments and footwear industries will increase by 1.1 – 1.2 per cent.

Representing employers, the Việt Nam Confederation of Commerce and Industry (VCCI), has agreed with the salary adjustment, but wanted the implementation in early 2023. VCCI has proposed that the increase be about 3-5 per cent. — VNS

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