The Ministry of Home Affairs in Vietnam has put forward a proposal to increase the minimum wage by 7.8%, set to take effect on January 1, 2027. This proposed increase, which translates to an additional 310,000 to 390,000 VND, is part of a draft decree currently open for public consultation.

The suggested minimum wage will vary across four regions: Region I will see a monthly minimum of 5.7 million VND, Region II will have 5.08 million VND, Region III will be set at 4.45 million VND, and Region IV will have a minimum of 4.04 million VND. This adjustment is approximately 3.1% higher than the minimum living standards for workers projected until the end of 2027, aimed at enhancing the quality of life for employees.

According to the Ministry, this wage adjustment reflects a balance between the interests of workers and businesses, ensuring that while workers' living conditions are improved, the operational capabilities of companies are also maintained and developed.

Additionally, the draft decree outlines hourly minimum wages for the four regions: Region I at 27,400 VND/hour, Region II at 24,400 VND/hour, Region III at 21,400 VND/hour, and Region IV at 19,400 VND/hour. These hourly rates are calculated based on the monthly minimum wage and the standard working hours as per the Labor Code.

The Ministry of Home Affairs emphasizes the importance of annual reviews by local authorities regarding the applicability of minimum wage levels. In recent assessments, five provinces and cities—Hung Yen, Da Nang, Dong Nai, Ho Chi Minh City, and Hai Phong—have proposed adjustments to their respective minimum wage regions. These proposals are intended to regulate the labor market across regions and ensure fair compensation relative to neighboring areas, especially as local labor markets evolve and infrastructure improves.

The draft decree applies to all workers under labor contracts as defined by the Labor Code, including employers such as businesses, organizations, cooperatives, households, and individuals hiring workers.