The Ministry of Home Affairs in Vietnam has put forward a proposal to increase the minimum wage by 7.8%, which translates to an increase of 310,000 to 390,000 VND. This adjustment is set to take effect on January 1, 2027. The proposal is currently open for public feedback as part of a draft decree regarding minimum wage regulations for employees working under labor contracts.

The suggested increase aligns with recommendations from the National Wage Council, which has recently held discussions to reach a consensus on this matter. The proposed minimum wage will be higher by approximately 3.1% compared to the minimum living standards for workers projected until the end of 2027, aiming to enhance the quality of life for employees.

The Ministry emphasized that this wage adjustment seeks to balance the interests of both workers and businesses, ensuring that while workers' livelihoods are improved, businesses can still maintain and grow their operations. The hourly minimum wage will continue to be calculated based on the monthly minimum wage and the standard working hours as stipulated in the Labor Code.

In relation to regional wage adjustments, the Ministry has mandated that localities review and assess the areas and current minimum wage levels annually. If any locality proposes a change, it must engage in discussions with relevant agencies, investors, and businesses. Following these reviews, five localities—Hung Yen, Da Nang, Dong Nai, Ho Chi Minh City, and Hai Phong—have suggested adjustments to their applicable minimum wage areas.

The Ministry has acknowledged that these localities have followed the proper procedures for consulting with organizations and businesses in their regions. The adjustments aim to regulate the labor market across different regions, creating a reasonable balance in labor costs among neighboring areas, especially in regions experiencing significant labor market development or improved infrastructure.

The draft decree outlines that the regulations will apply to employees working under labor contracts as defined by the Labor Code, as well as employers including businesses, organizations, cooperatives, households, and individuals who hire laborers. Employers are required to review and adjust agreements in labor contracts and collective labor agreements to align with the new regulations, ensuring that no wage reductions occur for overtime, night work, or other legally mandated benefits.

Any agreements that provide better conditions for workers than those specified in the draft decree will remain in effect unless otherwise agreed upon by the parties involved.