Minimum hourly wage ‘forgotten’ for 10 years

The draft decree stipulating the minimum wage is being consulted by ministries and sectors, expected to be implemented from July 1. For the first time, the Ministry of Labour, Invalids and Social Affairs, which drafted the draft, introduced a minimum hourly wage, ranging from 15,600 to 22,500 VND, corresponding to four regions. This is a new type of minimum wage, aimed at implementing the 2019 Labor Code, effective from the beginning of 2021.

The purpose of the hourly minimum wage is to expand coverage and protect groups of workers who do flexible, part-time work in households and small businesses such as restaurants, supermarkets, and bars. coffee… Calculation is converted to monthly minimum salary and standard working time. The Ministry of Labor explained this method to avoid causing disturbances in the payment of wages to employees, negatively affecting labor relations in the enterprise.

In fact, the minimum wage is now included in the Labor Code 2012 (enforced since 2013, now no longer valid). Article 91 of the Code stipulates that “minimum salary is determined by month, day, and hour and by region and industry”. Until the Labor Code 2019, the industry minimum wage was abandoned, only set by region, set by month and hour. But the new annual salary adjustment documents specifically stipulate the monthly minimum wage without the hourly minimum wage.

Despite the introduction of the 2012 law, there have been no specific regulations on how to implement the minimum hourly wage for the past 10 years. Mr. Pham Minh Huan, former Deputy Minister of Labour, Invalids and Social Affairs, said that when the minimum wage was initially included in the draft Labor Code in 2012, there were concerns about the lack of research basis on this topic. How to calculate suitable for Vietnam. But another stream of opinions said that it should be included because the world has done it for a long time.

The goal at that time was to gradually study to separate hourly wages from monthly wages, and proceed to apply this type. While the world largely applies the hourly minimum wage, Vietnam has not yet studied the specific model and calculation method. According to Mr. Huan, the ideal is based on the living needs and wages of workers, plus the coefficient is not fixed because of the irregular nature of the work.

After 5 years of running the meetings of the National Wage Council, Mr. Huan said that the negotiations mainly focused on adjusting the monthly minimum wage increase, applied to the formal sector and with labor contracts. Because the salary is still quite low, in 2013 – when the 2012 Labor Code took effect, the adjusted regional minimum wage only fluctuated from 1.65 to 2.35 million VND, so it had to be gradually increased. In contrast, the informal sector, part-time work is still floating to allow the market to adjust, the parties negotiate.

The impact of the pandemic caused a part of labor to move from the formal to the informal sector. Mr. Huan said that in order to increase the coverage of security and protect hourly workers, the application of the minimum hourly wage is reasonable. But first, it is necessary to clearly determine whether the minimum monthly salary or the minimum hourly wage is used as a background, from which there are scientific researches, international experiences, labor market surveys, and then a calculation formula. ensure the rights of workers.

“The proposed equivalent conversion from monthly to hourly wages does not make much sense, making the minimum wage lower,” he assessed.

For two consecutive sessions, attending the negotiating sessions of the National Wage Council, Dr. Pham Thi Thu Lan, Deputy Director of the Trade Union, General Confederation of Labor, said that from the beginning of 2020, the pandemic has impacted The negative effect caused the minimum wage increase to be delayed for up to two years, so the hourly minimum wage has only been discussed in the last two sessions. The calculation method is just the equivalent conversion from the monthly minimum wage divided by the number of hours worked.

When the Technical Department of the Wage Council came up with this calculation, the General Confederation disagreed, saying that the minimum monthly salary was already very low, so the conversion would drag the hourly wage as well. Hourly wage workers are more disadvantaged than monthly wages because they are not entitled to leave, sickness, social insurance, health insurance, and allowances. The owner only needs to pay them “one piece” and there are no additional obligations.

Union representatives are concerned that the equivalent conversion may cause wages to be “shifted” from monthly to hourly to reduce costs for businesses. Regulations on monthly salary workers work 8 hours a day, businesses can recruit people to work 7 hours and pay hourly wages, without having to bear other costs such as monthly salary.

After discussion, the National Wage Council agreed to convert the equivalent to the draft proposal to cause less disturbance in the payment of wages. However, Ms. Lan still maintains the opinion that it is necessary to add at least 10% K-factor if equivalently converted from monthly salary. “Supposing in the case of extra calculation, plus the standard hourly minimum wage, it also fluctuates from 17,000 VND to nearly 25,000 VND, still very low”, she pondered.

The National Wage Council on April 12 unanimously proposed to increase the regional minimum wage by 6% from July 1, 2022. If approved, the minimum wage in Region I, respectively, is 4.68 million; Region II is 4.16 million VND, Region III is 3.64 million VND and region IV is 3.25 million VND. On this basis, the proposed minimum hourly wage for region I is 22,500 VND; Region II is 20,000 VND, Region III is 17,500 VND and Region IV is 15,600 VND.

Hong Chieu