Official Dispatch No. 2750/LDTBXH/LDTL dated August 09, 2012 of the Ministry of Labor, War Invalids and Social Affairs consulting for plan on adjusting the region-based minimum wage levels in 2013 for enterprises of all types

To:The presidents of the People’s Committee of central-affiliated cities and provinces

For implementation of provision in article 56 of the Labor Code and the Conclusion No. 23-KL/TW, of May 29, 2012, at the 5^thconference of the XI Party’s Central Committee, on “Some issues on wage, social insurance, preferentialallowances for people with meritorious services to the nation and orienting reform till 2020” of theParty’s Central Committee, the Ministry of Labor, War Invalids and Social Affairs suggests the Presidents of the People’s Committee of central-affiliated cities and provinces to direct the provincial Services of Labor, War Invalids and Social Affairs in coordination with relevant units implementing some following contents:

1. To review, evaluateperformance of region-based minimum wage levels within their managed localities as prescribed in the Government’s Decree No. 70/2011/ND-CP, of August 22, 2011, in which evaluate good faces, bad faces and reason enclosed with figures summing up on enterprises’ implementation of region-based minimum wage levels (number applying higher, lower than under levels of regions, types of enterprise).

2.To take part in consulting for plan on adjusting the region-based minimum wage levels in 2013 for enterprises of all types (enclosed plan).

To wish the Presidents of the People’s Committee of central-affiliated cities and provinces pay attention to and direct the provincial Services of Labor, War Invalids and Social Affairs in coordination with the provincial Confederation of Labour, branch of Vietnam Chamber of Commerce and Industry to organize discussion with the management board of industrial zones (if any), professional associations, relevant agencies, organizations, units, investors and enterprises located in area, and on that basis, to sum up and send opinion to the Ministry of Labor, War Invalids and Social Affairs before August 31, 2012 (concurrently send by fax number: 043.9386139) in order to sum up and submit to the Government for consideration and decision.

PLAN

ADJUSTMENT OF THE REGION-BASED MINIMUM WAGE LEVELS IN 2013 FOR ENTERPRISES OF ALL TYPES
(Enclosed with the official dispatch No.2750/LDTBXH-LDTL, of August 09, 2012 of the Ministry of Labor, War Invalids and Social Affairs).

1. Regardingthe region-based minimum wage levels:

Based on provisions of the Labor Code, roadmap of adjustment of minimum wage submitted the 5^thconference of the XI Party’s Central Committee, the actual manufacture and business situation of enterprises, defining the region-based minimum wage levels applicable to enterprises in 2013 under the following plan:

Plan 1:Adjusting the region-based minimum wage under roadmap submitted to the Central Committee, the adjusted level increases average 4 regions about 36%, specifying:

-Region 1: The level of VND 2,700,000/month.

-Region 2: The level of VND 2,400,000/month.

-Region 3: The level of VND 2,130,000/month.

-Region 4: The level of VND 1,930,000/month.

This plan’s strong point is implementation under proper spirit of the Conclusion No. 23-KL/TW, of May 29, 2012, at the 5th conference of the XI Party’s Central Committee, on “Some issues on wage, social insurance, preferential allowances for people with meritorious services to the nation and orienting reform till 2020” of the Party’s Central Committee (hereinafter referred to as the 5^thConference of Central Committee) being "adjusting the region-based minimum wage levels of enterprises faster in order to attain level of minimum demand by 2015".

However, its weak-point is the adjusted level being high, causing big expense, affecting to payable capacity of enterprises, especially for medium and small - sized enterprises and labor-intensive enterprises in condition which 2012 manufacture and business meets many difficulties.     

Plan 2:Based on actual manufacture and business situation of enterprises in 2012 meeting many difficulties, to adjust the region-based minimum wage equal 90% comparing to plan 1, the adjusted level increases average 4 regions about 25%, specifying:

-Region 1: The level of VND 2,500,000/month.

-Region 2: The level of VND 2,250,000/month.

-Region 3: The level of VND 1,950,000/month.

-Region 4: The level of VND 1,800,000/month.

This plan’s strong point is conform with actual manufacture and business situation of enterprises meeting many difficulties, adjustment of the region-based minimum wage affecting less than to the input expenses of enterprises, the adjusted level corresponding to the adjusted level of common minimum wage.

However, this plan’s weak-point is the roadmap of adjustment of region-based minimum wage submitted to the conference of 5th Central Committee having not been implemented, in the following years, must adjust at higher level for target on ensuring minimum demand by 2015.   

2.Regarding time of adjustment

The Government may publish adjustment of the region-based minimum wage levels for enterprises in October 2012 and execute on January 01, 2013. During discussion, some proposals assume that if many enterprises in 6 months of 2012 end year meeting many difficulties, it should postpone implementation for 3 to 6 months in order to share with the manufacture and business meeting difficulties of enterprises.

3.Regarding regions apply the region-based minimum wage levels:

4 regions, and list of area in 4 regions are unchanged as prescribed in the Government’s Decree No. 70/2011/ND-CP, of August 22, 2011. If localities propose to adjust regions, provincial services of Labor, War Invalids and Social Affairs coordinates with Confederation of Labour, Vietnam Chamber of Commerce and Industry to organize discussion with the management board of processing and exporting zones, industrial zones (if any), professional associations, relevant agencies, organizations, units, investors and  enterprises located in areas, on that basis, to sum up and report to People’s Committees of central-affiliated cities and provinces to send to the Ministry of Labor, War Invalids and Social Affairs to submit to the Government for consideration, decision.