From 1 Jan 2020 to increase salary for contract employees

Starting from 1 Jan 2020, employees working under labor contracts will receive a regional minimum wage increase in accordance with the Government's Decree No. 90/2019 / ND-CP. To better understand this new decree, Binh Duong Newspaper had an interview with Phạm Văn Tuyên, Deputy Director of provincial Department of Labor - Invalids and Social Affairs.

Employees are happy.

- Could you elaborate on the subjects covered by the decree?

- Decree No. 90/2019 / ND-CP stipulates the regional minimum wage for employees working under labor contracts, the subjects of application include: Employees working under labor contracts in accordance with the Labor Code; enterprises established and managed organizations under the Enterprise Law; Vietnamese cooperatives, unions of cooperatives, cooperative groups, farms, households, individuals and other organizations that employ laborers under labor contracts; foreign agencies, organizations, international organizations and individuals in Vietnam that employ laborers under labor contracts (except in cases of international treaties, in which Vietnam is a contracting party, contains provisions different from provisions of this decree).

- Sir, according to this decree, how will the regional minimum wage be applied specifically in Binh Duong?

- According to the decree, the regional minimum wage applicable to businesses from 1 Jan 2020 is as follows: Region 1: 4,420,000 VND / month; Region 2: 3,920,000 VND / month; Region 3: 3,430,000 VND / month; Region 4: 3,070,000 VND / month. The regional minimum wage this year increases by 5.5% compared to the minimum wage in 2018.Thus, according to the prescribed regions, employees in the province will enjoy an increase from 150,000 to 240,000 VND / person / month. Based on the list of areas where the regional minimum wage is specified in the Appendix to this Decree, currently in Binh Duong province, the regional minimum wage level of region 1 is 4,420,000 VND / month.

The regional minimum wage is the lowest salary agreed by enterprises and employees to adjust salaries in wage scale, salaries stated in labor contracts, and salaries paid to employees must be consistent with labor law; at the same time, must ensure reasonably wage correlation between untrained workers and trained workers with high professional and technical qualifications, between newly recruited workers and senior workers. The lowest salary that an enterprise pays to an employee attaining vocational training (including employees who are trained by enterprises or learn by themselves and then are inspected and arranged by enterprises to do jobs requiring vocational training) must be at least 7% higher of the regional minimum wage. The gap between the two adjacent wage grades must ensure encouragement for employees to improve their professional and technical qualifications, gain experience, develop talents but at least equal to 5%.

To apply the regional minimum wage, enterprises must not eliminate or cut the salary regimes when employees work overtime, work at night, work in heavy, toxic  labor conditions, material incentives for these employees must be based on provisions of labor law. While setting up the wage scale and payroll, enterprises must consult organizations representing the labor collectives, send to district labor state management agencies, and publicize at the workplace to all employees before implementation.

- How is this Decree implemented in Binh Duong and are there any differences from other provinces and cities?

- Lately, we held a conference to train and popularize decrees and regulations on regional minimum wage in 2020, guidance documents on the implementation of some contents of the Labor Code, Law on Employment, and Law on occupational safety sanitation for domestic and foreign enterprises in the province. In this conference, in addition to related departments, agencies and sectors, there were also business owners, representatives of company Trade Unions as well as HR officials of businesses and units. At present, most enterprises have publicized the salary adjustment plan for employees. Especially, grassroots Trade Unions in collaboration with business owners to communicate and disseminate about the implementation of regional minimum wage adjustment to all employees; Thereby, grasping and resolving recommendations and questions of workers, leaving no contradictions and collective labor disputes. We also regularly cooperate with relevant industries to disseminate labor regulations and policies to all employers and employees to build harmonious labor relations, stability.

When enterprises adjust their payroll in accordance with the decree, we also suggest that enterprises distinguish between wage increases and the annual regional minimum wage adjustment. These two things must be separated and done clearly, avoiding creating misunderstanding for employees.

- Sir, New Year and Tet 2020, how is the situation of salaries and bonuses for employees in enterprises?

- New Year 2020, employees are entitled to 1 day off; and 5 days off on Lunar New Year 2020.These days-off, employees are entitled to full salary. To update the situation of salaries and bonuses for employees, the Department issued documents to recommend businesses to collaborate and discuss with grassroots trade unions to review labor contracts and agreements. collectively collective labor, salary and bonus payment regulations to implement fully and correctly salary and bonus regimes for employees according to the agreed contents. The Department also asked businesses to develop a bonus plan based on their production and business results in 2019 as prescribed in Article 103 of the Labor Code; at the same time, publicize these to all employees.

In addition, the Department also required businesses to report on caring activities for employees on Tet 2020, salaries and bonuses sent to Department of Labor - Invalids and Social Affairs.

- Thank you Sir!

Reported by Kim Ha - Translated by Ngoc Huynh