Is increasing the base or minimum wage beneficial to workers?

Thục Quyên |

Reader Minh Duc asked: Is it better for workers to increase the current base salary of 2.34 million VND to a higher level or to increase the minimum wage?

YouMe Law Firm LLC replied:

Clause 2, Article 3 of Decree 73/2024/ND-CP is as follows:

Base salary

1. Basic salary used as basis:

a) Calculate salary levels in salary tables, allowance levels and implement other regimes according to law provisions for subjects specified in Article 2 of this Decree;

b) Calculate operating and living expenses according to the provisions of law;

c) Calculate deductions and benefits based on basic salary.

2. From July 1, 2024, the basic salary is 2,340,000 VND/month.

Thus, the basic salary is the basis for calculating salaries for cadres, civil servants, public employees, salary and allowance recipients, and employees working in agencies, organizations, and public service units receiving operating expenses supported by the state budget.

As for workers' wages, according to Clause 1, Article 90 of the 2019 Labor Code, this is the wage agreed upon by the employee and the employer to perform certain work, including wages according to work or position, salary allowances and other supplements.

Therefore, salary increases for workers depend on the agreement between the parties and are not implemented according to the basic salary increase policy.

Regarding regional minimum wages, according to Clause 1, Article 91 of the 2019 Labor Code, it is stipulated as follows:

Minimum wage

1. Minimum wage is the lowest wage paid to workers doing the simplest work under normal working conditions to ensure the minimum living standard of workers and their families, in accordance with socio-economic development conditions.

2. Minimum wage is determined by region, fixed by month and hour.

3. The minimum wage is adjusted based on the minimum living standards of workers and their families; the correlation between the minimum wage and market wages; the consumer price index, economic growth rate; the relationship between labor supply and demand; employment and unemployment; labor productivity; and the payment capacity of enterprises.

4. The Government shall detail this Article; decide and promulgate the minimum wage based on the recommendations of the National Wage Council.

At the same time, according to Clause 2, Article 90 of the 2019 Labor Code, the salary according to the job or title must not be lower than the minimum wage.

Thus, the minimum wage is the lowest wage paid to employees. Therefore, in case the regional minimum wage increases higher than the actual salary of employees, the enterprise is required to increase the salary for employees with a salary at least equal to the regional minimum wage.

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