Ministry of Labour, War invalids and Social Affairs said:
According to Circular No. 17/2019/TT-BLDTBXH, the salary of direct production workers is determined on the basis of labor cost multiplied by the salary coefficient, allowances of the position, job multiplied by the basic salary and the salary increase adjustment coefficient, in which: The salary increase adjustment coefficient is determined by each region (not exceeding 1.2 for region I; 0.9 for region II; 0.7 for region III and not exceeding 0.5 for region IV) decided by ministries, branches, and provincial People's Committees.
Accordingly, the above salary increase adjustment coefficient is the maximum level, the specific coefficient for each minimum wage region is implemented according to the decision of the ministry, branch, and provincial People's Committee.
The regulation on determining salary costs in Circular No. 17/2019/TT-BLDTBXH is based on the salary coefficient multiplied by the basic salary applied nationwide regardless of region, while businesses operating in different regions (Hanoi, Ho Chi Minh City, Hoa Binh, Lai Chau,...) have quite large differences in living expenses and market salary levels.
Therefore, to ensure harmony between localities and workers' lives, the regulation on additional adjustment coefficients by region is decided by ministries, branches and localities so that the salary calculated in the unit price is consistent with the salary level in the market and the budget capacity of ministries, branches and localities.
In case the locality has issued an additional adjustment coefficient, when changing the minimum wage zone from zone III to zone II, the maximum additional adjustment coefficient is determined according to zone II, however, the specific additional adjustment coefficient is decided by the Provincial People's Committee.
