Enterprises will not allowed to eliminate or reduce other wage-related benefits for employees, such as overtime pay and in-kind allowances, while implementating a new 7.8% minimum wage increase slated to take effect in 2027, according to the Ministry of Home Affairs (MHA).
Under a draft decree regulating new minimum wage levels for employees working under employment contracts, the MHA continues to call on employers to comply with wage payment regulations when adopting the new regional minimum wage rates, expected to be implemented starting in early 2027.
The core provision of the draft decree is an average 7.8% upward adjustment to the minimum wage compared to current rates, taking effect on January 1, 2027, pursuant to recommendations submitted to the Government by the National Wage Council.
The proposed monthly minimum wages across four designated regions are as follows: Region I (VND5.7 million or $220/month); Region II (VND5.08 million - $196/month); Region III (VND4.45 million - $171.5/month); and Region IV (VND4.04 million - $155.7/month).
The monthly minimum wage serves as the statutory baseline for negotiating and paying monthly salaries. It guarantees that the compensation for an employee's job title or duties—assuming they fulfill normal monthly working hours and meet assigned labor quotas or agreed-upon deliverables—cannot fall below this threshold.
In tandem with the monthly rates, hourly minimum wages across the four regions are outlined as follows: Region I (VND27,400 - $1.05/hour); Region II (VND24,400 – 94 US cents/hour); Region III (VND21,400 – 82 US cents/hour); and Region IV (VND19,400 – 74 US cents/hour).
Hourly minimum wage rates continue to be determined using the equivalent conversion formula based on the monthly minimum wage and standard working hours under the Labor Code. This methodology was recommended to Vietnam by International Labour Organization (ILO) experts and has been utilized to compute hourly baselines since 2022.
In addition to fulfilling the wage adjustment obligations, the draft decree requires employers to review agreements in labor contracts, collective bargaining agreements, and internal company bylaws to make necessary revisions and adjustments.
Crucially, enterprises are strictly prohibited from eliminating or reducing allowances and compensation for overtime work, night shifts, in-kind allowances, and other entitlements established under labor legislation.
Any existing commitments and stipulations in labor contracts, collective bargaining agreements, or other legitimate pacts that offer more favorable terms to employees than those specified in this decree will remain in effect, unless all parties mutually agree otherwise.
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