After two years of maintaining the minimum wage as prescribed in Decree 38/2022/ND-CP ("Decree 38"), on June 30, 2024, the Government officially issued Decree 74/2024/ND-CP ("Decree 74") replacing Decree 38 on the monthly minimum wage and hourly minimum wage applicable to employees working under labor contracts.
1. Clearly guide cases in which employers pay benefits higher than prescribed by law to employees
Compared to Decree 38 (which is only stipulated in principle), Decree 74 clearly guides the approval of cases where the employer has paid benefits higher than the law to the employee compared to the regional minimum wage and is not allowed to deduct the employee's benefits due to the change in the regional minimum wage such as:
- the salary payment regime for employees doing jobs or titles requiring vocational study and training is at least 7% higher than the minimum wage;
- the salary payment regime for employees doing jobs or titles with heavy, hazardous and dangerous working conditions is higher than at least 5%;
- jobs or titles with particularly heavy, hazardous or dangerous working conditions that are at least 7% higher than the salary of jobs or titles of equivalent complexity, working under normal working conditions.
2. Raising the regional minimum wage
Decree 74 stipulates that the regional minimum wage is higher than Decree 38 as follows:
|
Region |
Monthly minimum wage |
|
|
Decree 74 |
Decree 38 |
|
|
I |
4,960,000 |
4,680,000 |
|
II |
4,410,000 |
4,160,000 |
|
III |
3,860,000 |
3,640,000 |
|
IV |
3,450,000 |
3,250,000 |
Accordingly, the increase in the regional minimum wage may lead to employment arising, changing or terminating the financial obligations of enterprises to employees (or other obligations) according to regulations that apply the basis for calculating the regional minimum wage (such as determining the obligation to pay unemployment insurance, obligation to compensate for non-contractual damage, alimony obligation...)
Therefore, businesses, organizations and individuals need to pay attention to this issue to calculate and adjust the method of determining financial obligations in accordance with the law from July 1, 2024.
Decree 74 takes effect from July 1, 2024./.
Comment: