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Viet Nam
Industrial Park Situation
Text by Saito Hiroshi
The 23rd: Revision of Minimum Wage
On June 30 this year, the Vietnamese government promulgated Decree No. 74/2024/ND-CP regarding minimum wages. It revised the regionally-set minimum wages and increased them by an average of 6.0% per month, effective July 1. This is the first revision since the average 6.0% increase on July 1, 2022, a period of 2 years. The decision followed the proposal made by the National Wage Council, which comprises representatives from the government, employers, and employees in Vietnam.
Region 1 (including Hanoi, Haiphong, Ho Chi Minh City, etc.) was increased by 6.0% from the current level to 4.96 million VND (approx. 31,248 JPY, 1 VND = approx. 0.0063 JPY). Region 2 (including Da Nang, Bac Ninh, etc.) was increased by 6.0% to 4.41 million VND. Region 3 (including Ha Nam, Hai Duong, etc.) was increased by 6.0% to 3.86 million VND. Region 4 (areas outside Regions 1-3) was increased by 6.2% to 3.45 million VND.
The minimum wage per hour was also revised. For Region 1, it was increased by 5.8% to 23,800 VND. For Region 2, it was increased by 6.0% to 21,200 VND. For Region 3, it was increased by 6.3% to 18,600 VND. For Region 4, it was increased by 6.4% to 16,600 VND. (Refer to Table 1 in the attached document.)
Wage increase for Japanese companies, an average of over 5% per year.
According to JETRO’s “Survey on the Actual Condition of Japanese Companies Expanding Overseas”, Japanese companies in Vietnam have been implementing average wage increases of 5-6% annually since 2020. The Vietnamese government has revised the minimum wage 3 times in the 4.5 years from January 2020 to July 2024, with each increase being 5.5-6%. Therefore, the wage revision rate of Japanese companies significantly exceeds the minimum wage increase rate.
Furthermore, according to interviews with multiple Japanese companies, just as before the COVID-19 pandemic, they are implementing wage increases in January, and many companies are forgoing wage increases to match the latest minimum wage revision. Until 2020, the Vietnamese government had been revising the minimum wage at the beginning of the year, and Japanese companies had been adjusting their wages accordingly at the beginning of the year. While the government’s revision timing has become irregular due to the impact of COVID-19, many Japanese companies are maintaining their traditional January revision schedule and are not changing it. Furthermore, if they are already paying above the revised minimum wage, they are not obligated to raise wages.
Minimum wage increase from July 1, 2024
Region | Minimum monthly wage (unit: VND/month) | Minimum hourly wage (unit: VND/hour) |
Region 1 | 4,960,000 | 23,800 |
Region 2 | 4,410,000 | 21,200 |
Region 3 | 3,860,000 | 18,600 |
Region 4 | 3,450,000 | 16,600 |
齊藤公(Saito Hiroshi)
Business Advisor
G.A. Consultants Vietnam Co., Ltd
After graduating from university, he joined a PHP research institute and served as the head of the New York office. He then worked on the “Nagoya Port Redevelopment Project” at a subsidiary of the Chubu Nippon Broadcasting (CBC) company. He later shifted his base to Asia, where he was involved in the launch of “FM96.3” in Singapore, and the creation of “Hello Vietnam” and “Invest Asia” magazines in Vietnam. He then joined BW Industrial Development JSC, Vietnam’s largest rental factory development company, where he was responsible for attracting Japanese manufacturing companies. Currently, he is active as a consultant for the entry of Japanese companies at “G.A. Consultants”, one of the longest-standing Japanese HR consulting firms in Vietnam.
