Vietnam’s National Assembly Approves 2012 Salary Increases

November 15, 2011 Posted by Vietnam Briefing Reading Time: 2 minutes

Nov. 15 – On November 10, the Vietnamese National Assembly approved VND59.3 trillion (US$2.83 billion) in salary increases starting from May 1, 2012.

Under the recent resolution, minimum salaries for state employees will be increased to VND1.05 million (US$51) per month. The current minimum wage for state employees is VND830,000 (US$40), established by Decree No. 22/2011/ND-CP dated April 04, 2011 with an implementation date of May 1, 2011 and it is still in force.

RELATED: Dezan Shira & Associates’ Payroll and Human Resources Services

Additionally, the same rise will be also applied to social welfare beneficiaries and pensions for people who made a contribution to the country’s revolutionary struggles. State employees will also receive a 25 percent increase in additional work benefits from May 1, 2012.

This resolution comes along the recent salary increases for both domestic and foreign-invested enterprises that have been “implemented ahead of schedule in order to help laborers cope with sky-rocketing prices and inflation,” reported Tong Thi Minh, head of the Ministry of Labor, Invalids and Social Affairs’ Labor and Wage Department.

According to Nguyen Minh Phong, Head of Department for Economic Development Studies Hanoi, the minimum wage increase is indispensable under the circumstances.

“[However] the Government’s decision to raise the monthly minimum wages has two sides,” Mr. Phong carried on. “The positive side is that it helps to line workers’ pockets, which have been emptied by inflation. It also helps improve their living conditions and (to some extent) increase the demand for goods, which will be a good driving force for production. However, the negative side is that it will increase enterprises’ production costs, which will probably lead to price hikes and might affect CPI in the future, in addition to putting pressure on the Government’s effort to curb inflation.”

Dezan Shira & Associates is boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in Vietnam. To contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download the firm’s brochure here.