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Minimum hourly wages in informal sector to be introduced

Thuy Dung
Wednesday,  May 16,2018,14:40 (GMT+7)
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Minimum hourly wages in informal sector to be introduced

Thuy Dung

HANOI – There will be minimum hourly wages to protect laborers working in the informal sector, according to the National Wage Council.

The seventh plenary session of the 12th Party Central Committee concluding last week passed a resolution on wage reform. In his remarks, Party General Secretary Nguyen Phu Trong said that minimum wages are set to protect disadvantaged laborers, serve as a basis for salary negotiations and regulate the labor market.

What needs to be done in the coming time includes improving the policy on minimum monthly wages by region, drafting a regulation on minimum hourly wages and consolidating functions and duties of the National Wage Council, according to the Party chief.

Pham Minh Huan, former Deputy Minister of Labor, Invalids and Social Affairs and former chairman of the National Wage Council, said most countries regulate minimum wages by the hour instead of the month.

In Vietnam, minimum monthly wages by region have been regulated only to protect employees in the formal sector, while around half of Vietnamese laborers do not have employment contracts. Such laborers mainly work for household businesses, do freelance work, work in small and medium economic sectors, and are not covered by the policy on minimum wages by region.

In fact, minimum hourly wages have been stipulated but have not been implemented. Under Article 91 of the 2012 Labor Code, minimum wages are determined by the month, day, or hour and set according to regions and sectors.

According to the International Labor Organization (ILO), in many countries, including China and South Korea, minimum wages are set by both the hour and the month.

Vietnam’s National Wage Council has only decided on minimum monthly wages. Therefore, calculating minimum wages by the hour is necessary.

Besides, the Ministry of Labor, Invalids and Social Affairs needs to take into account various modes of work including part-time jobs and employment in the informal sector, according to the ILO.

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