Asia-Pacific employment law bulletin 2023

Vietnam

It has been a relatively quiet year for the employment sector in Vietnam, in terms of both legal and market practice developments. However, there have been [two developments][a development] of note in relation to [minimum wages and] data protection.

Increase of the minimum wages

There are two kinds of minimum wages in Vietnam.

The first type of minimum wage is Regional Minimum Wage used for employees in all non-State enterprises. There are 4 different levels of Regional Minimum Wage in Vietnam applicable to four groups of administrative zones, with the highest level applicable to urban zones in Hanoi and Ho Chi Minh city, and the lowest level applicable to the most rural areas in Vietnam. After a couple of delays since 2019 due to the Covid-19 pandemic, the Government has finally issued a new Decree 65/2022/ND-CP dated 12 June 2022 increasing the Regional Minimum Wage levels from VND 3,070,000 - 4,420,000 (approx. USD 133 - 192) a month to VND 3,250,000 - 4,680,000 (approx. USD 141 - 203) a month, applicable from 1 July 2022.

The second type of minimum wage is the Common Minimum Wage which is used to calculate salaries for employees working in State sector but is also used to calculate threshold for mandatory social insurance contribution for all enterprises (i.e., the maximum contribution is 20 times the minimum wage). Like for the Regional Minimum Wage, after discussions, the National Assembly decided to increase Common Minimum Wage in Vietnam from VND 1,490,000 (approx. USD 65) a month to VND 1,800,000 (approx. USD 78) a month as of 1 July 2023. This is the largest Common Minimum Wage increase in Vietnam since 2004. This increase will need to be formalised by the Government’s decree which is expected to be issued soon.

Draft decree on personal data protection

As mentioned in our 2022 bulletin, the Government of Vietnam has been in the process of drafting a decree on personal data protection which is the first ever overarching regulation on personal data in Vietnam. Unfortunately, after rounds of internal discussions and collection of public opinions, the Government has not been able to officially issue such regulations. It is still uncertain on when such regulations will be finally issued.

Based on the latest draft, this decree would include certain detailed guidance on the forms and substance of “consent” provided by a data subject required for the collection of his or her personal data as well as requirements/conditions for the cross-border transfer of personal data of Vietnamese citizens to foreign countries. As such, it may (once implemented) affect the management of employees and their personal data by multi-national companies in Vietnam.