MINIMUM WAGE INCREASE EFFECTIVE 01 JANUARY 2026: MANDATORY ADJUSTMENTS FOR EMPLOYERS

Pursuant to Decree No. 293/2025/ND-CP, effective from 01 January 2026, the regional minimum wage will officially increase. This change not only affects salary levels but also triggers additional costs and legal obligations that employers are required to review and adjust in a timely manner in order to avoid violations of labor regulations.

1. Employers are required to increase wages

Employers must increase wages for employees who are currently paid based on the regional minimum wage levels. The wage paid to an employee for a specific job or position must not be lower than the newly prescribed regional minimum wage.

2. Employers may not “offset” the increase by cutting benefits

Employers are not permitted to eliminate or reduce existing benefit schemes in order to offset the increase in the minimum wage. In particular, the following items must not be reduced when making adjustments:

• Overtime pay and nightshift pay
• In-kind benefits or allowances
• Other allowances and benefits prescribed under labor law
• Agreements on wages higher than the minimum level (e.g. for skilled workers or employees engaged in heavy, hazardous or dangerous work), which must continue to be applied unless otherwise agreed.

3. Employer costs that will increase

When the regional minimum wage increases, employers must adjust the following related costs:

• Wages used as the basis for compulsory social insurance contributions must not be lower than the regional minimum wage. Employers must increase social insurance contributions if they are currently paying at the regional minimum level.
• Employers contribute 2% in trade union contribution based on the salary fund for social insurance contributions. When the contribution base increases, the trade union contribution will increase accordingly.

4. Other related wage regimes to be reviewed

• Wages during work suspension must not be lower than the new minimum wage.
• Wages when an employee is temporarily transferred to another job:

- During the first 30 days: the current wage remains unchanged.

- Thereafter: at least 85% of the previous wage and not lower than the new minimum wage.

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