Question 81. When an Employee signs a LC in which the workplaces are located in many provinces and cities of Vietnam with different area minimum wages, which area minimum wage of which workplace will serve as a basis for determining whether or not the salary paid by the Employer under the LC is higher than the area minimum wage announced by the Government?


Pursuant to the Labour Code, the Employer is obliged to ensure that the salary paid to the Employee must not be lower than the area minimum wage prescribed by the Government. The area minimum wage varies between areas where the Employee actually work. Specifically, Article 4.1 of Decree No. 90/2019/ND-CP provides the principle of applying the area minimum wage, that the the enterprise will apply the area minimum wage where it is located. In cases where the enterprise has units or branches operating in many physical locations with different minimum wage levels, their branches or units will apply the area minimum wage prescribed for the physical locations where they operate.

In fact, the Employer often records many workplaces for the Employee in the LC to ensure timely response to the business demands from time to time. In this case, which area minimum wage the Employer will apply to determine the Employee’ salary? Pursuant to Article 3.3 (b) of Decree 10/2020/ND-CP, if the Employee is required to work in many different places, the LC must clearly state all workplaces of the Employee. Pursuant to this regulation, the Employer is obliged to identify the main workplace of the Employee in addition to other workplaces as assigned by the Employer. However, there are no clear guidelines on which area minimum wage will apply in the above cases.

However, with caution that the Labour Code acts in the spirit of prioritising the interests of the Employee, the Employer may be required to apply the area minimum wage of the main workplace of the Employee, where the area minimum wage is considered highest to ensure the Employee has more favourable benefits. In addition, through consultation with DOLISA of Ho Chi Minh City, its experts agreed with the view that the best interests of the Employee should be secured. However, from the perspective of the Employer, the application of the said principles might lead to a significant increase in salary costs for businesses. Therefore, in order to ensure their interests, the Employer may seek written advice from the competent local labour authority to have a firm basis prior to implementation.