Mr. Tong Van Lai, Deputy Director of the Department of Labor Relations and Wages (Ministry of Labor, Invalids and Social Affairs), said: FGL Garment Co., Ltd. 2, address in Bien Hoa Industrial Park 1, Bien Hoa City, Dong Nai province has a written request to consider the effective time of Decree 74/2024/ND-CP dated June 30, 2024 of the Government regulating the minimum wage for employees working under labor contracts.
The garment industry employs a large number of workers. Photo: HT
According to the company’s reflection, the decree on increasing the regional minimum wage took effect on June 30, 2024 and was applied immediately from July 1, 2024, causing the company to struggle to keep up with the new regulations.
In addition, the company has more than 11,000 employees, nearly 4,500 of whom are in Tan Phu and Cam My districts. However, the sudden adjustment of these two localities from region III to region II, which was not included in the initial draft, has caused difficulties for the company.
In addition, the company faces difficulties in terms of additional costs, as they were not included in the budget forecast beforehand. Enterprises have accepted orders with costs before adjustment, so this change affects production costs and signed orders.
Therefore, enterprises proposed that the competent authorities guide the regions that have moved from region III to region II to postpone the time of applying the minimum wage by month to the beginning of 2025, instead of from July 2024.
Responding to this content, Mr. Tong Van Lai said that in fact, the adjustment of the regional minimum wage is not new content and is carried out annually. Only in some years, due to the impact of the COVID-19 pandemic and social and economic difficulties, this has been delayed.
Decree 74/2024/ND-CP was issued in late June, and up to now, enterprises have implemented it for 1 month, and most of them do not have problems.
In addition to adjusting the general increase of 6%, corresponding to an increase from 200,000 to 280,000 VND depending on the wage region, the Decree also re-divides some localities of application, to suit the actual situation, from region IV to region III, region III to region II and from region II to region I.
The increase in the regional minimum wage will affect enterprises in two aspects. One is the adjustment level, and the other is the division of regions. Thus, it affects the company’s costs.
“After Decree 74/CP was issued, up to now, we have only received one recommendation from the enterprise. Since the first quarter of 2024, the National Wage Council has reached a high consensus, recommending a minimum wage increase option for the Government to decide. This is also publicized and transparent. Normally, when the Council makes a recommendation, it is considered an option for businesses to prepare conditions and resources to implement,” said Mr. Tong Van Lai.
Therefore, the fact that the enterprise reflects the urgent time and does not have such a long preparation is not convincing. On the other hand, before the Council’s recommendation, at the beginning of the year, the Ministry of Labor, Invalids and Social Affairs always has documents sent to 63 provinces and cities to direct relevant units to review and evaluate the current status of regional division.
The minimum wage is recommended by the Council, but the division of regions is done by state management agencies at the local level. The Ministry has also assigned the provincial Department of Labor, Invalids and Social Affairs to coordinate with the provincial Labor Confederation, the Chamber of Commerce and Industry, and the Industrial Park Management Board to survey and take opinions. before submitting to the People’s Committee of the province.
Thus, the plan to adjust the division of regions sent up has been agreed upon by the Provincial People’s Committee between the parties. The Ministry has sent a document to the People’s Committee of Dong Nai province and has reviewed it according to the right procedure.
“The division of regions is an agreement at the local level. The Provincial People’s Committee directly proposes to the Ministry of Labor, War Invalids and Social Affairs. On that basis, the Ministry has synthesized the original state to build a plan to report to the Government. The Department of Labor Relations and Wages has officially written to the enterprise to answer questions. In which, it is proposed that the company needs to implement in accordance with the issued regulations.”
