The Vietnam General Confederation of Trade Unions (VGCL) proposed to increase regional basic wages by 7-8% starting from July 1, 2022, but many companies firmly opposed it for the following reasons:
Bach Thang Long, deputy general manager of Vietnam Garment 10 Corp., said that the new crown epidemic broke out again in the first quarter of 2022, which has already affected the company. The financial impact will be serious. If the basic salary is raised at this time, it will only worsen the situation and increase the financial pressure on small enterprises. It is recommended that the increase in regional basic salary be postponed until 2023, and the increase will only cover inflation. to leave room for business recovery.
Huynh Thi Hong Cuc, chairman of the union of Nha Be Gartment Corp, said that the increase in basic wages only applies to those with wages below the minimum wage workers, but if the salary increase is only for a specific group, it will definitely cause dissatisfaction among other employees and force the company to increase employee salaries across the board. Therefore, it is estimated that if the basic salary is increased by 5%, the company’s labor costs will increase by 10%, thus increasing wage costs by hundreds of billions of dong (approximately millions of dollars).
Le Nhat Truong, chairman of the labor union of Pou Sung Vietnam Ltd., said the company also faces the same problem, even though the basic salary is not mandatory It applies to workers whose wages are higher than the basic wage. However, when the basic wage increases, if other workers do not receive a salary increase, it will definitely cause dissatisfaction. Therefore, when the Vietnamese government announces an increase in the regional minimum wage in 2020, the company must increase the wages of 22,000 workers, even though no worker’s salary is lower than the regional basic wage. Chairman Lai is worried that if the regional basic wage is raised by 7% this year, the company’s salary expenses will surge by 180 billion VND (approximately US$7.82 million).
Hoang Quang Phong, vice chairman of the Vietnam Chamber of Commerce and Industry (VCCI), believes that due to the impact of the epidemic, the basic regional policies have not been adjusted in the past two years. In terms of wages, it is necessary to increase regional basic wages, but the extent of the increase needs further discussion to avoid having too great an impact on corporate finances. Vice Chairman Huang continued that since companies usually calculate costs based on wages at the beginning of the year, it is not appropriate to increase regional basic wages in the middle of the year, and it is recommended to postpone the increase in regional basic wages.
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