Vietnam Proposes Minimum Wage Hike from January 1, 2027

The government of the Socialist Republic of Vietnam has proposed an increase in the regional minimum wage, effective January 1, 2027, aiming to ensure a minimum standard of living for workers and maintain a balance of interests between employers and employees. According to the proposal, the monthly minimum wage in Region I will rise from VND 5.31 million to VND 5.7 million, an increase of VND 390,000. In Region II, it will increase from VND 4.73 million to VND 5.08 million, up VND 350,000. Region III will see a rise from VND 4.14 million to VND 4.45 million, an increase of VND 310,000. Region IV's wage will increase from VND 3.7 million to VND 4.04 million, up VND 340,000. This translates to a monthly increase of between VND 310,000 (approximately US$11.81) and VND 390,000, depending on the region. The classification of localities into Regions I, II, III, and IV is specified in the Appendix to Government Decree No. 293/2025/ND-CP. On July 16, Vietnam's National Wage Council reached a consensus on raising the regional minimum wage by an average of 7.8 percent from January 1, 2027, following its second round of negotiations on the annual wage adjustment. Previously, from January 1, 2026, the regional minimum wage increased by VND 350,000-VND 500,000 (approximately US$13.34-19.06) per month from the current levels, depending on each region. The monthly minimum wage for Regions 1, 2, 3, and 4 was VND 5.31 million, VND 4.73 million, VND 4.14 million, and VND 3.7 million, respectively. This minimum wage hike is expected to help maintain workers' purchasing power and stimulate domestic consumption, while balancing economic growth with inflation in Vietnam. The impact of rising labor costs on corporate profits, particularly in manufacturing and export-oriented industries, will also be closely watched.