4-step roadmap to adapt to the new regional minimum wage regulations

On November 10, 2025, the Government officially issued Decree No. 293/2025/NĐ-CP (“Decree 293”), marking a significant shift in social security policy. The average increase of 7.2% in regional minimum wages compared to previous regulations not only changes the figures but also poses challenges in cost management and legal compliance for all enterprises. To be fully prepared when the Decree takes effect on January 1, 2026, employers should promptly conduct a comprehensive review based on the following four key pillars: 

1. Determining geographic position and update wages according to the new regional classification 

Incorrect application of regional minimum wages often leads to administrative penalties or collective labor disputes. Therefore, businesses must carefully compare their operating locations with the Appendix attached to the Decree to accurately determine the “starting line” for employees’ wages, specifically: 

• Region I: VND 5,310,000/month (VND 25,500/hour) 

• Region II: VND 4,730,000/month (VND 22,700/hour) 

• Region III: VND 4,140,000/month (VND 20,000/hour) 

• Region IV: VND 3,700,000/month (VND 17,800/hour) 

In addition, employers should pay special attention to the principles for determining regional minimum wages in specific cases: 

• Case 1: If an enterprise has branches, subsidiaries, or representative offices across multiple regions and provinces, each unit must apply the minimum wage corresponding to its registered location. The Decree does not allow branches or representative offices to apply the minimum wage of the enterprise’s head office. 

• Case 2: For units located in industrial parks, export processing zones, high-tech zones, or concentrated digital technology zones spanning areas with different minimum wages, the highest applicable minimum wage should be prioritized to ensure maximum employee benefits in line with the Decree’s spirit. 

• Case 3: If an enterprise operates in an area undergoing a name change or administrative division, the previous minimum wage remains applicable until the Government issues new regulations. 

2. Reviewing labor-related legal documents

Decree 293 clearly stipulates employers’ responsibility to review all existing agreements such as labor contracts, collective bargaining agreements, internal regulations, etc. Key considerations include: 

• Labor Contracts: Verify the basic salary stated in all labor contracts. If the current salary is lower than the new minimum wage, sign an addendum to adjust promptly. 

• Salary Scales and Tables: The increase in minimum wage may narrow or distort the gaps between salary grades. Employers should recalculate to maintain differentiation and motivation. 

• Salary Conversion: For units paying wages by week, day, product, or lump sum, prepare detailed conversion tables to monthly or hourly rates. The total converted wage must never fall below the prescribed regional minimum wage. 

3. Preserving and respecting more favorable agreements 

A common mistake when increasing minimum wages is cutting other benefits to offset costs. However, Decree 293 prohibits eliminating or reducing wage-related entitlements such as overtime pay, night work pay, allowances in kind, and other statutory benefits. 

Enterprises must particularly maintain commitments such as: 

• Wages for skilled workers: Continue ensuring that wages for employees with vocational training remain at least 7% higher than the minimum wage (if previously agreed in labor contracts or collective agreements). 

• Wages for special jobs: Maintain wage rates for hazardous or arduous jobs (at least 5% higher) and for particularly hazardous or arduous jobs (at least 7% higher) compared to normal jobs, based on the new minimum wage. 

Furthermore, any agreed terms in labor contracts, collective agreements, or other lawful arrangements that are more favorable to employees must continue to be honored. 

4. Handle regional reclassification

Certain areas may be reclassified, leading to changes in regional zoning and the corresponding new minimum wage rates. Enterprises should note that if a zoning change results in a new minimum wage rate lower than the rate regulated by the Government as of December 31, 2025, the enterprise must maintain the minimum wage rate applicable on December 31, 2025, for employees recruited on or before that date until new Government regulations are issued. 

Consequently, enterprises must continue to maintain the previous wage levels for employees hired before January 1, 2026. Reducing wages in this scenario may be considered an illegal unilateral amendment to the labor contract. 

Share: