The regional minimum wage attaches to the locality where the employee works. When provinces merge and the district tier is abolished, the list of localities for each wage region is redrawn on the new administrative map — a factory can find its locality “changing region” although the plant never moved. This article answers the four questions FDI employers ask most: which region rate applies in a merged locality, whether pay can be cut when the new region is lower, how to adjust the wage scale, and whether the social insurance contribution base moves with it.
Legal Basis
- Decree 293/2025/ND-CP prescribing minimum wages for employees under labour contracts applicable from 2026: Region I VND 5.31 million per month, Region II VND 4.73 million, Region III VND 4.14 million, Region IV VND 3.70 million; the list of applicable localities is issued on the post-restructuring administrative map.
- Labour Code 45/2019/QH14: wages are as agreed in the labour contract; the employer may not unilaterally reduce an employee agreed wage.
- Resolution 202/2025/QH15 dated 12 June 2025 — the restructuring that triggers the redetermination of minimum wage localities.
- Law on Social Insurance 41/2024/QH15 (effective 1 July 2025): the wage used as the compulsory social insurance contribution base for salaried employees is determined by the employer within the prescribed framework.
- The enterprise wage regulations and wage scale: whenever the regional minimum wage changes, the enterprise must review the scale so that no grade used for the simplest jobs at a locality sits below that locality minimum.
Analysis in Practice
In principle, the regional minimum wage applies by the locality where the employee works, identified in the list of localities issued with the minimum wage decree. After the restructuring, that list is reissued by the new commune-level units; the region for a given plant is therefore looked up by its current ward or commune, not by the former district. An enterprise with several sites in different localities applies the rate site by site, not one company-wide rate. Note that Decree 293/2025/ND-CP applies from 2026 with four higher regional levels; the enterprise should budget for both changes at once — the level increase and the locality list redraw — when planning 2026 personnel costs.
The most sensitive question is what happens when a merged locality is classified into a lower region than before: may the employer cut the pay of employees currently earning more? The answer is no, for two layers of reasons. First, the regional minimum wage is only a statutory floor; the employee actual wage is set by agreement in the labour contract and the wage regulations, and the Labour Code does not allow the employer to cut an agreed wage unilaterally. Second, the minimum wage only obliges the employer to raise pay when current pay is below the new floor; it creates no right to lower pay when the new floor is lower than current pay. Changing the actual wage requires negotiation and the employee consent, recorded in a contract addendum.
Internally, when the applicable rate changes, the enterprise reviews its wage scale: no grade used as the contracting basis for the simplest jobs at a locality may sit below that locality regional minimum. The enterprise adjusts the scale by a decision of the authorised representative, sends the scale to the provincial labour authority as required for wage scales, and notifies employees and the workforce. In parallel, it signs wage-increase addenda for employees below the new floor — a mandatory favourable change that does not require renegotiating other terms.
On social insurance: the compulsory contribution base follows the monthly wage under Law on Social Insurance 41/2024/QH15 and its guidance, and is not automatically the same as the regional minimum wage. When the enterprise raises pay for the group below the new floor, that group contribution base rises correspondingly because the wage used as the base has changed. Conversely, if a locality moves to a lower region but agreed wages stay unchanged, the contribution base does not fall with it — the base tracks the agreed actual wage, not the regional floor. The enterprise should review insurance filings together with the wage scale adjustment to avoid mismatches among contracts, payroll and insurance declarations.
Recommended Actions
- Look up the minimum-wage locality list by the current ward or commune of each work site and reconcile it with the region rate currently applied at each site.
- Reconcile all labour contracts and the wage scale against the new regional floors from 2026; list every employee who must receive an increase to reach the floor.
- Issue the wage scale adjustment decision, sign increase addenda for the affected group, and notify the labour authority and the workforce as required.
- Synchronise the social insurance contribution base for the adjusted group in the first insurance filing after the addenda take effect.
Frequently Asked Questions
Do workers in a merged locality follow the minimum wage region of the old or the new locality?
The new locality. The list of localities issued with Decree 293/2025/ND-CP is drawn on the post-restructuring administrative map, looked up by the ward or commune where the employee works. An enterprise with several sites applies the rate site by site. The immediate task is to re-look-up each site in the new list, because the same plant can change region when the list is redrawn even though its physical location is unchanged.
If the new regional minimum is lower than current pay, may the enterprise reduce wages?
No. The regional minimum wage is a floor: it only obliges the enterprise to raise pay that sits below it, and it creates no right to reduce agreed wages. An employee wage is established by the labour contract, and Labour Code 45/2019/QH14 does not permit the employer to cut it unilaterally. Any reduction requires negotiation, the employee consent and a contract addendum — in practice hard to obtain and carrying dispute risk.
How must the enterprise adjust its wage scale and notify employees?
Review the wage scale so no grade is below the regional minimum of the work locality; issue the scale adjustment decision; sign wage-increase addenda with employees below the new floor; send the scale to the provincial labour authority as required and notify employees publicly. These steps should be completed before the first payroll applying the new rate, to avoid back-payment of differences and wage-related penalties.
Does the social insurance contribution base change with the new regional minimum wage?
Not automatically. The compulsory contribution base tracks the wage used as the contribution base under Law on Social Insurance 41/2024/QH15, not the regional floor directly. The base changes only when the agreed wage changes — for example, employees raised to the new floor have their base increased from the adjustment period. If wages stay unchanged although the locality changes region, the contribution base stays unchanged.
This article has been quality-reviewed by the FLAW AI Legal Council