On 28 September 2021, the Ministry of Labour and Vocational Training (“MLVT”) issued Prakas 264 on the Determination of Minimum Wage for Workers in the Garment, Textile, Footwear, Travel Product and Bag Sectors (“Prakas 264”), to set new minimum wage for 2022, which will be effective from 1 January 2022.
Under Prakas 264, workers in the relevant sectors will be entitled to the following new minimum wage:
- For regular workers, USD 194 per month.
- For probationary workers, USD 192 per month.
Prakas 264 also sets the minimum wage for piece rate workers. For such workers, the pay rate is to be determined based on their level of production and, in case such production gives rise to a higher pay rate than the minimum wage, the workers will be entitled to such higher amount. However, if their production gives rise to a pay rate lower than the minimum wage, the employer must adjust the workers’ pay, such that the total pay is at least equal to the minimum wage (USD 194 for regular workers and USD 192 for probationary workers).
Other benefits that such workers have received remain unchanged, such as compensation for transportation or accommodation allowance of USD 7 per month, attendance bonus of USD 10 per month, food allowance of USD 0.5 per day (or one free meal per day) for those who work overtime and seniority bonus from USD 2 to USD 11 per month for those in their second to the eleventh year of work.
Under the Law on Minimum Wage, which was promulgated on 6 July 2018, the key factors in determining the minimum wage include social considerations (such as inflation rates and living expenses); and (2) economic considerations (such as productivity, competition, job market status and profitability of a particular industry). The discussions on the minimum wage are conducted on an annual basis, unless decided otherwise by the National Council on the Minimum Wages, and such minimum wage is determined by a Prakas issued by the MLVT.
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The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.