The Ministry of Labour and Vocational Training (“MLVT”) issued Prakas No. 303 on the Determination of Minimum Wage for Employees in Textile, Garment and Footwear Sectors, dated 10 September 2020 (“Prakas 303”), to set new minimum wage for 2021.
Under Prakas 303, effective 1 January 2021, workers in the textile, garment and footwear sector will be entitled to the following minimum wage:
- For regular workers, USD 192 per month.
- For probationary workers, USD 187 per month.
Other benefits to which such workers will be entitled include 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 workers who have worked from the second to the eleventh year.
Prakas 303 also sets the minimum wage for piece rate workers. For such workers, the pay rate is to be determined by their production and, in case such production brings higher pay rate than the minimum wage, the workers will be entitled to this higher amount. However, in case that the production brings lower pay rate than the minimum wage, the employer must add to the workers’ pay, such that the total pay is at least equal to the minimum wage amounts discussed above (USD 192 for regular workers and USD 187 for probationary workers).
It should be noted that under the Law on Minimum Wage, which was promulgated on 06 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 situation.
