From 1 January 2027, the monthly and hourly minimum wages applicable to employees working under labour contracts will increase pursuant to the Government’s Decree No. 399/2026/ND-CP dated 2 November 2026. Notably, the Decree not only adjusts the minimum wage rates across all four regions but also updates the list of applicable geographical areas and changes the transitional arrangements relating to adjustments to administrative boundaries.
In this article, MLT Lawyers examines the key provisions of Decree No. 399/2026/ND-CP and highlights the legal considerations that employers should take into account when reviewing their remuneration policies and ensuring compliance from the beginning of 2027.
- Decree No. 399/2026/ND-CP on Regional Minimum Wage Increases Effective from 1 January 2027
On 2 November 2026, the Government promulgated Decree No. 399/2026/ND-CP prescribing the minimum wage rates applicable to employees working under labour contracts.
The Decree takes effect on 1 January 2027 and replaces Decree No. 293/2025/ND-CP dated 10 November 2025.
The applicable entities include:
- Employees working under labour contracts in accordance with the Labour Code;
- Employers, including enterprises, agencies, organisations, cooperatives, households and individuals that employ or engage employees;
- Other relevant agencies, organisations and individuals involved in the implementation of minimum wage regulations.
Accordingly, enterprises and organisations employing workers under labour contracts should proactively update their policies to ensure that their salary arrangements comply with the new minimum wage rates applicable from 2027.
- Monthly and Hourly Minimum Wage Rates Increased Across All Four Regions
One of the most significant changes introduced by Decree No. 399/2026/ND-CP is the increase in both monthly and hourly minimum wage rates across all four regions.
The new minimum wage rates applicable from 1 January 2027 are as follows:
| Region | Monthly minimum wage (VND/month) | Hourly minimum wage (VND/hour) |
| Region I | 5,700,000 | 27,400 |
| Region II | 5,080,000 | 24,400 |
| Region III | 4,450,000 | 21,400 |
| Region IV | 4,040,000 | 19,400 |
Compared with the current minimum wage rates under Decree No. 293/2025/ND-CP, the monthly minimum wage increases are as follows:
| Region | Previous monthly minimum wage | New monthly minimum wage | Increase |
| Region I | 5,310,000 | 5,700,000 | 390,000 |
| Region II | 4,730,000 | 5,080,000 | 350,000 |
| Region III | 4,140,000 | 4,450,000 | 310,000 |
| Region IV | 3,700,000 | 4,040,000 | 340,000 |
Unit: VND/month.
Accordingly, the monthly minimum wage increases by between VND 310,000 and VND 390,000, depending on the applicable region.
For hourly-paid employees, the new minimum rates are VND 27,400 per hour in Region I, VND 24,400 per hour in Region II, VND 21,400 per hour in Region III and VND 19,400 per hour in Region IV.
Important note: The minimum wage is the lowest wage that an employer must pay an employee for the relevant job or position under normal working conditions, provided that the employee works the normal working hours and fulfils the agreed work norms or duties. It is not a maximum wage or a fixed salary that must be uniformly applied to all employees.
- Updated List of Applicable Regional Minimum Wage Areas Across 34 Provinces and Centrally Governed Cities
In addition to adjusting the minimum wage rates, Decree No. 399/2026/ND-CP introduces an updated Appendix listing the geographical areas subject to the four regional minimum wage levels, reflecting the current administrative structure.
The list has been updated to correspond to commune-level administrative units, including communes, wards and special administrative zones across 34 provinces and centrally governed cities.
This update is particularly important for enterprises operating multiple factories, branches, offices or business locations in different provinces and cities.
The Decree sets out several important principles for determining the applicable regional minimum wage:
First, the applicable rate is determined by the location where the employer operates.
An employer operating in a particular region must apply the corresponding regional minimum wage applicable to that area.
Second, enterprises operating multiple branches or units in different regions.
Where an enterprise has units or branches operating in geographical areas subject to different minimum wage rates, each unit or branch must apply the minimum wage corresponding to its respective operating location.
Third, industrial parks and other functional zones spanning multiple geographical areas with different minimum wage rates.
Where an employer operates in an industrial park, export processing zone, hi-tech park, concentrated digital technology zone, special economic zone, free trade zone or high-tech agricultural zone located across areas subject to different minimum wage rates, the highest applicable regional minimum wage must be applied.
Fourth, cases involving changes to geographical areas due to renaming, division or establishment of new administrative units.
The Decree provides rules for determining the applicable minimum wage in cases where geographical areas are renamed, divided or newly established from one or more areas subject to different minimum wage rates.
Notably, where a new geographical area is established from one or more areas with different minimum wage levels, the highest applicable minimum wage must be applied until the Government issues further regulations.
Therefore, employers should not determine the applicable minimum wage solely based on the name of the province, city or registered head office address. Instead, they should verify the actual operating address of each business location against the Appendix to the Decree.
- Removal of the Transitional Provision Preserving Previous Minimum Wage Rates Following Changes to Geographical Areas
One issue that employers should pay particular attention to is the change to the transitional arrangements governing minimum wage rates following the reorganisation or adjustment of administrative boundaries.
Under the previous transitional provision in Decree No. 293/2025/ND-CP, employers were required to continue applying the minimum wage rates in effect as at 31 December 2025 to certain employees recruited before or on that date, where changes to geographical classifications resulted in a lower applicable minimum wage.
However, Decree No. 399/2026/ND-CP no longer retains an equivalent transitional provision.
Instead, the Decree establishes principles for determining minimum wage rates based on the updated geographical areas. In particular, where a new area is established from one or more areas subject to different minimum wage rates, the highest applicable rate must be applied until the Government provides otherwise.
This means that employers must review their operating locations and the corresponding minimum wage rates rather than automatically continuing to apply the previous wage-preservation mechanism.
Important note: The removal of the transitional provision does not mean that employers are automatically entitled to reduce salaries already agreed upon or paid to employees. Employers must continue to honour lawful agreements that are more favourable to employees and comply with the labour law provisions protecting employees’ remuneration.
- What Should Employers Review Before 1 January 2027?
To ensure compliance with Decree No. 399/2026/ND-CP, employers should proactively undertake the following actions:
5.1. Review Existing Salary Levels
Review the salaries specified for each job or position in employment contracts and compare them against the new minimum wage applicable to the relevant operating location.
For employees paid on a weekly, daily, piece-rate or lump-sum basis, employers should also verify the converted monthly or hourly wage to ensure that it is not lower than the corresponding minimum wage.
5.2. Review the Operating Locations of the Enterprise and Its Branches
Compare the addresses of factories, offices, branches and other operating locations against the Appendix listing the applicable geographical areas under Decree No. 399/2026/ND-CP.
This is particularly important for enterprises with multiple production facilities or operations in areas affected by administrative restructuring.
5.3. Review Employment Contracts and Collective Labour Agreements
Review provisions relating to salaries, allowances and other additional payments in employment contracts, collective labour agreements, as well as relevant internal policies and regulations.
Where an employee’s salary for the relevant job or position is lower than the new applicable minimum wage, the employer must make the necessary adjustments.
5.4. Review Payroll Budgets and Personnel Costs
The increase in minimum wage rates may affect payroll budgets, workforce planning and overall operating costs.
Accordingly, the Human Resources and Finance Departments should coordinate to assess the financial impact of the adjustments, prepare the necessary budgets and establish an implementation plan effective from 1 January 2027.
5.5. Do Not Unilaterally Reduce Existing Salary Benefits and Agreed Entitlements
Under Clause 3, Article 5 of Decree No. 399/2026/ND-CP, employers are responsible for reviewing provisions in employment contracts, collective labour agreements and the enterprise’s internal policies and regulations to make appropriate amendments and supplements.
In particular, employers must not abolish or reduce salary-related entitlements applicable to overtime work, night work, in-kind allowances and other benefits as prescribed by labour laws.
Lawful agreements that provide more favourable benefits to employees than those prescribed under the Decree must also continue to be implemented, unless otherwise agreed by the parties.
- Frequently Asked Questions About the 2027 Regional Minimum Wage
Question 1: When does Decree No. 399/2026/ND-CP take effect?
Answer: Decree No. 399/2026/ND-CP takes effect on 1 January 2027 and replaces Decree No. 293/2025/ND-CP.
Question 2: What is the Region I minimum wage from 2027?
Answer: From 1 January 2027, the monthly minimum wage in Region I is VND 5,700,000 per month, and the hourly minimum wage is VND 27,400 per hour.
Question 3: Which minimum wage rate applies to an enterprise with branches in different regions?
Answer: Under Decree No. 399/2026/ND-CP, where an enterprise has units or branches operating in geographical areas subject to different minimum wage rates, each unit or branch must apply the minimum wage corresponding to its respective operating location.
Question 4: Are employers required to increase the salaries of all employees from 1 January 2027?
Answer: Not all employees are automatically entitled to a salary increase at the same rate. The obligation to adjust salaries arises where the salary for the relevant job or position needs to be increased to meet the newly applicable minimum wage. For employees already receiving salaries above the minimum wage, any further adjustment will also depend on the employment contract, collective labour agreement and relevant internal policies.
Question 5: Can an employer reduce an employee’s salary if the new minimum wage applicable to the geographical area is lower?
Answer: An employer cannot automatically reduce an employee’s agreed salary solely because the applicable regional minimum wage has changed. The employer must continue to comply with lawful agreements with employees and the applicable labour law provisions governing remuneration.
- Conclusion and Recommendations from MLT Lawyers
Decree No. 399/2026/ND-CP is an important regulatory development concerning employee remuneration that employers and employees should familiarise themselves with before 1 January 2027.
The changes to monthly and hourly minimum wage rates, the list of applicable geographical areas and the principles for determining minimum wages following administrative restructuring may directly affect enterprises’ payroll policies and personnel costs.
MLT Lawyers recommends that employers should not wait until the Decree officially takes effect before reviewing their compliance status. Proactively reviewing employment contracts, collective labour agreements, salary policies and operating locations will help enterprises minimise legal risks, safeguard employee entitlements and maintain stable human resources management.
MLT Lawyers provides legal advisory services on labour and employment matters, including employment contract reviews, the development and revision of salary policies, internal labour regulations and corporate labour law compliance.
For legal advice or assistance in reviewing payroll policies in light of the new regulations, please contact MLT Lawyers.
LEGAL REFERENCES
- Labour Code No. 45/2019/QH14.
- Government Decree No. 399/2026/ND-CP dated 2 November 2026 prescribing the minimum wage rates applicable to employees working under labour contracts.
- Government Decree No. 293/2025/ND-CP dated 10 November 2025 prescribing the minimum wage rates applicable to employees working under labour contracts (effective until 31 December 2026)
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