Category Archives: Migration Policy in Vietnam

Vietnam approves minimum-wage hike of 15 percent in 2015

Prime Minister Nguyen Tan Dung has given the go-ahead to the increase in Vietnam’s minimum monthly salary by between VND250,000-VND400,000 (US$12-$19) starting next year.
Under a government decree that takes effect January 1, 2015, Vietnam will raise the wage floor to VND2.15 million–VND3.1 million ($101.4-$146.2), depending on the location. In August, the National Wage Council, which advises the government on wage policies, proposed that the minimum wages be raised to VND2.42 million-VND3.1million.
Accordingly, in Region I, including urban Hanoi, Hai Phong, Ho Chi Minh City, the minimum wage will be VND3.1 million, or VND400,000 higher than the current threshold.
VND400,000 is the maximum possible increase, exceeding last year’s highest recommended increase of VND350,000, according to labor officials.
In Region Two, including rural Ha Noi, HCMC, Hai Phong plus the capital cities of Hai Duong, Hung Yen, Bac Ninh, Thai Nguyen, Nha Trang, Can Tho and Rach Gia, the minimum wage will be VND2.75 million.
In Region Three, which entails capital cities and the main districts in the provinces of Hai Duong, Vinh Phuc, Phu Tho, Bac Ninh, Nam Dinh, Phu Yen, Dong Nai and Tien Giang, Ben Tre, the monthly salary will be VND2.4 million.
In Region Four, the least developed areas in Vietnam, the basis salary will be VND2.15 million.
Starting early this year, the minimum wage reached between VND1.9-2.7 million (US$90-128) a month. The variance was determined by the cost of living in a given worker’s location.
Vietnam’s per capita GDP climbed to US$1,890 last year, up 8 percent from 2012, according to the World Bank.
According to a recent survey by the Vietnam Worker and Trade Unions Institute, actual minimum wages range between VND2.5-VND4 million a month, depending on location.
However, even that salary only covers 69-77 percent of a Vietnamese person’s basic living costs, according to the survey, which polled 1,500 workers in 12 cities and provinces during the first half of this year.
Up to 13 percent of workers said their salaries do not cover their basic living costs, 25 percent said they had to spend carefully and 50 percent said their salary only affords the most basic standard of living.
Vietnam’s economy, which recorded growth of 5.42 percent last year, is expected to expand 5.8 percent in 2014, in line with a government target. The Southeast Asian country is expected to keep annual inflation at a rate below 5 percent, or about 2 percentage points below a government target.
Both foreign and local companies often lament that minimum wage increases will hit their operations. They warn any further wage hikes will cause grave consequences on Vietnam’s competitiveness in the near term, adding it needs to be considered “very carefully”.
Analysts acknowledge that Vietnam’s abundance of cheap labor has played an increasingly pivotal role in wooing foreign firms looking to set up overseas manufacturing operations in a country with a population of 90 million. This edge appears to be working well in the context of rising labor costs in China and political mayhem in Thailand.
But the analysts also say the bottom line is that competing in terms of low wages is a risky business and should only be considered an edge in the short-term for a developing country like Vietnam. The biggest challenge for the country is to ensure that the quality of its labor force improves steadily, they say.
“In the short-run, foreign direct investment may help create new jobs and attract redundant workers from rural areas. In the longer-run, however, low wages in industry may contribute to increased relative poverty,” said Pietro Masina, an associate professor of economics at the University of Naples “L’Orientale” in Italy.
By: Thanh Nien News

Getting severance will be tougher for foreign migrant workers, The Hankyoreh

Recent measure means workers have to return home before getting their severance pay

Van Thanh posted a photo of his handwritten statement on Apr. 21 to a community Facebook page for Vietnamese people living in South Korea. The 26-year-old migrant worker from Vietnam, who lives in Changwon, South Gyeongsang Province, wrote, “After July, all foreign workers can only receive severance pay (departure guarantee insurance) from their own country after they’ve returned home. How are we supposed to get it at home when there are so many people who can’t even get it here in South Korea?”

In 2003, the National Assembly responded to a problem of foreign workers not receiving severance pay by enacting the Act on the Employment Etc. of Foreign Workers. The legislation required employers to enroll in departure guarantee insurance in lieu of severance pay.

But an amendment made to the law on Dec. 31 of last year added a new clause stating that this insurance would only be paid “within 14 days after the departure date.” The amendment was sponsored by Saenuri Party (NFP) lawmaker Kim Sung-tae and others to prevent workers from staying in South Korea illegally. Once the amended law goes into effect on July 29, workers will only be able to receive severance pay after returning home.

To date, workers have been able to receive the payout within three days of leaving their job, regardless of whether they exit the country. Even workers who changed companies midway through their stay were able to receive full severance pay from previous employers after they returned home.

Now groups working for migrant worker rights are upset about the belated news of the amendment. Many are worried workers will be unable to receive all the money they are owed.

“A lot of people can’t even get their severance pay when they stay in South Korea,” said Van Thanh. “That’s only going to become more difficult once we’re back in Vietnam.”

“You need to look at the facts of what migrant workers face when you’re making policy,” he added.

Another sore issue, however minor the amounts involved, has to do with the transaction fees incurred when making wire transfers. Also, the departure guarantee insurance only covers basic pay, without consideration for overtime or nighttime work. Workers are in for more of a hassle making requests in cases where there are discrepancies between their actual severance pay and insurance costs.

“All they would need to do is request the difference between the actual severance pay and the insurance during their stay, before they leave,” a Ministry of Employment and Labor official said on condition of anonymity on Apr. 13.

But while the ministry is suggesting the problem is not serious, others are expressing more concern.

“Even now, 36% of foreign workers don’t even know if they’re enrolled in departure guarantee insurance, let alone how to request the difference from actual severance pay,” said Jung Young-sup, secretary-general of the Migrant Worker Campaign Support Association. “If they can only receive it after they’ve gone home, then we can expect to see more and more workers being hurt by this.”

Figures released in Aug. 2010 by Hong Hee-deok, a former lawmaker for the Democratic Labor Party, showed 23.7 billion won (US$22.9 million) in unpaid departure guarantee insurance between 2008 and 2010, amounting to 12% of the total. More recently, the Ministry of Employment and Labor released figured in Sept. 2013 showing unclaimed insurance payouts of 17.5 billion won (US$16.9 million). 11% of foreign workers were found to be not enrolled in the system.

The main problem, observers said, is the fact that the law was amended to delay payment simply because of concerns about migrants staying in the country illegally.

“Severance pay is a basic right that workers are entitled to when they leave their job, and it’s also a property right,” said Yun Ji-yeong, an attorney with the GongGam Human Rights Law Foundation. “To apply different conditions to foreign workers is to discriminate between them and domestic workers.”

These concerns were echoed in a legislative review report by the National Assembly Environment and Labor Committee last December.

“Not only does [the law] restrict payment rights in a way that the Labor Standards Act does not, but it is questionable whether it would actually reduce the number of people staying in the country illegally,” the report stated.

Migrant worker groups are currently planning to shortly file for an injunction against the law and lodge a constitutional appeal.

By Kim Min-kyung, The Hankyoreh

Published on 14 April 2014

Vietnam tightens control of overseas employment, Thanh Nien News

Vietnam has issued new regulations standardizing overseas work contracts and setting ceilings for deposits that labor agencies require from workers before sending them to work abroad.

With the support of the International Labor Organization (ILO), the Ministry of Labor, Invalids and Social Affairs (MoLISA) has issued two circulars, which will take effect December 1, to protect guest workers and minimize risks for labor agencies.

“The two circulars are essential as they help labor companies reach specific standards in signing contracts with international partners and workers to minimize risks for both companies and workers,” Nguyen Luong Trao, chairman of the Vietnam Association of Manpower Supply, said.

“It’s an important factor that contributes to sustainable enterprise development and safe migration.”

Under the new rules, Vietnamese recruitment agencies will no longer be able to impose their own conditions on contracts. They will have to follow standard conditions, one of which requests companies to refund deposits to workers if they fail to send them abroad.

The standard contract also requires details such as references to a specific job, name and location of the receiving company, and establishes clear responsibilities of all parties, and procedures for dispute settlement in an effort to protect migrant workers in case of contract termination.

“Circular 22 prevents recruitment agencies from using provisions that benefit themselves while minimizing those in favor of migrant workers,” Max Tunon, coordinator of the ILO’s TRIANGLE project, said. TRIANGLE aims to make labor migration in the Greater Mekong Sub-region safer.

The other – Circular 21 – prevents recruitment agencies from requiring unreasonable deposits from workers applying to go abroad.

Tran Van Tu, director of the Vietnam General Confederation of Labor’s Policy Division, said the new circulars will help tackle unhealthy competition among labor agencies and “black costs” that workers have to pay to go abroad.

“But to achieve those goals, State authorities will need to step up inspections of labor companies,” he said.

Currently, some 170 recruitment agencies are operating in Vietnam, sending 80,000 Vietnamese workers abroad every year.

By Thanh Nien News

Published on 14 November 2013

New Law in Vietnam to Tackle Changing Face of Human Trafficking, VOA

Vietnam’s economic growth has improved mobility, giving people more opportunities to travel to find better jobs.But as industries change and cities grow, so do the dangers to the country’s workers. Human trafficking is becoming a bigger problem in Vietnam and the government is doing more to address the problem.

What was once an issue confined mostly to women and children who are sold into the sex industry, pressures from increasing urbanization are changing the nature of human trafficking in Vietnam.

While, demand for wives in countries like China fuel the trade, the United Nations Inter-Agency Project on Human Trafficking, says socio-economic factors are also at play. People living in rural areas with low employment, little awareness and poor education are vulnerable to ploys that could leave them as virtual slaves.

Phan Van Ngoc, former Vietnam country director for Actionaid, says Vietnam’s economic situation is making people more vulnerable to trafficking. In underemployed rural areas, people want to migrate from their home village to make more money.

The issue is not confined to Vietnam. It also occurs in China, Thailand and other neighboring countries. He says the bottom line is that poor people want better lives.

“The problem is that people seek a better life and the problem is that they do not have enough information about the destination,” said Ngoc. “That’s why they are trapped into something that is against their will and against their basic rights.”

In January, Vietnam is set to introduce the Anti-Human Trafficking Law, which the National Assembly passed in March. The law is accompanied by a $13.5 million dollar, five-year anti-trafficking plan. The National Plan of Action for Trafficking has been welcomed by international organizations as a positive step because it goes beyond countering trafficking for sexual exploitation.

The law improves coordination among different ministries, institutions and mass organizations in Vietnam and also stresses the importance of prevention. Ngoc says the new provisions are vital to protect workers who are poorly informed about trafficking risks.

“They have to have an informed choice,” Ngoc added. “It means that they should have enough information about the destination so they can decide whether or not they want to go. It’s best to work at the commune and even district level in areas with a high risk of human trafficking. If they want to go, please, but there must be guidance.”

Although authorities have started paying more attention to people being trafficked for cheap labor, Florian Forster, the country director for the International Organization of Migration (IOM) says that does not mean all laborers are treated badly.

“We should not think that all internal workers are exploited,” said Forster. “Actually, research shows internal migrants moving to urban areas are economically better off. That’s one of the reasons why they move.”

Vietnam also has an official policy to promote sending temporary laborers abroad. Around 80 to 100,000 Vietnamese workers leave the country, through official channels, every year.

The United Nations Inter-Agency Project on Human Trafficking says labor reforms in China are actually fueling abuses among Vietnamese. A 2008 law in China mandates better pay and benefits for Chinese nationals, so Chinese employers instead hire Vietnamese laborers who are exempt from the provisions. However, Forster says the two governments are working together to tackle exploitation.

“There is some ongoing cooperation between Vietnam and China,” Forster added. “This year they signed a memorandum of understanding to address trafficking in human beings so there is a legal basis for cooperation. There is also a sub-regional process involving Mekong sub-regional countries, including China.”

Although Ngoc welcomes Vietnam’s anti-trafficking law, he says there needs to be a firmer commitment from government agencies and outside groups to get better results. He says one reason for the lack of progress is local governments not wanting to take responsibility.

“They don’t want to admit there is trafficking of Vietnamese women,” Ngoc noted. “It’s really sensitive, for example if you work as a provincial authority you don’t want to say there is a lot of human trafficking from my own province.”

He says the situation is now improving because the country’s anti-trafficking law is helping to address that kind of attitude.

By Marianne Brown
Published on November 29, 2011

Fear prevents many from working abroad, Viet Nam News

HCM CITY – Poor awareness and infrastructure are stymieing the implementation of a national programme to send people from disadvantaged areas abroad as guest workers.Authorities in participating provinces struggle to find beneficiaries despite giving poor people subsidies for the expenses involved, including for training.

Around 5,500 people from all over the country have been sent to work overseas since Project 71 was launched two years ago to eliminate poverty, according to statistics from the Ministry of Labour, Invalids and Social Affairs.

More than 1,000 have benefited this year, of whom 95 per cent are poor and ethic minority people.

However, low awareness of the programme among disadvantaged people and the difficulty in travelling around remote and mountainous areas are major hurdles.

Nghe An, one of the poorest provinces in the central region, has sent the largest number of people abroad under the programme, according to its Department of Labour, Invalids and Social Affairs (DoLISA).

More than 43,000 people from Nghe An now work overseas, mostly in Taiwan, Malaysia, Japan, South Korea, and the Middle East.

This helped advance the province’s hunger and poverty elimination efforts, DoLISA said. Around US$90-95 million, earned by its overseas workers, have been sent to Nghe An through commercial banks each year.

Lao Cai in the northern mountains, where the poverty rate is 43 per cent, is another province to implement Project 71 strongly, sending more than 200 people from the three poorest districts overseas in the first half of this year.

“Most of the people working overseas have repaid their bank loans and improved their families’ business,” said Trinh Quang Chinh, head of the province DoLISA.

But authorities said they were unable to find high-quality human resources for the programme since most ethnic people were poorly educated and could not meet the requirements of demanding markets like Japan and South Korea.

“The ethnic people have limited knowledge of the Government’s policies and it is not easy to change their fear of working overseas,” Chinh said, adding that not many applied for foreign jobs.

The difficulty in travelling in the mountainous province was also a factor.

“It [difficulty in travel] is the main reason why information about the programme has not been fully disseminated to people living in distant villages,” Chinh said, adding that the lack of representatives from labour companies to counsel people was another problem.

To encourage people to join the programme, DoLISA in central Khanh Hoa Province has begun to provide a subsidy of VND6 million per applicant to certain categories of applicants from this month.

It is to help cover their foreign language training, travel, and other expenses like getting a visa and doing health checks.

The beneficiaries include people who contributed to the country’s development, children of war invalids and martyrs, poor people, ethnic minorities, and residents of mountainous areas.

With the Government committed to continuing with policies to promote labour export from poor localities, these provinces have an incentive to implement the project better.

The Government is also expected to step up investment, subsidies, and other financial assistance for poor people to encourage them to apply for work abroad.

By Viet Nam News
Published on September 27, 2011

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