With the minimum wage increasing, can businesses cut allowances for employees to compensate for wages?

Legal Consulting Department of Lao Dong Newspaper answers:

According to Decree 399/2026/ND-CP of the Government, effective from January 1, 2027. Clause 1, Article 3 of this Decree stipulates that the minimum monthly salary is adjusted as follows: region I is 5.7 million VND; region II is 5.08 million VND; region III is 4.45 million VND and region IV is 4.04 million VND.

Clause 3, Article 5, Decree 399/2026/ND-CP stipulates that employers are responsible for reviewing agreements in labor contracts, collective labor agreements and regulations and rules of employers to adjust and supplement them accordingly; it is not allowed to abolish or cut salary regimes when employees work overtime, work at night, in-kind allowances and other regimes according to the provisions of labor law. For contents that have been agreed upon and committed in labor contracts, collective labor agreements or other legal agreements that are more beneficial to employees (such as the regime of paying salaries to employees doing jobs or titles requiring education and vocational training at least 7% higher than the minimum wage and the regime of paying salaries to employees doing jobs or titles with heavy, hazardous, and dangerous working conditions at least 5% higher; jobs or titles with particularly heavy, hazardous, and dangerous working conditions at least 7% higher than the salary of jobs or titles with equivalent complexity, working in normal working conditions) compared to the provisions of this Decree, it shall continue to be implemented, unless the parties have other agreements.

Thus, from January 1, 2027, when the minimum wage increases, businesses are not allowed to remove or cut wage regimes for employees as mentioned above.

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