On 20 September 2024, the Ministry of Labour and Vocational Training (“MLVT”) issued Prakas 211/24 on the Determination of Minimum Wage for Workers in the Garment, Textile, Footwear (“GTF”), Travel Product and Bag Sectors (“Prakas 211”), to set a new minimum wage for 2025, which will be effective from 1 January 2025.
Under Prakas 211, workers in the above sectors will be entitled to the following new minimum wage:
- for regular workers, USD 208 per month; and
- for probationary workers, USD 206 per month.
Prakas 211 also sets out the minimum wage for piece rate workers. For such workers, the pay rate is determined based on their level of production and, if 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 208 for regular workers and USD 206 for probationary workers).
The other benefits to which the workers in the GTF sectors are entitled remain unchanged, such as compensation for a transportation or accommodation allowance of USD 7 per month, an attendance bonus of USD 10 per month, a meal allowance of USD 0.5 per day (or one free meal per day) for workers who work overtime and a seniority bonus from USD 2 to USD 11 per month for workers in their second to the eleventh years of service.
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 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.
In light of the above, we recommend business operators adhere to the requirements set out in the Law on Tourism and to check the expiration date of their licenses or obtain a new license, if necessary, as failure to do so may result in monetary fines as specified in this Prakas.
Should you require any further information or legal support, please contact us at: [email protected].
