Minimum Wages in ASEAN for 2021
- Minimum wages across ASEAN countries are gradually increasing to match the rise in the cost of living.
- However, due to the pandemic, many ASEAN members did not raise their minimum wages or did not raise them significantly.
- Despite the increases, minimum wage rates in ASEAN remain among the lowest in Asia.
Minimum wage rates across ASEAN countries are rising gradually to match the region’s increased cost of living and boost domestic demand. However, due to the pandemic, many ASEAN members did not raise their minimum wages or did not raise them significantly.
In this article, we highlight the latest statutory minimum wage levels in each of the ASEAN member states with the exception of Brunei and Singapore as they do not have a mandatory minimum wage.
Given that the minimum wage for each country is different, foreign investors should seek the help of registered local advisors to help understand how changes to the wage rate and related compliances will affect the scope of their business and operations on the ground.
Cambodia’s Ministry of Labor and Vocational Training (MLVT) issued Prakas No. 33 which stipulated that the country’s 2021 monthly minimum wage was set at US$192 for regular workers, an increase of US$2 from 2020. The new rate has been in effect from January 1, 2021.
For probationary workers, the monthly minimum wage is US$187, also in effect from January 1. Workers also receive other benefits, which include accommodation allowance at US$7 per month, attendance bonus of US$10 per month, and food allowance of US$0,5 per day. Moreover, there is an overtime and seniority bonus of between US$2 to US$11 for workers who have worked from the second to the eleventh year.
The regulation also sets out the minimum wage for piece-rate workers — paid by the number of textile/garment/footwear pieces they complete.
Indonesia’s Ministry of Manpower issued circular No. M/11/HK.04/X/2020 in late October 2020, which advised that due to the economic impact of the pandemic, regional governments should keep monthly minimum wage rates the same as 2020.
Of Indonesia’s 34 provinces, only five have decided to increase the minimum wage for 2021. The minimum wage in Indonesia is mandated through Government Regulation 78 of 2015 (GR 78/2015), which provides a formula for regional governments to calculate the percentage increase of the minimum wage. The formula is as follows:
National Inflation + National Economic Growth = Percentage Increase of Minimum Wage
The five provinces (*) that have increased their minimum wage rate for 2021 are:
- Special Capital Region of Jakarta;
- South Sulawesi;
- Central Java;
- Special Region of Yogyakarta; and
- East Java.
The minimum wage rate for each province is shown in the table below.
Malaysia’s 2020 monthly minimum wage rates are set to continue to 2021, although the government will launch a review later in the year to ensure earnings remain relevant to current economic conditions. The monthly minimum wage in 56 major cities is 1,200 ringgit (US$291), whereas the minimum wage in non-urban areas and rural towns is 1,100 ringgit (US$266).
The daily minimum wage in Myanmar is revised every two years and discussions on the new rate were meant to begin in mid-2020. However, due to the pandemic, negotiations have been suspended.
The daily minimum wage rate will continue to be 4,800 kyat (US$3.07) for eight hours of work. The Confederation of Trade Unions of Myanmar is set to propose a minimum wage increase of 7,200 kyat (US$4.62) for eight hours of work.
Laos has yet to implement an increase in its minimum wage since 2018. The minimum wage for 2021 is set at 1.1 million kip (US$116) a month.
The minimum wage was determined through tripartite social discussions between employers’ associations, workers’ organizations, and government representatives.
The Philippines has daily minimum wage rates that vary from region to region, ranging from PHP316 (US$6.57) to P537 (US$11.17) a day for 2021. The wages are set by tripartite regional wage boards located in every region.
The daily minimum wage in Thailand is between 313 baht (US$10.03) – 336 baht (US$10.77) for 2021.
Following the country’s rapid economic growth, in the past few years, the Vietnamese government has increased minimum wages to combat inflation.
The monthly minimum wage rate from January 1, 2020, has not changed for 2021, although the government will review the rates in July 2021.
The country sets a different minimum wage level across its four regions. As a result of the new increase, Region I (urban Hanoi and Ho Chi Minh City) registered the highest minimum wage of VND 4,200,000 (US$181) while Region IV was the lowest with VND 3,070,000 (US$132).
Moreover, employees that have had vocational training must be paid at least seven percent higher than the applicable minimum wage rate.
The minimum wage rates are as below.
Editor’s Note: The article was first published on April 16, 2013. It was last updated on April 5, 2021.
ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Da Nang in Vietnam, Munich, and Esen in Germany, Boston, and Salt Lake City in the United States, Milan, Conegliano, and Udine in Italy, in addition to Jakarta, and Batam in Indonesia. We also have partner firms in Malaysia, Bangladesh, the Philippines, and Thailand as well as our practices in China and India. Please contact us at email@example.com or visit our website at www.dezshira.com.
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