Vietnam

In March of 2011, a Yamaha plant in southern Vietnam was forced to cease motorbike production after approximately 4,000 employees went on strike. In order to appease the workers, they were given a 13% raise in wages.

Vietnam, Indonesia, the Philippines, Malaysia, Thailand, and Singapore are all anticipating increases in average salaries for 2011.

A recent survey published by the Wall Street Journal showed that blue collar manufacturing wages in China are now three times those in Vietnam.

Over the past few years, Vietnams high-tech manufacturing and service sector has been plagued with rising labor costs and a shortage of skilled workers.

Recent unexpected changes in enforcement of visa regulations for expats in Vietnam could prove costly to foreign companies doing business there.

Vietnam has recently appeared on the radar of many multinational companies eager to avoid the increasing costs and labor regulations of China. However, the struggle to recruit and retain human capital has sometimes outweighed the cost-savings.

In January 2009, new monthly minimum wage levels took effect for Foreign Invested Enterprises (FIEs) in Vietnam. Monthly minimum wages for workers at foreign companies were increased by between VND120,000 and VND200,000 (about US$6.86 and $11.45).

In early August 2008, close to 6,000 workers went on strike at a foreign invested textile company in southern Vietnam. 4,000 workers at a nearby Hong-Kong owned factory also organized a strike.

Officially, since 2003, Vietnamese law has prohibited enterprises from employing more than 3% or 50 (whichever is less) foreigners in their total workforce. This rule received heavy criticism from FIEs operating in Vietnam.

Last week, more than 1,000 workers at Panasonic Vietnams assembly facility initiated a labor strike. The workers are demanding a 25% pay increase up from the current average of 1.05 million Vietnamese dong per month.

In April 2008, the Vietnamese government is expected to release new regulations regarding ownership of property by overseas Vietnamese returning to their homeland.

On January 1, 2008 Vietnams government increased minimum wage for workers at foreign-owned enterprises to 800,000 dong (about US$50) per month.

Vietnams Ministry of Labor, War Invalids and Social Affairs (MOLISA) announced this month that it intends to remove the countrys current cap on foreign employment by the end of 2007.

Vietnams Department of Labor, Invalid and Social Affairs in Hanoi opened its first online job transaction service on May 12, 2007.

Last month, a popular Vietnamese jobsite, www.vietnamworks.com, conducted a survey of domestic and foreign firms in Vietnam on the availability of local talent to fill positions.

With economic growth averaging over 7% annually for the past five years and scheduled to join the WTO by the end of the year, Vietnams future looks bright.

In the past few months, there have been close to fifty labor strikes at Foreign Invested Enterprises (FIE) in Vietnam, and many employees have walked off their jobs at foreign factories.

On January 6, 2006, Prime Minister Phan Van Khai signed a law to raise the minimum wage at foreign firms in Vietnam. The new minimum wage policy came into effect on February 1, 2006.

The Vietnamese government upheld in Decree 93 (issued July 2005) its previous limit on the number of expatriate employees a company may hire, which was 3% of the companys total workforce.

Vietnam s economy is growing rapidly and competition for skilled labor is on the rise. Following the establishment of economic zones and programs providing foreign direct investment incentives, more and more businesses have set up shop in Vietnam.

According to a 2005 first quarter report compiled by VietnamWorks, the countrys job market and employment situation is already showing an upward trend in comparison to 2004.

Vietnam has recently established two new human resource programs to improve the skills of students and workers.

Vietnam's Decree 105/2003/ND-CP, passed on September 17, 2003, limits the maximum number of expatriate employees at 3% of the total workforce or not more than 50 foreign employees per company.

With greater numbers of multinational companies moving their operations into Vietnam, the demand for high-skilled professionals continues to increase.

In order to tackle the human resources problem, the government has channeled significant resources into IT training and human resources. Vietnam seeks to have 25,000 trained programmers and specialists by 2005.

The Vietnamese labor pool is estimated to contain nearly 40 million workers, many of them relatively well educated. However, many companies have had difficulties finding qualified individuals.

Effective July 1, 2001, tax rates for Vietnamese citizens and foreigners living in Vietnam will be adjusted.