Lao Government Makes Significant Changes in Minimum Wage

Although the minimum wage was raised just over a year ago, the government of the Lao PDR, through the Ministry of Labor and Social Welfare (“MLSW”), issued Notice No. 3534/LSW on 27 September 2024, announcing a new increase in the monthly minimum wage effective 1 October 2024. The reason for the sudden increase is to address the rapidly rising cost of living and provide greater financial security for the Lao workforce.

The monthly minimum wage will now be LAK2.5 million, an increase of LAK900,000 from the previous minimum wage of LAK1.6 million. This adjustment is significant, being three times greater than the increase made in 2023.

The table below provides a quick view of the minimum wage adjustments made over the last 10 years:

Minimum wage (LAK)	Date	Increase (LAK)
626,000	23 November 2011
900,000	9 February 2015	274,000
1,100,000	20 April 2018	200,000
1,300,000	13 June 2022	200,000
1,600,000	16 August 2023	300,000
2,500,000	27 September 2024	900,000

This policy change is part of the government’s broader strategy to improve the standard of living and support the economic well-being of workers across all sectors. Although the new wage level remains lower than in neighboring countries such as Thailand and Vietnam, it represents a positive step forward in aligning wages with regional standards and addressing the economic realities faced by Lao workers.

For businesses and investors operating in the Lao PDR, this wage increase may have implications on operating costs, labor management, and overall business strategy. We recommend that companies review their labor policies to assess the potential impact of this increase on wage structures, employee retention, and cost competitiveness, and to ensure a smooth transition to the new wage framework.

For assistance with this and for more information on the minimum wage structure and employment regulations of the Lao PDR, please contact the VDB Loi Laos office: Soulisa Chittalath ([email protected]).