Lao Labor Ministry Issues Guidelines to Implement the Minimum Wage Increment

The Ministry of Labor and Social Welfare of the Lao PDR (MLSW) has issued Decree No.2718/LSW dated 8 July 2022 (the “Decree”) stipulating specific guidelines to implement the Notification No. 829/PMO dated 13 June 2022 issued by the Prime Minister’s Office concerning an increment of the national statutory minimum wage from LAK1,100,000 to LAK1,300,000 (please see our previous article, published on 16 June 2022 – click here).

The key guidelines:

• The employees working in a labor unit in the Lao PDR will be entitled to obtain a minimum salary/wage of LAK1,200,000 per month, starting from 1 August 2022. For day laborers, the wages must be at least LAK46,154 per day (computed on basis of the hourly rate – LAK5,769 per hour multiplied by the permitted daily working hours – 8 hours).
• The employees will be entitled to a further increment from 1 May 2023. The minimum monthly salary or wages that an employer will have to pay then is LAK1,300,000 per month. Accordingly, the day laborers must be paid at least LAK50,000 per day (based on the hourly rate – LAK6,250 per hour multiplied by the permitted daily working hours – 8 hours).
• The employees, who lack special skills and training, are specified as prioritized groups under the Decree. In addition, an employee who have experience of working in a specific role for at least nine months must be paid remuneration that is commensurate with his/her respective work experience.
• The employees and day laborer working in a hazardous sector are entitled to receive an additional remuneration that is at least equal to 15% of the statutory minimum wage.  All labor units involved in businesses that adversely impact the health and safety of a section of its labor force such as cement production companies, mining projects, etc., should adjust their payroll policy accordingly.

The Decree came into effect on 8 July 2022 and applies to all labor units operating within the Lao PDR.

For more information on the minimum wage structure and employment regulations of the Lao PDR, please contact the VDB Loi Laos office: Meckhala Vilivong ([email protected]), Arbear Sydavong ([email protected]).