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Lao People's Democratic Republic - Minimum Wages - 2011


LAST UPDATE

3 November 2011

SOURCES


Name of Act

Labour Act (Amended) 2006, Act No 06/NA dated 27 December 2006. Published by the National Assembly of the Lao People’s Democratic Republic at http://www.na.gov.la/docs/eng/laws/soc_cult/Labour%20(2006)%20Eng.pdf and accessed 31 October 2011.
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Other source used

ASEAN Assessment on the Social Impact of the Global Financial Crisis - Lao PDR Country Profile. Published by the Association of South-East Nations at http://www.aseansec.org/publications/ARCR/LaoPDR.pdf and accessed 3 November 2011.

Other source used

i) Lao in the Limelight, 10 October 2011, published by KT-ZMICO at http://www.bcel-kt.com/files/userfiles/Lao%20in%20the%20LimeLight%20Report_10%20Oct%202011(1).pdf and accessed 3 November 2011.

ii) ’Minimum wage to rise by 80%’, 8 October 2011, published by Lao Voices, citing Vientiane Times, at http://laovoices.com/2011/10/08/minimum-wage-to-rise-by-80-percent/ and accessed 3 November 2011.

iii) ’Communist Laos fails to hike minimum wage amid rising inflation’, 25 July 2011, published by Voices for the Laotian Who do not have Voices at http://khampoua.wordpress.com/2011/07/25/communist-laos-fails-to-hike-minimum-wage-amid-rising-inflation/ and accessed 3 November 2011.

iv) ’Minimum wage rises by 20%’, 26 February 2009, published by KPL - Lao News Agency at http://www.kplnet.net/english/news/newsrecord/26.02.09/edn4.htm and accessed 3 November 2011.

LEGAL DEFINITIONS


Employee/worker

Employee means a person working under the supervision of an employer while receiving compensation for work through salary or wages, benefits or other policies as regulated by laws, regulations and the employment contract.
Labour Law (Amended) 2006 §2(4)

Employer

Employer means a person or organisation using employees for its activities by paying salary or wages, and providing benefits and other policies to the employees as regulated by laws, regulations and the employment contract.
Labour Law (Amended) 2006 §2(5)

Wage

Salary or wages are income that has a monetary value that the employer must pay to the employee.
Labour Law (Amended) 2006 §44

MINIMUM WAGE FIXING


Procedure


Government decides alone

The government is entitled to determine the minimum level of salary or wages in each period for each area of work.

The employer has no right to set the level of salary or wages of his employees at a level lower than that declared by the State.
Labour Law (Amended) 2006 §46

Criteria


Cost of living

The determination of the minimum level of salary or wages is aimed at securing the basic minimum living standard of the employees consistent with the level of the change in the cost of living in each period.
Labour Law (Amended) 2006 §46

Other provisions

No other provisions apply to the setting of the minimum wage. However, the Labour Law imposes a number of criteria which employers are to apply when exercising their right to set the level of salary or wages of its employees higher than that declared by the Stated.

Specifically, such higher salary or wage levels are required to:
(i) achieve balance with the level of capacity and knowledge of different groups in the society or the level of payment of salary or wages in other labour units;
(ii) reflect the value of work performed;
(iii) meet the material and moral needs of life of the employees;
(iv) reflect the cost of living and changes to it from time to time;
(v) take account of social welfare and social security benefits for workers.
Labour Law (Amended) 2006 §46

Coverage


Scope

The minimum wage applies to all employees and employers who carry out activities in labour units, which are defined as the production, business or service units of the economic and social sectors. It also applies to persons working under written contracts for employment of three months or more.
Labour Law (Amended) 2006 §6

Excluded categories


» Occupations

The minimum wage does not apply to civil servants, military and police personnel employed in Party or State organisations, the Lao Front for National Construction or mass organisations.
Labour Law (Amended) 2006 §6

Specific minimum wage rates


» Minimum wage levels for specific categories of workers


» Disabled

Labour units shall give priority to disabled or handicapped persons to work in their units in accordance with their abilities and skills, and shall give them suitable positions with regular salary or wages as other general workers.
Labour Law (Amended) 2006 §26

» Other categories

During the probationary period, workers shall receive salary or wages of not less than 90% of the salary or wages for such work.
Labour Law (Amended) 2006 §27
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Level


Minimum wage level(s) in national currency

348,000 kip per month
ASEAN Assessment on the Global Financial Crisis - Lao PDR p11
Various media reports on minimum wages - 2009 and 2011
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Last minimum wage update

2009
ASEAN Assessment on the Global Financial Crisis - Lao PDR p11
Various media reports on minimum wages - 2009 and 2011
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In-kind allowances

Salary or wages must be paid in cash, in full and on time, except where it is otherwise prescribed by government regulations or as specifically agreed between the employer and employee.

The Labour Law expressly prohibits payment to employees in the form of narcotics, intoxicating substances or substances dangerous to health.
Labour Law (Amended) 2006 §47
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Rate of payment


» Monthly

Salary or wages must be paid to employees at least once a month at a fixed time, except for additional allowances, bonuses or other benefits which are determined by internal regulations of the labour unit.
Labour Law (Amended) 2006 §49

» Other

In respect of wages paid on a per unit of products basis, or in respect of hourly work, workers shall be paid at least twice a month.
Labour Law (Amended) 2006 §49

Scheduled frequency of adjustment

No scheduled frequency of adjustment identified.

Enforcement mechanisms


Labour inspection

The minimum salary or wages in each period of all labour units shall be under the inspection of the labour administration agency.
Labour Law (Amended) 2006 §46

Fines in national currency for non-respect of legislation

Any individual or legal entity that violates the Labour Law law may be fined based on the nature of the offence, including having to compensate for civil damage caused, as regulated by the laws and regulations.
Labour Law (Amended) 2006 §75
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Other penalties

In addition to potential liability for fines, any individual or legal entity that violates this law may be re-educated, warned, subject to temporary suspension of business, subject to withdrawal of business licence or brought to court proceeding based on the nature of the offence, including having to compensate for civil damage caused, as regulated by the laws and regulations.
Labour Law (Amended) 2006 §75
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Results generated on: 29th August 2014 at 14:01:28.
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