Welcome to the new DFDL Legal Brief Lao PDR edition. In this issue we will summarize two recent decisions on updating employment documents and increasing the minimum wage.
Updating employment documents before the end of April 2015
The Ministry of Labor and Social Welfare passed the Notification on Effectiveness of Implementation of the (amended) Law on Labor (No. 3438/MLSW, 27 November 2014) which confirms that the amended Labor Law (No. 43/NA, 24 December 2013) became effective on 28 October 2014. Employers have six months from that date to revise their labor documents, including employment agreements and internal regulations to comply with the new Labor Law. This means such improvements must be made before the end of April 2015.
New minimum wage as of April 2015
With effect from 1 April 2015, the Ministry of Labor and Social Welfare will adopt the Instruction on the Improvement of Minimum Wages of Employees in the Lao PDR (No. 808/MLSW, 9 February 2015) which increases the minimum wage of household employees and employees working in production, business or service sectors from LAK 626,000 to LAK 900,000 per month. The Instruction does not concern the minimum wage of employees working for international organizations, INGOs or embassies as separate regulations govern the wages paid by these organizations. In this Instruction, minimum wage refers to the basic salary an employer must pay to an employee working 8-hour days, six days per week, excluding other payments such as for overtime, bonuses, incentives and benefits. The minimum salary must be increased at least 15% for employees working in dangerous areas or with hazardous substances.