Employment & Labour Law

Businesses urged to comply with May 1 Minimum Wage Increase

Date: 01 May 2018; Type: Legal News; Source: Vientiane Times

All businesses and factories in Laos are required to increase the minimum wage from the present 900,000 kip to 1.1 million kip a month as of May 1 in a bid to improve workers’ standard of living.

This was the message at a press conference on Monday to announce the minimum wage increase, which was attended by representatives of the Lao Federation of Trade Unions (LFTU), Ministry of Labour and Social Welfare, and the Lao National Chamber of Commerce and Industry.

The wage increase coincides with International Labour Day.

If labour authorities find any violations of the new ruling, transgressors will be warned, fined, or even have their business licence suspended under the Labour Law, in cooperation with related sectors such as the LFTU and Ministry of Labour and Social Welfare, Dr Khampheng said.

The minimum wage is the lowest remuneration that employers can legally pay unskilled workers. It does not include social welfare benefits paid by employers.

“The minimum wage has been increased under a prime ministerial decree after the ministry proposed the increase and submitted it to the government,” Dr Khampheng said.

The pay rise is seen as vital to improve workers’ living conditions and ease their hardships amid rising costs, with prices rising every month.

“The wage increase will attract the interest of labourers who may otherwise seek work in neighbouring countries, encouraging them to find work in Laos where wages are higher,” he added.

Dr Khampheng said 900,000 kip a month was not enough to live on, and many items were increasingly expensive.

LFTU representative Ms Vongnorbountham said that in recent years the government had approved increases in the minimum wage but had been unable to prevent increases in the price of food and consumer goods.

She said employers should sympathise with workers and help them to improve their circumstances, especially as they are the ones who enable their employers to make a profit.

According to the Ministry of Labour and Social Welfare, the government first increased the minimum wage in 1991.

In 2012 the government raised the minimum wage from 348,000 kip to 626,000 kip a month, and in 2015 ordered a further hike to 900,000 kip a month.

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