Employment & Labour Law

ILO clarifies on Disability Hiring, Minimum Wage and Holidays

Date: 21 August 2018; Type: Legal News; Source: Myanmar Times

Myanmar’s minimum wage, which is revised once every two years, applies to all regions and states of the country and all sectors and businesses, except small and family-run businesses with fewer than 10 employees. In theory, management bodies of Special Economic Zones can also table a different rate for the National Committee for Minimum Wage to consider.

Meanwhile, the 2015 Disabilities’ Rights Law makes provision for the introduction of a quota for hiring people with disabilities but the level and implementation arrangements have not yet been issued. It will be mandatory that management pays to the funds established for the rights of the people with disabilities if the quota is not met, but the implementation arrangements have not yet been issued.

The International Labour Organisation (ILO) released a Myanmar labour law FAQs for employers last month, clarifying issues such as minimum wage, paid leave and holidays.

Minimum wage

The National Committee for Minimum Wage sets the minimum wage. Employers should be aware that the minimum wage should be revised at least every two years, provided in Section 5(h) of the 2013 Minimum Wage Law. In practice, the fact that the review process starts every two years does not necessarily mean that a final decision is made every two years.

The latest review started in April last year with the establishment of the new National Committee for the Review of the Minimum Wage, which  included representation of both employers and worker organisations and independent experts.

After a round of negotiations and consultations nationwide, the committee announced its recommendation in late December 2017. Eventually, it released the new minimum wage rate on May 14 with the approval of the government. The new minimum wage became effective as of the day of announcement - K4,800 per day or K600 per hour. This applies to all regions and states of the country and all sectors and businesses, except small and family-run businesses with fewer than 10 employees. In theory, the only exceptions are the Special Economic Zones. SEZ Management Committees are stipulated by law to establish its own minimum wage and propose any special rate to the National Minimum Wage Committee.

In practice, no special minimum wages have been set in any SEZs so far.

According to Section 13(a) of the Minimum Wage Law, employers have an obligation to notify workers on new minimum wage.

The law only defines “wages” which include “the fee or salary entitled to be obtained by the worker for carrying out of hourly work, daily work, weekly work, monthly work or any other part-time work of the employer. This expression includes over-time fee or bonus given by the employer for the good work or character, or other remunerations or benefits which may be determined as income.”

While there is no clear legal definition of “minimum wage”, the ILO argued that it should be considered as the “base wage” which a worker receives for carrying out hourly, daily, weekly or monthly work or in any other part-time work, and that “base wage” does not include bonuses, overtime fees or allowances.

Holidays and leave

There is only “Earned Leave” in Myanmar’s labour laws, instead of “Annual Leave”. During annual leave, workers must be paid their “average wages” according to the Leave and Holidays Act 1951. While there is no clear definition of “average wages”, ILO said it should be assumed as the daily wage based on the standard working hours per day.

In addition, the Act stated that workers who resign or are terminated before using their leave must be paid for unused leave based on average daily earnings over the last 30 days. Payment for unused leave must be made to workers within two days.

Apart from earned leave, all workers are given six days of paid casual leave per year. All workers earn 10 days of paid leave per year after their first 12 continuous months of work – if the worker doesn’t stay for 12 months, they may get “earned leave” in proportion to the days worked. Similarly, leave entitlements of temporary workers should be decided in proportion to the length of their employment.

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