The Lao National Labor Committee announced the raise on July 8, which hikes the minimum wage by 100,000 kip (US$6.54) per month.
The wage increase is designed to help Laotians cope with rampant inflation in the country. But it is not clear how extensively the new pay minimum will be applied.
The government cannot force business owners to increase wages if they have reached an agreement with their workers on pay and other benefits, an official from the Ministry of Labour and Social Welfare’s Department of Labour Management said.
“If they mutually agreed that the business operators provide food and accommodation to the workers, the business operators and workers can keep wages the same,” the official said.
“We cannot force the business operators to increase the minimum wage because companies or business operators have their own conditions and policies with their hired workers. If there is any case of taking advantage of the workers, we, as a government body, can go to workplaces and investigate problems,” the official said.
A representative from the Lao Federation of Trade Unions said that the union will encourage workers to add clauses to their employment contracts that would force businesses to adhere to minimum wages as set by the government.
“The government has suggested to all business operators to increase the minimum wage. However, it depends on each company or business’s decision to increase to this suggested minimum wage. Each company and business operator has its own policy and conditions,” the trade union official said, according to RFA.