Lao Economy

Minimum Wage Cheats To Be Punished

Employers who continue to defy the government’s policy on minimum wages will be dealt with under the law, according to the Minister of Labour and Social Welfare.

Ms Onchanh Thammavong spoke to media about current issues with minimum wage laws yesterday at the annual government meeting with provincial governors in Vientiane.

“Employers who have not followed the Law on Labour and other regulations formulated by the government must be subject to the law for their violations,” Ms Onchanh said.

The government’s decision to raise the monthly minimum wage from 348,000 kip to 626,000 kip came into force on January 1, 2012, but many businesses have ignored the change.

Ms Onchanh said an assessment conducted one year after the new rules were introduced found some employers were still not paying their workers enough.

She said the ministry would keep pressuring businesses to follow the payment rates set by the government.

The minimum wage is the monthly amount paid to unskilled workers with no professional experience who work eight hours a day, 26 days a month.

The minister said some businesses sought to cheat the system by claiming allowances for overtime, good performance and social welfare benefits were part of a worker’s base wage.

“That is completely wrong. The government has defined the minimum wage per labourer per month, not the total income a labourer receives from his employer,” she said.

Ms Onchanh said a “reasonable” wage many businesses had decided to pay their employees was a minimum of 800,000 kip per person per month

She said her ministry, the Trade Union and the Lao National Chamber of Commerce and Industry would continue to identify businesses failing to comply with the regulations and would look at why they were choosing to break the law.

The minister called on members of the public and the media to act as watchdogs on the behaviour of businesses, and to report any employers paying less than the minimum wage to the ministry.

Source: Vientiane Times