Pay The Minimum Wage Or Face Legal Action, Employers Told

Source: Vientiane Times

Employers in Laos will be subject to legal action if authorities discover they are failing to pay their workers the minimum wage.

The minimum wage was increased last year from 900,000 kip to 1.1 million kip a month for a  standard eight-hour day, in a bid to keep pace with the rising cost of living.

A senior official from the Ministry of Labour and Social Welfare said that under this government-mandated minimum wage, no worker should be paid less.

The new wage rate was brought into being by a prime ministerial order.
The pay increase was considered essential to prevent people falling into poverty and suffering hardship amid spiralling living costs.

“Clearly, 900,000 kip a month was not enough to live on, especially as many products are increasingly expensive,” the official 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, he added

Vice President of the Lao Federation of Trade Unions, Mr Symoune Ounlasy, spoke to Vientiane Times about the issue yesterday.

He said inspections had already begun at target companies and factories in Vientiane, and employers were being given advice about the situation.

Some companies were failing to pay the new minimum wage, saying that an increase would mean they would be able to hire fewer workers and would run into financial difficulties.

Another reason that some factory workers are not being paid the full wage is that they feel powerless to negotiate with factory managers and business owners.

Other kinds of business, such as tourist-related operations, restaurants, hotels and construction companies, are mostly complying with the order.
They believe that by paying their employees more it will discourage them from looking for jobs in neighbouring countries, where wages are higher.

The minimum wage is the lowest remuneration that employers can legally pay unskilled workers. The minimum wage in Laos is lower than that paid to workers in Myanmar, Cambodia, and Thailand

In recent years, the government has approved increases in the minimum wage but is unable to prevent increases in the price of food and consumer goods.  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.