COUNTRY

Written Agreements

The Labor Law of Laos mandates the conclusion of employment contracts in writing where either party is a legal entity or organization. Employment contracts may be verbal or written if both parties are individuals, not legal entities or organizations.

Oral Agreements

Employment contracts may be verbal or written if neither party is a legal entity or organization.

Implied Agreements

Lao labor law offers no provisions or guidance on implied employment contracts.

The standard workweek is 6 days, and work should be at most 8 hours per day or 48 hours per week. Employees who work in dangerous conditions may not exceed 6 hours per day or 36 hours weekly.

Employers must provide a working schedule that allows a 1-hour lunch break and a minimum of 1 day of rest each week.

National Day (December 2), International New Year (January 1), International Women's Day (March 8), Lao New Year festival (days may vary), (International Labor Day (May 1), National Teacher's Day (October 7), National day of employees who do not hold Lao citizenship (date varies according to the national day of the relevant nation).

Employees with an employment contract for over 1 year and have worked for at least 1 full year or those with an indefinite employment contract are entitled to 15 days of annual leave.

Employees who work in dangerous conditions are entitled to 18 days of paid annual leave at their normal wage.

In Lao, employees remunerated monthly are entitled to up to 30 days of fully paid sick leave upon presenting a medical certificate to their employer.

Employees who work hourly, daily, or per unit are entitled to sick leave if they have worked for their employer for at least 90 days.

Under Lao labor laws, women employees are entitled to a minimum of 105 days of maternity leave, 42 of which must be taken following birth. In the case of multiple births, maternity leave is extended to up to 120 days. Employees are entitled to an allowance of 100% of their normal wage during maternity leave.

Women are entitled to 1 hour per day to rest or care for their child for up to 12 months after birth.

An employee is entitled to a period of leave determined by a doctor in the case of a miscarriage and a maternity allowance as determined by the Law on Social Security.

Lao Labor law does not expressly provide for paternity leave. However, Lao does provide for personal leave of 3 paid days that an employee may use for births or miscarriages.

Minimum Wage

As of October 1, 2024, the minimum monthly wage in Lao is LAK 2,500,000 (Lao kip) and cannot include overtime, welfare, or other pay.

The labor law requires employers to pay wages at least once a month at a fixed time. Employees paid per unit or hourly must be paid at least twice a month or in periods no more than 16 days apart.

Overtime, Holiday & Vacation Pay

Overtime

Overtime pay for hours worked during the day is 150% of the employee's normal hourly wage. Overtime during night hours is 200% of the employee's normal hourly wage. If an employee is scheduled to work a night shift between 10 PM and 5 AM, they are entitled to an additional bonus of at least 15% of their regular hourly wage for each hour of overtime.

Overtime may only exceed 30 hours monthly in cases of emergency or accident. Each overtime period may be at most 3 hours and may not be a daily occurrence. Employers may not schedule a pregnant or female employee with a child under 12 months to work overtime or on a rest day.

Holiday Pay

Overtime pay for hours worked on the employee's day of weekly rest or a recognized holiday is paid at the rate of 250% during the day or 300% during the night of the employee's normal hourly wage.

Vacation Pay

Employees with an employment contract for over 1 year and have worked for at least 1 full year or those with an indefinite employment contract are entitled to 15 days of annual leave. Employees who work in dangerous conditions are entitled to 18 days of paid annual leave at their normal wage.

Notice Period

In Laos, an employer may terminate an employment contract if they determine that the employee does not have adequate skills or is in poor health. The employer must provide 45 days' notice to the employee with an explanation of the reason for termination. The employee is entitled to 1 paid workday per week to seek new employment.

If an employer experiences a work injury or becomes sick and cannot perform their duties, the notice period is tolled until treatment is concluded.

Severance Benefits

Employees are entitled to a termination allowance if the grounds for termination are due to a lack of skill, poor health, or a necessary reduction in the workforce. The termination allowance is calculated based on the employee's length of employment. Employees who have worked less than 3 years are entitled to 10% of their monthly salary for each month of work, and employees who have worked over 3 years are entitled to 15% of their monthly salary for each month of work.

For employees paid per unit of production or whose wages are not fixed, the termination allowance is based on the employee's average wage in the 3 months immediately before termination.

Pension

In Laos, all labor units and employees must be insured and contribute to the National Social Security Fund to be eligible for Social Security benefits. Employers are responsible to employees who have yet to contribute at all or enough to the fund to receive benefits. Foreigners who work in Lao for over 12 months must register with the National Social Security Fund.

The retirement age in Laos is 60 for men and 55 for women who have worked at least 15 years. For employees who worked in dangerous conditions continuously for 5 years, the retirement age is 55 for men and 50 for women who have worked at least 15 years. Individuals who are 3 years shy of retirement age, are in poor health, and have contributed at least 15 years to the Social Security fund in full are eligible to receive retirement benefits.

Dependents/Survivors Benefits

The Lao Social Security Organization provides a subsidy for beneficiaries of the deceased. Survivor's benefits can include health care services, monthly pensions, and death grants. The deceased must have completed contributions to the social security fund for at least 5 years.

The following conditions must be met to be eligible for a spouse to receive a benefit for 30% of the last insurable earnings:

• The surviving husband is at least 60 years old and has no regular income
• The surviving wife is at least 55 years old and has no regular income

Children are eligible for a benefit for 20% of the last insurable earnings until they reach 18. Children with deceased parents who were both insured are only entitled to a benefit based on either the father's or the mother's entitlement.

Insured deceased children who were the breadwinner for parents and where a parent has reached retirement age and has no regular income are entitled to benefits equal to 30% or a total of 50% if both parents are entitled to the benefit.

Invalidity Benefits

Lao's Social Security Organization provides a subsidy for labor accidents, occupational diseases, and other accidents or illnesses that leave citizens unable to work.

The following conditions must be met to be eligible for a disability subsidy due to general accidents or illnesses:

• Loss of work capacity of a minimum of 41% as assessed by the National Social Security Fund's Medical Committee
• Contributed to the disability pension for at least 12 out of 24 months

Employees are entitled to 100% of their regular wages for 6 months during the prescribed treatment and rehabilitation of a workplace accident. After 6 months, the social insurance organization will cover the cost per the Law on Social Insurance. Employers or social insurance must pay remuneration to the employee if they become disabled or lose any organs due to a workplace accident.

Accidents that occur while an employee completes a personal task not assigned by the employer or its representative are not workplace accidents.