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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).

In Laos, probationary periods are not mandatory. Employers may hire employees on a probationary basis to determine their competency to perform the required duties. The maximum period is 30 days for work that does not require specialized skills and 60 days for work that requires a specialized skill set. An employer may extend the probationary period up to 30 days if an employee continues to struggle with the skills needed for the work.

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.

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.

Visas

Laos issues the following visas:

• Diplomatic visa (D-A1)
• Official visa (S-A2)
• Spouse visa (SP-B3)
• Courtesy visa (C-B1)
• Tourist visa (T-B3)
• Short-term visa (NI-B3)
• Long-term visa (I-B3)
• Permanent visa (P-B3)
• Expert visa (E-B2)
• Transit visa (TR-B3)
• Business visa (NI-B2 or I-B2)
• Student visa (ST-B2)
• Media visa (M-B2)
• Labor visa (LA-B2)

Laos has visa exception agreements with 36 countries.

Work Permits

Foreigners who wish to work in the Lao PDR must obtain a work permit from the Ministry of Labor and Social Welfare. Work permits can be renewed for 12-month intervals. The employee's total work period may not exceed 5 years. Work permits are issued simultaneously with the work visa and expire with the employment contract. The employer must register the permit application within 1 month of authorization.

Foreign workers must meet the following requirements to work in Laos:

• At least 20 years old
• Possesses the requisite skills and professional level for the position
• No criminal record
• Be in good health
• Any other necessary requirements

The following documents are required when applying for a work permit:

• A passport valid for a minimum of 6 months from departure
• Signed and completed visa application
• 2 recent passport-size color photographs
• The employing company's appointment letter or cover letter printed with the company's letterhead
• Bank statements for the previous 3 months
• Other travel documents
• Proof of a round-trip ticket in case of a short trip