Country Information

Officially known as Lao People’s Democratic Republic, Laos is a landlocked country in Southeastern Asia. The official language is Lao. The Asian country is heavily reliant on foreign investment and trade with China. The country’s main exports are wood, textiles and rubber.

Employment Contracts

An employment contract in Laos must be in writing and signed by both parties. The contract can be either for a fixed term or an indefinite period. Fixed-term contracts can be for a duration period of up to three years. Contracts with a duration exceeding three years are treated as indefinite contracts. Fixed-term contracts may be extended by providing notice no later than 15 days before the expiration of the contract. The contract must highlight the terms and conditions of the employment such as the probationary period, wages, leaves, benefits or any welfare entitlements that an employee will receive at the time of the expiration of the employment.

Working Hours

The standard work week is 48 hours over six days.

Sick Leave

Employees paid monthly receive 30 days of paid sick leave annually. Employees paid on a daily or hourly basis, per unit or per specific work contract receive 30 days of paid sick leave if they have worked at least 90 days. Employees must present a medical certificate.

Employees also receive three days of personal leave:

  • For the injury or death of a parent, spouse or child
  • To get married
  • For the birth or miscarriage of a child
  • If impacted by a natural disaster
Maternity/Paternity Leave

Female employees receive at least 105 days of fully paid maternity leave. At least 42 days of the leave must be taken after birth. Maternity leave is increased to 120 days for the birth of twins. Employees may be eligible for additional leave under Laos’s social security system. Female employees receive one hour of rest per day to care for a child for up to one year following the birth. In cases of miscarriage, the mother is entitled to take paid leaves for a period suggested by the doctor. There is no statutory paternity leave.

Compensation

The minimum wage in Laos is determined by the country’s labor law. It is a uniform pay rate that applies to all employees. The law is silent with respect to bonuses in Laos. However, if bonuses are to be provided, the provisions should be spelled out in an employment contract or collective agreement.

Vacation Leave

In addition to public holidays (official and customary) and rest periods, employees receive 15 days of paid annual leave after one year of consecutive service. Employees who perform work dangerous to their health, as defined in Article 51 of the Labor Code, receive 18 days of annual leave a year.

Dangerous work includes:

  • Work that exposes employees to radiation, dangerous communicable diseases, hazardous vapors or smoke, or dangerous chemicals or materials (e.g., explosives)
  • Employment in pits, underground tunnels, under water or at high elevation
  • Work in extreme climates
  • Direct and consistent work with vibrating equipment

Employers set the dates of annual leave in advance or pursuant to agreement with the employee. Employees are entitled to pay for unused leave if unable to take the leave for reasons stemming from the employer.

Public Holidays

Under Article 55 of the Labour Code in Laos, employees are entitled to a paid day of rest on the following official holidays:

  • International New Year
  • International Women’s Day for female employees
  • The Lao New Year Festival
  • International Labor Day
  • National Teachers Day, for teachers and education management only

Non-Laos citizens are entitled to their respective national holidays. If an official public holiday falls on a weekly rest day, which is generally Sunday, employees are entitled to another day as a substitute. The Prime Minister’s Office can announce additional public holidays. Further, employers and employees can agree to customary holidays. The following days may be considered as holidays:

  • Buddhist All Saints’ Day
  • Laotian National Army Day
  • Laotian New Year (Water Festival)
  • Birth, Enlightenment and Death of Buddha
  • Visakhabousa Day
  • Buddhist Lent Beginning
  • Rice Growing Day
  • Rice Donation Day
  • End of Buddhist Lent
  • Boat Racing Day
  • That Luang Festival
  • Laotian Constitution Day
Health Insurance Benefits

There are multiple healthcare programs in Laos. Employees in the public and private sector receive benefits through social security. Employees, their spouses and children are eligible for medical benefits through social security. The individual may be responsible for co-payments for certain treatments.

Employment / Termination / Severance

Employment contracts can be terminated at the end of the contract period (if for a fixed term), by the employer or the employee.

  • Causing deliberate damage to the employer
  • Violating employer rules or terms of the employment contract after receiving a warning
  • Neglecting work for four consecutive days without a reason
  • Being sentenced to prison
  • Violating the rights of other employees after receiving a warning

Both the employer and employee can terminate an employment contract during the probation period by giving three days of notice (manual labor) or five days of notice (specialized skill work). The probation period cannot exceed 30 days for positions involving manual labor or 60 days for positions that require a specialized skill. Employers must notify the employee in writing no later than seven days before the expiration of the probation period whether the employment relationship will continue or end. Upon termination, the employer must pay the employee any wages and remunerations owed under the contract.

Local Laws & Regulations

We understand that local laws and regulations change and sourcing an accurate reference guide is not easy. Our data is researched and verified by our team of local international Employment Attorneys, HR and Benefit Professionals and Tax Accountants through our Atlas team and consultants, to ensure information up-to-date and accurate.

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