The minimum wage for unskilled labourers working for private businesses is set to rise next year, from the current 348,000 kip per month to a new minimum of 626,000 kip.
For the average unskilled labourer, working eight-hour days and a 26-day month, this will translate to 24,076 kip per person per day or 3,009 kip per hour.
Officials from the Ministry of Labour and Social Welfare, Lao Federation of Trade Unions and Lao National Chamber of Commerce and Industry in Vientiane announced the minimum wage increase yesterday, which will come into effect on January 1, 2012.
The objective is to improve the livelihoods of lowest wage labourers working in the private sector, and to guarantee living standards in accordance with the current economic growth and rising cost of living, Director General of the ministry's Labour Management Department Mr Khamkhane Phinsavanh said.
He said the pay rise will go some way towards improving the living standards of unskilled workers over time and focus their skills and abilities to produce high quality goods and services.
Employers must pay the new wage to unskilled labourers who work a total of 26 days per month, six days per week and eight hours per day, and will be averaged per day if they work less.
The 626,000 kip minimum wage is separate from other benefits and conditions, and must be paid on top of any productivity bonuses, overtime allowance, lump sum payments, or food allowance, Mr Khamkhane explained. The new wage applies only to Laos-based private businesses, and not to people who work for government agencies or international organisations.
In the case of a business unit that already pays a wage equivalent to the new minimum wage of 626,000 kip per month, nothing will change. But all businesses currently paying their workers less than this will have to raise their salaries to the new level by the start of next year.
Employers who hire labourers to work with chemicals or poisonous substances, expose them to communicable diseases, require them to work with uranium or in remote areas, or be exposed to smoke or other hard or hazardous conditions that have the potential to affect their health must pay a danger allowance of 15 percent of their monthly wage, on top of the minimum.
Businesses that do not implement the new minimum wage by the start of next year will be subject to warnings, fines and possible criminal charges, Mr Khamkhane warned.