Employ Candidates Compliantly in Laos

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  1. Overview: Laos
  2. Global PEO and payroll
  3. Global HR Compliance
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Laos

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Laos Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Laos so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Laos, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Laos.

See the guide below for a general overview of labor rules and regulations in Laos. Or contact us if you need to employ workers in Laos or would like to get more details.

Hiring and Firing Workforce in Laos Guide

# Employment contracts

The employment of workers must be done through the conclusion of a written employment contract between the employer and employee, on the basis of the principle of equality and mutual agreement. An employment contract must be made in writing.

Apart from employment contracts which must be made in writing, in some cases an employment contract may be verbal, depending on the conditions and nature of the work, such as work on a daily basis and work of a small volume. An employment contract may be made either for a fixed term or for an indefinite period. The duration of a fixed-term employment contract shall depend on the agreement between the employer and the worker concerned.

# Minimum (Statutory) Employment Rules and Regulations in Laos

# Hours of work:
The hours of work of an employee in any labour unit shall be six days per week. Work should not exceed eight hours per day or forty-eight hours per week, irrespective of the type of salary or wages paid.

# Probation period:
An employer has the right to take on workers on a probationary basis in order to ascertain their ability to perform their duties. The duration of the probationary period is based on the nature of the work, as follows:

  • In respect of work that does not require experience in a specialised skill, such as: work primarily involving manual labour, the duration of the probation shall not exceed thirty days;
  • In respect of work requiring specialised skills, the duration of the probation shall not exceed sixty days.

Where during such probationary period a worker is absent from work for a certain period of time as a result of sickness or necessity, the duration of such absence shall not be counted as part of the probationary period. Where the worker continues to lack the skills for the work, the probationary period may be extended or the employer may not employ the worker. However, the extension shall not exceed thirty days.

# Annual leave:
Workers employed under an employment contract made for an indefinite period or for a period of more than one year who have worked for one full year shall be entitled to fifteen days of annual leave. Workers in sectors involving heavy work or work which is damaging to their health, as specified in article 25 of the Labour Law, shall be entitled to eighteen days of annual leave with full pay at the normal rate as when they were working. Weekly rest days and public holidays shall not be counted in annual leave.

# Parental leave:
Before and after birth delivery, women workers shall be entitled to at least ninety days of maternity leave with their full pay at the normal [rate] as when they were working from their employers or from the social security fund, if contributions have been fully paid to this fund. The period of maternity leave before and after birth must not exceed ninety days, however, the leave after the delivery of birth must be at least forty-two days. In the event that as a result of birth delivery a woman worker is ill and this is certified by a doctor, such worker shall be authorised to take additional leave of at least thirty days with payment of fifty per cent of her salary or wage. During the twelve-month period after birth delivery, the worker has the right to one hour per day of rest in order to feed or take care of her child if she brings her child to a nursery or to her workplace.

# Sick leave:
Upon presentation of a medical certificate, workers remunerated on a monthly basis shall be entitled to sick leave with full pay for not more than thirty days per year. This shall also apply to workers who work on a daily or hourly basis, on a per unit of production basis or on the basis of specific work contracts only if they have worked for more than ninety days. Where the period of sick leave exceeds thirty days, workers shall receive compensation under the social security system.

# Overtime:
An employer may request employees to work overtime if necessary, subject to the prior consent of the trade union or worker’s representatives and of the employees. Overtime shall not exceed thirty hours per month, except in the case of an emergency such as combating the effects of a natural disaster or an accident that would cause great damage to its labour unit. Each period of overtime shall not exceed three hours. It is prohibited to work overtime continuously every day. When necessary, before the employer gets the employees to work overtime, the employer must, in each case, first consult the trade union or worker’s representatives and notify the employees in the labour unit concerned explaining the necessity of overtime work, and shall fully pay them fair compensation for overtime as provided under Article 42 of this law. Where overtime is necessary for more than thirty hours in any one month, the employer must first request authorisation from the labour management organisation which is responsible for its labour unit and approval from the trade union or workers’ representatives in its labour unit.

# State minimum salary:
The Laos minimum wage is 800,000 Lao kip per month ($100) plus 30,000 kip per day as a meal allowance ($3.74) for private sector workers,1,400,000 kip ($170) per month for civil servants and state enterprise employees, often complemented with government benefits and housing subsidies. Laos’ minimum wage was last changed in January 2014.

# Employee dismissal:
An employment contract made for a fixed term or for an indefinite period may be terminated by agreement between both parties. An employment contract made for an indefinite period may be terminated by either party, provided that the other party is given at least forty-afive days’ notice in respect of skilled work and fifteen days for work that is primarily manual. The parties to a fixed-term employment contract shall notify each other [whether they wish to terminate the contract] at least 15 days prior to the expiry of such contract. Where they wish to continue to work [together], they shall sign a new employment contract. An employment contract that is based on the volume of work may be terminated only upon the completion of such work. An employment contract shall be terminated on the death of the worker.

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