Overseas investors should heed labour law compliance in Laos

The National Assembly of Laos amended the 2006 Labour Law in 2013, which came into effect on 29 October 2014. The 2013 Labour Law is applicable to Laotian employees as well as foreign employees working in Laos.

Employees in Laos enjoy a high degree of protection, and in certain aspects the protection of employees in Laos is better than that in China. Below is a brief introduction on foreign employee ratio, salary, overtime and other provisions that may be of interest to investors from outside of Laos.

According to the 2013 Labour Law, the foreign employee ratio has changed from 10% of the total number of employees of the employer for manual labour (15% for skilled employees) in 2006, to 15% of the total number of employees of the employer for manual labour (25% for skilled workers) in 2014. For large-scale projects that last more than five years, the employer is able to negotiate with the government on the foreign employee ratio. For foreign employees, the term of the employment agreement should not exceed 12 months. The agreement is renewable, but in total, the work time must not exceed five years.

WANG JIHONG is a partner and WU ANJING is an associate at Zhong Lun Law Firm