The Laos government’s announcement of the increase of the minimum wage took effect on 1 April 2015. The minimum wage in Laos was increased by 44 percent, from 626,000 kip (US$77) to 900,000 kip (US$111) per month.
In May 2015, the Laos’s Ministry of Labour and Social Welfare inspected business units in Vientiane Capital district to find out whether the government policy on raising minimum wage from 626,000 kip to 900,000 kip was being done in the district and whether provincial officials across the country had undertaken to similarly enforce it outside the capital. The ministry expects to complete its nationwide inspection by September of 2015, according to the Vientiane Times.
Mr Phongsaysack Inthalath, Director of Labour Management office in the Ministry of Labour and Social Welfare said, “..some companies have asked for the postponement of the new minimum wage payment to improve their payroll or be better prepared.” “The minimum wage only applies to workers working at production units, businesses or services of business and social sectors, and non-formal workers and domestic workers who are unskilled, inexperienced and possess no vocational qualifications.. Those with labour skills, professional skills, vocational qualifications must be paid higher pay or wage than the minimum wage”, he added.
The minimum wage of 900,000 kip has been calculated based on monthly expenses including rice, meat, fish, electricity and water. It is not calculated to ensure saving purposes or other expenses such as car buying or wedding invitations, reported the Vientiane Times.
Laos has a GDP of $10.8 billion (2014 estimated); GDP Growth: 7.4% (2014 estimated); Exports: $2.79 billion; Population: 6.8 million (with a tenth of the density of Vietnam); and the Monthly Manufacturing Wage is around $140. Landlocked and bordered by Myanmar, Vietnam, and Thailand, Laos is large but sparsely populated. Laos is attracting foreign investment, especially in response to its plan to export hydropower to the rest of Southeast Asia.