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The document provides an overview of recent updates to Myanmar's labour laws, including the following:
- A new minimum wage law established a committee to determine sector-specific minimum wages and fines employers for non-compliance.
- A social security law requires employers with 5+ employees to enroll in the social security scheme with monthly contributions.
- Laws outline employee leave and holidays entitlements as well as limits on working hours and overtime pay requirements.
- A new employment law mandates employment contracts within 30 days and regulates terms, approval process, and penalties for non-compliance.
- Laws aim to increase skills training, regulate labour unions and strikes, and establish dispute resolution processes.
- Additional
The document provides an overview of recent updates to Myanmar's labour laws, including the following:
- A new minimum wage law established a committee to determine sector-specific minimum wages and fines employers for non-compliance.
- A social security law requires employers with 5+ employees to enroll in the social security scheme with monthly contributions.
- Laws outline employee leave and holidays entitlements as well as limits on working hours and overtime pay requirements.
- A new employment law mandates employment contracts within 30 days and regulates terms, approval process, and penalties for non-compliance.
- Laws aim to increase skills training, regulate labour unions and strikes, and establish dispute resolution processes.
- Additional
The document provides an overview of recent updates to Myanmar's labour laws, including the following:
- A new minimum wage law established a committee to determine sector-specific minimum wages and fines employers for non-compliance.
- A social security law requires employers with 5+ employees to enroll in the social security scheme with monthly contributions.
- Laws outline employee leave and holidays entitlements as well as limits on working hours and overtime pay requirements.
- A new employment law mandates employment contracts within 30 days and regulates terms, approval process, and penalties for non-compliance.
- Laws aim to increase skills training, regulate labour unions and strikes, and establish dispute resolution processes.
- Additional
Overview: Myanmar labour protection is a patchwork of many different labour
laws, most of which date back to the 1920s-1950s. There has been an effort by the Government in recent years to update the laws and provide stronger protection for the local workforce. As the Government rolls out new laws, it is important for employers to keep themselves updated with the new requirements. Below is the current status of labour protection laws in Myanmar. Wages : Under the new Law on Minimum Wages (2013), a National Committee, comprising representatives from the government, employers, and labour organizations, would be set up to determine the new minimum wages, which may vary from sector to sector. The law is unclear on whether commission and tips may be included in the minimum wage. Employers must conspicuously post the minimum wage notice and inform employees. Failure to pay minimum wage may result in up to 6 month imprisonment and/or up to 300,000 Kyat fine. Social Security: Social Security Law (2012) will become in force when the President issues a notification to such effect. No date has been set for such a notification. Currently, employers with 5 or more employees must enter into the Social Security scheme. Employers and employees monthly contributions are 2.5% and 1.5% of the employees salary, and are capped at USD 5 and USD 3 respectively. Employees not covered under social security may claim for compensation from the employer under Workmens Compensation Act (1923) for injuries resulting in death or permanent disabilities. Leave and Holidays: Employees are entitled to 6 days of casual leave, 10 days of earned leave, 30 days of medical leave, and an average of 21 public holidays per year with pay. Both casual leave and medical leave are granted based on needs. Employers may require employees to present a medical certificate for medical leave. Working Hours: For blue collar work, working hours are limited to 8 hours per day, 44 hours per week, and 6 days per week. The same hours apply to shops and offices, except the maximum working hours per week is 48. Beyond these hours, employers must pay overtime rate, which doubles that of ordinary wage. Overtime may not exceed 12 hours per week for blue collar work and 16 hours per week for offices and shops. Employment Contract: The new Employment and Skills Development Law (2013), which will become in force on 30th November 2013, requires that a work contract be signed within the first 30 days of employment. Important terms must be included in the contract (See Section 5(b) of the law). The employers must then send a copy to one of the 77 labour exchange offices for approval. It is still unclear whether the government will strictly enforce the contract approval process as the labour exchange offices may lack the manpower to review all the contracts submitted. The penalty for violating or failing to sign an employment contract is up to 3 or 6 month imprisonment, a fine, or both.
Training: New Employment and Skills Development Law aims to institutionalize
training and skill development as part of the national workforce planning. When the new law comes into effect, employers must contribute an amount equivalent to 0.5% of employees salary to Employee Skill Development Fund. In addition, employers must provide training in line with the policy of the Skill Development Team in the form of on-the-job training, systematic training program, or outside training, at employers expense. Employers may condition the training upon minimum employment term. Labour Organisation: After Labour Organisation Law was promulgated in 2011, there are now more than 500 registered labour unions. Union registration applications are examined by Township Registrar and approved by the Chief Registrar. There are 5 levels of labour organizations basic level (at least 30 members), township level, region or state level, federation level, and confederation level. Employers may not terminate employees for joining a union. Likewise, employees cannot be forced to join a union. Labour Dispute Resolution: Settlement of Labour Dispute Law (2012) provides an ascending system of dispute resolution. Employers with more than 30 employees must form a workplace coordinating committee, which helps resolve disputes initially. If no agreement is reached, the dispute may be escalated to the conciliation body, the arbitration body, and eventually the arbitration council. Parties may still sue in court during the administrative process. A strike or a lockout may be carried out only after the arbitration process fails. The law does not permit a strike by workers in essential services (water, electricity, firefighting, health, and telecommunications). Non-essential services may become essential if a strike drags on so as to give rise to disproportionate damages, preventing a lengthy strike. Workers in public utilities sector must notify employer and conciliation body of a strike at least 14 days in advance and continue to provide limited services during the strike. Employers likewise must notify employees at least 14 days in advance and also receive permission from the conciliation body before implementing a lockout. The notification period is shortened to just 3 days for other sectors. Employers do not have to pay wages during a strike and are entitled to take disciplinary measures against employees who participate in an illegal strike. Additional Requirements under Foreign Investment Law: Employers may not hire unskilled foreign workers. For an FIL company, 25% of its skilled workforce must comprise of Myanmar nationals within the first two years, 50% within the second two years, and 75% within the third two years. Visa and Work Permit: Foreign employees should obtain a business visa. Myanmar Embassies will issue a business visa with single entry twice before one with multiple entries the third time. The validity period for a business visa with multiple entries is 6 months or 1 year, although continuous stay may not exceed 70 days on each visit. Foreign employees staying long term should obtain a stay permit (for those staying longer than 70 continuous days), a multiple journey special reentry visa (for overseas travel during the stay permit validity period), and a foreigner registration certificate
(for those staying longer than 3 continuous months). Foreign employees in an
FIL company should obtain the same as well as a work permit. There is currently no work permit system for foreign employees in a non-FIL company. Conclusion: Employers should continuously update their employment policy to keep themselves in compliance. _____________________________________ This article was prepared by Siri Lerdsirisopon, senior associate at Vovan & Associes, No. 162, First Floor, 35th Street, Kyauktada Township, Yangon, P.O. Box 1126, Myanmar. siri.lerdsirisopon@vovan-bangkok.com