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Undoubtedly, payroll is a critical process for any organization. Pay cycle in Laos refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

The employer must pay the salary or wages to the employee at least once per month. 
For wages paid by the unit of production, wages must be paid to the employee at least twice per month. 

A 13th-month salary is not compulsory in the country. However, it is common for companies to give bonuses to their employees. 

Effective October 1, 2023 the new minimum wage is LAK 1,600,000 per month, up from LAK 1,300,000 per month.

An employer may request employees to work overtime, if necessary, subject to the prior consent of the trade union, worker's representative, or the majority of employees.  

Overtime shall not exceed 45 hours per month or three hours per day, but it is prohibited to work more than four consecutive days, except in the case of an emergency such as combating natural disasters or accidents that would cause significant damage. 

Unofficial translation of Labor Law, updated on 13 October 2014. 

When working overtime in any instance, the employer must notify and explain the necessity of the work to the employee in advance, as well as pay overtime wages as determined in this law.  

Where overtime is necessary for more than forty-five hours in any one month, the employer must first request authorization from the Labor Administration Agency, which is responsible for its labor unit, and receive approval from the trade union, workers' representatives, or the majority of employees in its labor unit.

The law provides that a data controller can retain electronic data for the necessary period for collection purposes or other purposes. Personal data may be deleted or inaccessible except otherwise specified in the law.

The data controller must delete electronic data collected as requested by the data subject or after the objective/purpose is terminated or the collection period has expired. They must also delete electronic data relating to national stability, security, social order, or data defamatory to other persons, as requested by the authority or concerned person.

Discrimination based on race, nationality, marital status, gender, HIV infection, and age is unlawful (Article 141, Labour Law). Male and female Lao and foreign employees who perform the same work are entitled to equal salaries and wages (Article 69, Labour Law). An employer's violation of the law entitles the employee to terminate their employment contract and receive severance pay (See Question 20, Severance payments). Employees can also bring a civil claim for damages. Contractual claims have a limitation period of three years from the date on which the cause of action arose unless the limitation period is suspended due to the circumstances listed in the Civil Code (Articles 49 to 62, Civil Code).  

The following documents are needed for onboarding an employee in Laos:

• First Name
• Last Name
• Address
• Email Address
• Telephone Number
• Education Certificate
• CV
• Job Position (if applicable)
• Client Company Name & Industry (If applicable)
• Tax Identification Number
• Social security number (New employee needs to enroll in social security institution)
• Passport
• Work Permit
• Labor Visa (LA-B2)

• After signing an employment contract with an employee, the employee may be placed under probation by the employer to evaluate whether the employee has or does not have adequate competence.  
• For unskilled work, the duration of the probationary period shall not exceed 30 days.  
• The probationary period shall not exceed 60 days for work requiring specialized skills. 

Employees have the right to rest on official holidays and receive their normal salary or wage as follows: 

Non-Transferable National Holidays 

• January 1:  New Year's Day
• January 2: Day off for New Year's Day 
• March 8:  International Women's Day (Women Only) 
• April 12:  Lao New Year Holiday
• April 13:  Lao New Year Holiday 
• April 14:  Lao New Year 
• May 1:  Labor Day / May Day 
• July 20:  Lao Women Union's Day 
• October 28:  Bouk Ok Pansa 
• October 30:  Day off for Bouk Ok Pansa 
• November 27:  That Luang Festival 
• December 2:  National Day 
• December 4:  Day off for National Day

Upon presentation of a medical certificate, workers are reimbursed monthly and shall be entitled to sick leave with full pay for not more than thirty days per year.  

Workers who work on a daily or hourly paid basis, per unit of production basis, or on the basis of specific work contracts will be entitled to payment during sick leave only if they have worked for more than ninety days.  

The provisions of this article shall not apply to sick leave from labor accidents or occupational diseases. 

Before and after giving birth, women workers shall be entitled to at least one hundred and five days of maternity leave; however, at least forty-two days of such leave shall be taken after giving birth. In cases of giving birth to twins, maternity leave shall be at least one hundred and twenty days. The employee shall receive full payment at the normal salary or wages during such a period.  

If, because of giving birth, a woman worker requires leave beyond the set number of days due to treatment and rehabilitation after giving birth, the employee has the right to receive subsidies as determined in the Law on Social Security.  

After giving birth, for a period of up to one year, female employees have the right to rest for one hour per day, care for their child or have the right to leave to take their child for vaccinations according to regulations. 

Female employees who miscarry will receive leave for a certain period per a physician's directions and will receive salary or wages as normal. 

Either party to an indefinite-term contract can terminate it at any time by giving the following:  

• 30 days advance notice for employees doing unskilled work. 
• 45 days advance notice for employees doing skilled work. 

Severance payments can apply when there is unjustified termination or no-fault-based termination.

Unjustified termination. The employee is entitled to a severance payment equal to 15% of their last monthly salary multiplied by the number of months worked for the employer, if the termination is:  

Any termination that should have been authorized by the LMA (Article 87, Labour Law).  

Any termination that is: without sufficient reason; because of the employer's direct or indirect abuse; or because the employer has made no change in response to the employee's or the employee's representative's prior protests, forcing the employee to resign.(Article 88 and 90, Labour Law)

No fault-based termination. The employee is entitled to a severance payment equal to 10% of their last monthly salary multiplied by the number of months worked for the employer if other circumstances exist that can justify the termination but are not the employee's fault (Article 90, Labour Law). 

Employees are also entitled to severance pay when they resign because:  

• They are in poor health after receiving treatment (evidenced by a valid medical certificate), and the employer has moved the employee to a new position but remains unable to work.  
• The employee has requested that the employer perform their contractual obligations multiple times, and the employer has failed to do so.
• Relocation results in the employee being unable to perform their duties. This must be certified by the trade union or employees' representative and village authority in writing (Article 83, Labour Law).
• They are being harassed in the workplace, and the employer does nothing to prevent it.(Article 82, Labour Law.)

The employee is not entitled to severance pay when:  

• They resign voluntarily (Article 80, Labour Law).  
• The employment termination is their fault (Article 86, Labour Law). 

Labor units that receive authorization to import foreign labor must register and apply for a work permit within one month from the day of receiving approval.  

A work permit will be issued at the same time as a work visa (LA-B2) and shall expire in accordance with the employment contract.

Registration and issuance of temporary work permits shall not exceed three months for labor imported for a probationary period, monitoring and evaluation of projects, or the  

installation and reparation of machinery in accordance with an equipment sales contract.

Foreign nationals require a visa. There are 14 types of work visas (Article 19, Law on Entry-Exit and Management of Foreigners in the Lao PDR). The two visas most used by foreign companies are the:

• Business Visa (NI-B2) for managing directors 
• Labour Visa (LA-B2) for employees 

If Lao nationals cannot supply the demand for labor, employers can request the Labour Management Authority's (LMA) permission to use foreign labor, subject to quotas (Article 68, Labour Law). The LMA also considers requests above the quotas on a case-by-case basis. There are no preferences given to nationals from certain jurisdictions. 

Procedure for obtaining approval. To apply for Business Visa (NI-B2), the employer must complete the following application forms:  

1. Temporary-entry visa (NI-B2).  
2. Stay permit.  
3. Multiple-entry visa (NI-B2).  

To apply for Labour Visa (LA-B2), the employer must complete the following application forms:  

1. Labour quota approval.  
2. Import of foreign labour approval.  
3. Temporary-entry visa (LA-B2).  
4. Work permit.  
5. Stay permit.  
6. Multiple entry visa (LA-B2). 

There are no restrictions on background checks by or on behalf of the employer.