Laos, officially known as the Lao People’s Democratic Republic, is a country in Southeast Asia, bordered by Myanmar, China, Vietnam, Cambodia, and Thailand. Of its 7.8 million population, the labor force in Laos is estimated at 4 million people (2022), with a GDP of 15.84 billion.

The economy in Laos is a developing economy, reliant on investment and trade with neighbouring countries such as China, Thailand, and Vietnam. Agriculture (particularly rice), industry, and services make up the majority of Laos’ income, and it faces challenges such as high debt levels and macroeconomic instability. 

Laos is committed to providing protective employee benefits to all workers in Laos, with a focus on maintaining a competitive minimum wage and ensuring basic needs around holiday pay, maternity leave, and working hours are met. This help guide will provide all the information needed to employ in Laos, from an overview of Laotian labor law the the mandatory employee benefits that must be offered. We’ll also explain how RemotePeople can help make hiring in Laos an easier process.

Laos Employment Laws

Laotian labor law is largely determined by the Labour Law of 2013. The law consists of 181 articles, separated into 17 sections, which outline the obligations and rights of employers and employees to ensure a safe, fair working environment.

Several key periods and acts that inform the labor law in Laos include:

  • Pre-1975 Royal Lao Government Statutes (1955, 1967, and 1971)
  • Post-1975 LEO PDR Establishment
  • 1986 Economic Reforms
  • 1991 Constitution of Laos
  • 1994 Labour Law
  • 2013 Labour Law

If you’re looking to employ in Laos, it’s strongly recommended that you seek advice from a legal professional to ensure that your employment business practices comply with all Laotian labor laws.

Mandatory Employee Benefits in Laos

We’ve included below thorough details on all mandatory employee benefits that must be adhered to in Laos.

Social Security Contributions

The Laos Social Security Organisation, officially known as the Lao People’s Democratic Republic (PDR), is a system in which employers must register their employees to permit them to receive social security benefits.

Both employers and employees must make contributions towards social security at the following rates:

Contributor
Contribution Rate
Employers
6%
Employees
5.5%

Social security benefits permitted to insured people include:

  • Health Insurance
  • Sickness Benefit
  • Labor Loss Benefits
  • Retirement Benefits
  • Death Benefits
  • Family Member Benefits

Annual Paid Leave

Employees in Laos become eligible for annual paid leave once they have worked continuously for an employer for 1 year.

Annual leave consists of 15 days of fully paid leave per year or 18 days for employees working in sectors that are deemed dangerous to health.

Weekly rest days and public holidays are not counted in an employee’s annual leave allowance.

3 days of paid personal leave can be taken by employees in the following circumstances:

  • An employee’s father, mother, spouse, or children are injured or hospitalized, and there’s nobody to care for them
  • An employee’s father, mother, spouse, or children pass away
  • An employee marries
  • An employee’s wife has a baby or suffers a miscarriage
  • An employee’s life is impacted by a natural disaster

Working Hours

Normal hours of work in Laos are 8 hours per day or 48 hours per week, usually spread over a maximum of 6 days per week.

Employees should receive a rest break of 1 hour, which must not be included in their hours of work.

A maximum of 36 hours a week should be worked if an employee’s occupation meets the following circumstances:

  • Exposes an employee to radiation or dangerous diseases
  • Exposure of an employee to hazardous vapors or smoke
  • Directly exposing an employee to dangerous chemicals or materials
  • Involves working in pits, underground tunnels, underwater, or at high elevations
  • Involves working in extreme temperatures
  • Involves working with constantly vibrating equipment

Night workers in Laos typically work between the hours of 10 pm – 6 am and may be entitled to earn an overtime rate dependent on the industry – this must be at least 15% of an employee’s typical hourly wage.

National Minimum Wage

The minimum wage in Laos is 2,500,000 LAK as of 1st January 2026.

This rate is determined by the Lao government via the Ministry of Labor and Social Welfare department.

Overtime Pay

Employees may be requested to work hours over their contracted amount – these hours count as overtime.

Overtime mustn’t exceed 45 hours per month or 2 hours per day. If overtime must exceed 45 hours per month, an employer must seek authorization from the Labor Administration Agency.

Pay for overtime hours worked should be calculated as per the following:

Overtime Period
Pay Rate
Work day (5 pm – 10 pm)
150% of normal hourly rate
Work day (10 pm – 6 am)
200% of normal hourly rate
Weekly rest day or official holiday
250% of normal hourly rate
Weekly rest day/official holiday (4 pm – 10 pm)
300% of normal hourly rate
Weekly rest day/official holiday (10 pm – 6 am)
350% of normal hourly rate

Public Holiday Leave

Public holidays in Laos are considered paid days off and do not count toward annual leave entitlement. The public holidays in Laos are as follows:

  • New Year’s Day (January 1)
  • International Women’s Day – Women Only (March 8)
  • Leo New Year (April 14–16)
  • Labor Day / May Day (May 1)
  • Lao Women’s Union Day (July 20)
  • Day off for Lao Women’s Union Day (July 21)
  • National Day (December 2)

Sick Leave

Employees in Laos are entitled to paid sick leave, provided that they can show their employer a medical certificate.

A maximum of 30 days of sick leave may be taken each year, however, employees working on a daily/hourly basis must have worked continuously for the same employer for a minimum of  90 days. 

Sick leave is not applicable for absences due to labor accidents or occupational diseases.

Maternity Leave

Female workers in Laos must be given a minimum of 105 days of maternity leave at full pay, with at least 42 of these days being taken after birth.

If a woman gives birth to twins, she can take at least 120 days of maternity leave at full pay.

Women are entitled to 1 hour per day to rest, care for their child, or take them for regulatory vaccinations in the first year after birth.

Paternity Leave

Paternity leave is not a statutory requirement for workers in Laos whose partners have had a baby. However, they may be eligible for personal paid leave, which consists of 3 paid days off.

Pensions

The PDR provides a pension scheme covering old-age pensioners, invalidity, and survivors’ pensions.

Workers can retire at the age of 60 for men or 55 for women and must have at least 15 years of contributions (25 years for civil servants, police, and military personnel).

Laos also has pension options for private sector employees, which are usually point systems that provide employees with an income upon reaching retirement age.

Severance Pay

If an employment contract is terminated at no fault of the employee, they are entitled to compensation for the cancellation of the employment contract.

For unjustified termination, employees must be paid 15% of their last salary multiplied by the total number of months they have worked for the company by their employer.

Employees who work by unit of production or are paid unspecific wages must receive an average of their last three wages.

Supplementary Employee Benefits in Laos

Employers should consider offering their employees supplementary benefits to improve job application rates and increase staff retention.

A few examples of attractive supplementary benefits include:

  • Health insurance
  • Enhanced paid leave
  • Wellness programs
  • Childcare assistance
  • Training opportunities
  • Performance bonuses
  • Meal, transport, and housing allowances

Optimize Employee Benefits with RemotePeople

RemotePeople are experts in simplifying employment in Laos through our Employer of Record (EOR) services.

Our EOR solution can handle contract negotiation, staff hiring, onboarding, and essential HR tasks such as payroll, taxes, and employee benefits—making the hiring process in Laos significantly easier and fully compliant with local labor laws.

We can also help you to hire new workers directly via our Laos recruitment services. We have a highly experienced team that understands the local language, customs, and ongoings of the Laotian recruitment space, which can give your company a significant advantage when hiring in Laos.

Contact us today to learn how we can help your brand get the best out of doing business in Laos.