Laos is a developing nation with a steadily improving economy and growing foreign investment. In recent years, the country has experienced growth in sectors such as hydropower, tourism, and manufacturing, making it an attractive destination for companies expanding into Southeast Asia. 

As demand for local talent increases, businesses need to hire strategically to ensure sustainable growth. Implementing a probationary period, as permitted under the Laotian labour law, can help employers and employees assess mutual compatibility before making long-term commitments.

Definition of a Probation Period in Laos

A probation period is a trial phase at the start of employment, regulated by the Lao Labour Law, 2013. It allows employers to evaluate an employee’s performance, attitude, and skills, while giving employees the chance to decide if the role and work environment meet their expectations. 

The terms and duration of probation must be clearly stated in the employment contract. If not specified, the employee is considered permanent from the first day, and the employer cannot later impose a probation period.

Lengths of Probationary Periods in Laos

In Laos, the maximum duration of probationary periods depends on the nature of the role. For general, non-skilled labor roles, it is limited to 30 days, with either party required to give five days’ notice for termination. 

For positions involving technical or specialized skills such as programming, engineering, drafting, or healthcare, the probation period may last up to 60 days, with a minimum three-day notice required.

The applicable duration must be clearly stated in the employment contract. If this period ends without termination, the employee is automatically considered permanent under Lao law.

Permanent or Indefinite Contracts

Probation phase under indefinite contracts follows the same legal limits, 30 days for general roles and 60 days for technical or specialist roles. If neither party terminates the agreement, the contract automatically continues. This will grant the employee full rights and protection under the Lao labor laws.

Employers may not extend probation beyond the legal maximum.  Additionally, they are not allowed to repeatedly renew short-term contracts to avoid the obligation associated with permanent employment.

Fixed-term or Definite Contracts

In Laos, definite contracts are commonly used for seasonal or project-based work. They are subject to the same probationary rules as permanent employment. The terms and duration of the probation should be clearly stated in writing. 

For roles shorter than three months, the probation phase can last up to  30 days. Moreover, for positions involving specialized skills under contract lasting between 3 and 12 months, the probation phase may be up to half the contract’s duration.

However, it must not exceed 60 days. The employee remains in the role until the contract ends, and probation cannot be extended.

Legal Considerations for the Probation Period in Laos

Laos’ labor law outlines clear regulations for probation. The trial phase must be mutually agreed upon in writing and cannot be imposed on an existing employee through verbal agreement.

During this initial assessment phase, the employee is entitled to the same legal rights and protections as permanent staff. These include access to social security, safe working conditions, and protection against discriminatory dismissal. 

Employers must be aware that the law prohibits the repeated use of short-term contracts with new probation to avoid long-term employment commitments.

Pay and Working Conditions

Probationary employment in Laos is governed by the same minimum employment standards as regular employees. As of early 2026, the national statutory minimum wage remains LAK 2,500,000 per month, a rate introduced in 2024 and still in force. Employers must pay at least this statutory minimum wage, including to employees on probation. However, actual wages, especially in foreign investment projects, are usually higher. 

Standard working hours are eight hours per day and 48 hours per week. Overtime is limited to three hours per day and 45 hours per month, and must be compensated at 1.5 times the employee’s regular rate. 

Probationary employees are also entitled to social insurance contributions, including pension, health care, and unemployment funds. Employers may not withhold these entitlements simply because the new hire is on probation. 

Termination and Notice

Probation period simplifies the termination process if a new hire proves unsuitable. The employer may dismiss probationary employees at any time, without needing to provide a reason, except in cases of a discriminatory or unlawful termination. 

Unlike permanent employment contracts, probationary roles require shorter notice periods. For a trial phase of up to 30 days, the employer must provide at least five working days’ written notice.  For periods of up to 60 days, at least three working days’ written notice. 

Probationary employees are not entitled to severance pay unless the termination is found to be unlawful. These notice requirements also apply when a new hire wishes to resign during probation.

Vacation / Holidays

Probationary employees in Laos are not entitled to annual vacation leave. This benefit applies only to employees who have completed at least one full year of service under a fixed-term or indefinite employment contract.

Full-time employees are entitled to a minimum of 15 days of paid annual vacation leave, or 18 days if their work is considered heavy or dangerous work. Moreover, all employees are entitled to national holidays, the Lao New Year, National Day, and the Boun That Luang festival, among others. 

When a public holiday falls on a workday, the employer must provide either a substitute day off or compensate the employee at twice their normal daily wage.

Benefits of Probation Periods in Laos

Probation periods in Laos are designed to give both the employee and employer an opportunity to evaluate whether the role and working relationship are a good long-term fit.

  • For Employees

The probation phase offers employees a low-commitment opportunity to experience the actual job, assess the workplace environment, and understand the company culture before entering into a long-term commitment.

If the position did not meet their expectations, whether due to managerial style, compensation, or other factors, they may resign with a short notice period, as permitted under probationary rules.

  • For Employers

Employers use a probation period to assess a new hire’s performance, skills, attitude, and overall suitability for the role. If the new hire does not meet expectations, the employer can terminate the contract with minimal notice and without the formal procedure that applies to permanent staff.

Conclusion

For businesses new to the Laotian market, understanding and implementing labor laws, particularly around the probationary period, is crucial. At Remote People, we take care of employment compliance, paperwork, and contracts, allowing your company to focus on expanding with confidence.

Frequently Asked Questions

The maximum length is 30 days for general workers, and up to 60 days for technical or specialist roles. 

Yes. Employers must pay new hires no less than the national minimum wage of LAK 2,500,000 per month.

Yes. The employer may terminate the probationary employee, provided the reason is not discriminatory.  Written notice of at least 3 to 5 working days is required, depending on the job type.