Laos
Laos is a beautiful Southeast Asian country filled with great remote talent and, unfortunately, complex labor laws. If you’ve found someone in Laos you’d like to hire—but are less excited about the prospect of wading through legal jargon and thousands of dollars—you’re in the right place. Read on to learn the best way to hire someone in Laos.
Country snapshot
CURRENCY
Lao kip
EMPLOYER TAXES
6%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Lao (Official), French, English
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Laws about hiring are complicated, and the same is true in Laos. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in Laos, you have two real options when it comes to hiring. We’ll detail both below.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Laos than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Laos.
Employer tax
Social Security Contributions
Paid Time Off (PTO)
An employee is entitled to 15 days' paid annual leave per year, if they have both:
- An indefinite contract or a fixed-term contract of more than one year.
- Been employed for one full year.
Public Holidays
There are 7 public holidays.
Sick Days
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
- The law provides that, upon presentation of a medical certificate, employees are entitled to sick leave fully paid up to a maximum of 30 days each year.
- However, workers working on a daily or hourly basis under a specific employment contract are entitled to sick leave only if they have worked for more than 90 days for the same employer.
Maternity Leave
Female employees are entitled by law to receive full wages in case of maternity leave, which can range from 90 to 105 days, or 120 days in the case of multiple births.
In the event of miscarriage, female employees are also entitled to maternity leave, with the number of days to be determined by the attending physician.
Paternity Leave
Male employees are entitled to take at least three days' paid leave if their wife gives birth or miscarries (Article 58, Labour Law).
Parental Leave
Employees are entitled to up to 3 days of leave if the employee’s father, mother, spouse, or child is injured and hospitalized, and there is nobody to take care of them.
Other Leave
Jury Duty Leave and Voting Leave (Leave due to Public Interest) - Not specified by law.
Military Leave -Not Specified by law.
Marriage Leave
Not Specified by law.
Bereavement Leave
Employees are entitled to up to 3 days of paid leave if the employee’s father, mother, spouse, or child passes away.
Termination Process
The employment will be terminated when one of the following conditions is met:
- the expiration of the contract, or completion of tasks set out in the contract
- the death of the employee or the employer
- the termination of the company;
- the employee has been sentenced to imprisonment; or
- the employer and employee have provided mutual consent
There is no defined notification period for a fixed-term contract, and such terms are generally agreed upon in the employment contract.
With respect to an indefinite-term contract, each party may terminate the contract at any time provided notification is provided to the other party at least 30 days in advance for contracts involving physical labor employees, and at least 45 days in advance for contracts involving employees who use intellectual/special skills.
Alternatively, the employer can choose to make payment in lieu of notice to the employee who will be terminated.
The Labor Law provides for severance payments to be made for the following types of termination of employment:
- In the case of general unilateral termination of the contract, the severance value is 10% of the employee’s last wage multiplied by the number of months worked.
- In the case of unjustified unilateral termination of a contract, the severance value is 15% of the employee’s last wages, multiplied by the number of months worked, with no capped amount for severance payment.
- In the case of the death of an employee, the employer must pay 50% of the compensation that would have been received by the employee for general unilateral termination of the contract.
Notice Period
The notice period in Laos is:
There is no defined notification period for a fixed-term contract, and such terms are generally agreed upon in the employment contract.
Severance Pay
The Labor Law provides for severance payments to be made for the following types of termination of employment:
- The Labor Law provides for severance payments to be made for the following types of termination of employment:
- In the case of unjustified unilateral termination of a contract, the severance value is 15% of the employee’s last wages, multiplied by the number of months worked, with no capped amount for severance payment.
- In the case of the death of an employee, the employer must pay 50% of the compensation that would have been received by the employee for general unilateral termination of the contract.
Probation Period
Probation period may not exceed 30 days.
Working Hours
The Labor Law limits working hours to 48 hours per week.
Work that is performed beyond this limit will be considered as overtime.
Likewise, the law provides that an employee cannot work more than six days per week and eight hours per day.
Overtime
According to the Labor Law, overtime cannot exceed three hours per day or 45 hours per month.
In addition, an employee cannot work overtime for more than four consecutive days, except in emergencies.
Overtime wages differ according to the type of overtime, with the Labor Law providing different rates for different days and periods in which the overtime is performed (e.g. overtime on regular days, overtime at night, overtime on public holidays).
With respect to an indefinite-term contract, each party may terminate the contract at any time provided notification is provided to the other party at least 30 days in advance for contracts involving physical labor employees, and at least 45 days in advance for contracts involving employees who use intellectual/special skills.
%5B1%5D.avif)
Run your global workforce on autopilot with Thera
Book a demo to get started.