Employ Candidates Compliantly in
Laos

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Global HR Compliance in Laos

Hiring workers in Laos requires a detailed understanding of local labour law, which is formal in structure but often informal in application. The framework for employment contracts, working hours, paid leave, and termination is clearly defined, but day-to-day enforcement varies, and local interpretation plays a significant role. Foreign companies hiring without a legal presence must be especially careful to avoid informal practices that could lead to non-compliance, labour disputes, or regulatory scrutiny.

Acumen International’s Global Employer of Record (EOR) services allows you to legally employ talent in Laos without setting up a local entity. We serve as the legal employer on your behalf, handling employment contracts, payroll, tax withholdings, statutory benefits, and compliance, while you retain control over the employee’s day-to-day responsibilities.

Why Companies Hire in Laos

Most companies hiring in Laos are driven by local project delivery, donor-funded operations, or the need for a minimal local presence to support broader Southeast Asian operations. Specific motivations include:

  • Delivering on-the-ground services for development, energy, logistics, or government-contracted projects
  • Hiring foreign or regional talent with niche skills — especially in tech, infrastructure, or education.
  • Meeting localisation requirements in cross-border commercial arrangements
  • Avoiding informal contractor structures, which pose tax, reputational, and employment risks
  • Entering or testing the market without committing to local entity formation.

Employment Contracts

Employment contracts in Laos must generally be in writing, especially for ongoing or formal work arrangements. However, verbal contracts may be allowed for short-term or low-volume tasks.

Key contract types:

  • Fixed-term contracts: Duration defined by agreement
  • Indefinite contracts: No specified end date
  • Task-based contracts: Valid until specific work is completed

Written contracts must include the job function, working hours, pay, leave entitlements, termination terms, and other relevant conditions.

Working Hours and Overtime

  • Standard hours: Maximum 8 hours/day, 6 days/week (up to 48 hours/week)
  • Overtime: Capped at 30 hours/month, with a maximum of 3 hours/day and not permitted on a continuous daily basis
  • Overtime beyond 30 hours/month requires approval from labour authorities and agreement from trade unions or worker representatives
  • Compensation must be paid at overtime rates as set out in the Labour Law.

Probation Period

  • Manual or non-specialised work: Maximum 30 days
  • Skilled or technical roles: Maximum 60 days
  • Probation may be extended once (up to 30 days) if the worker was absent due to illness or other valid reasons
  • During probation, employment may be terminated without full notice or severance, provided terms are followed.

Leave and Public Holidays

Annual Leave

  • Employees on indefinite or long-term fixed contracts (12+ months) are entitled to:
    • 15 days of paid annual leave
    • 18 days for jobs classified as hazardous or physically demanding
  • Public holidays and rest days are not counted toward annual leave.

Sick Leave

  • Employees with valid medical certification may take up to 30 days of paid sick leave per year
  • Those working under short-term or task-based contracts must have worked at least 90 days to qualify
  • Additional paid sick leave may be available via the social security system

Maternity Leave

  • Female employees are entitled to 90 days of maternity leave, with at least 42 days taken after childbirth
  • If complications arise, an additional 30 days may be taken at 50% pay, with doctor certification
  • For 12 months following childbirth, mothers may take 1 hour daily to nurse or care for their child.

Minimum Wage in Laos

As of the most recent adjustment, the national minimum wage is:

  • 800,000 Lao kip per month for private sector employees
  • Plus a 30,000 kip per day meal allowance where applicable
  • Higher wages apply for civil servants and public enterprise staff, often with additional housing or transport subsidies

Employers must pay wages on time and maintain records of payments and allowances.

Termination and Severance

Termination by Notice

  • Indefinite contracts:
    • Skilled roles: 45 days’ notice
    • Manual roles: 15 days’ notice
  • Fixed-term contracts:
    • Parties must notify each other 15 days before expiry if they wish to renew
    • If no notice is given and work continues, a new contract must be signed

Severance and End-of-Contract Rules

  • Severance may apply if the employer terminates the contract without cause
  • No severance is due if the contract ends by mutual agreement, task completion, or worker resignation
  • In the event of a worker’s death, the contract is automatically terminated.

How Acumen International Can Help You Hire in Laos

Employer of Record Without Local Incorporation
We legally employ your staff in Laos so you can operate compliantly without setting up a company.

Payroll Processing and Tax Compliance
We handle monthly payroll, deduct and remit income tax and social security contributions, issue payslips, and maintain payroll records in full alignment with Lao labour law.

Benefits Administration
We ensure all entitlements—such as paid leave, maternity benefits, sick days, and public holiday observance—are correctly granted and documented.

Legally Sound Employment Contracts
We prepare and manage locally compliant contracts tailored to your role requirements and internal policies.

Support for Task-Based or Project Roles
We help structure lawful employment for project-based work or short-term hiring needs — avoiding informal contractor arrangements and their associated risks.

Work Permit and Residency Support
For foreign nationals, we provide work permit sponsorship when required.

Cost Forecasting with Global Payroll Calculator
Use our Global Payroll Calculator to understand the full cost of employment in Laos, including salary, statutory benefits, and employer contributions.

Global Coverage with Local Insight
One partner across 190+ countries, providing central coordination and local compliance support where it matters.

Need to hire in Laos?
Contact us to explore your hiring options or request a compliant employment solution tailored to your goals.

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