Myanmar

Increase to Minimum Wage in the Private Sector

The National Committee for Setting the Minimum Wage issued Notification No. 1/2024 on 9 August 2024, entitling private sector workers to an additional daily allowance of MMK 1,000. This increase is in addition to the existing MMK 1,000 daily allowance introduced in the previous year. Employers with a workforce of 10 or more are now required to provide a base daily minimum wage of MMK 4,800 plus additional daily allowances totalling MMK 2,000, making the minimum wage is MMK 6,800 per day. This change took effect on 1 August 2024. Employers must comply with these changes and ensure that the additional allowances are paid to each employee as specified in the notification. Failure to pay the prescribed minimum wage may result in the individual(s) responsible for managing worker remuneration on behalf of the employer (i.e. a director or manager) facing imprisonment for a term not exceeding six months, a fine not exceeding MMK 300,000, or both, pursuant to section 25 of the Minimum Wage Law.

Enforcement of National Conscription Law

On 10 February 2024, the State Administration Council (SAC) enforced the National Conscription Law (Public Military Service Law of 2010). This law mandates military service for male Myanmar citizens aged between 18 and 35 and female citizens aged between 18 and 27 (excluding married women and women with children, even if divorced, as well as people with permanent disabilities or members of religious orders). Additionally, experts and professionals such as medical doctors, engineers and other skilled individuals are required to serve if they are male and aged 18 to 45, or female and aged 18 to 35. The duration of military service is up to 24 months, extendable to 36 months for experts, and up to five years in a state of emergency.

Employers are not explicitly required to continue paying salaries of employees called to military service. Instead, the military service period is recognized as duty time for public servants, with provisions for re-employment after the service term. Penalties for evading national service include imprisonment for up to three years, fines, or both. Employers who fail to re-employ their employees after the completion of their military service term are also subject to the same penalties. In addition, the National Conscription Rules are expected to be enacted soon. As a result, it is essential to closely monitor developments to determine the ultimate impact on labour and employment matters.

Amendment to the Minimum Wage

On 9 October 2023, the National Committee for Setting the Minimum Wage issued Notification No. 2/2023, introducing amendments to the minimum wage. According to the notification, employers with 10 or more workers are now mandated to pay a daily minimum wage of MMK 4,800, along with an additional daily allowance of MMK 1,000. These additional allowances must be explicitly categorized and paid under the title of “additional allowances,” from 1 October 2023. Commencing 1 October 2023, the enhanced daily allowance of MMK 1,000 applies not only to regular working days, but also to leave days and holidays as granted under the Leave and Holidays Act of 1951. The Ministry of Labor (“MOL”) confirmed that the minimum daily wage for workers remains fixed at MMK 4,800 for an eight-hour workday, together with an entitlement to an additional daily allowance of MMK 1,000, with overtime pay continuing to be computed based on the MMK 4,800 rate. However, the provision regarding overtime pay has led to some controversy regarding the computation, with some stating that overtime should be calculated at an hourly rate of MMK 5,800. Based on a plain reading of the provisions, however, the hourly rate calculated using the MMK 4,800 figure appears to fit the requirements.

Introduction of Labour-related Policies

To mitigate the impact of COVID-19 in Myanmar, the Government announced a number of labour-related policies to relieve distress in particular matters. On March 20, 2020, Myanmar's Social Security Board announced that it will allow employers to make social security payments quarterly, instead of monthly, due to the hardship businesses are facing due to the COVID-19 pandemic. Myanmar's Social Security Board also provided 40% of social security contribution for June 2020 to any insured person who works for private industry or factory as a family assistance fund.

Moreover, the Ministry of Health and Sport announced Orders No. 107/2020 dated September 20, 2020, and No. 108/2020 dated September 22, 2020, for employees of organizations and companies to apply work-from-home criteria, except for employees of certain essential businesses, for example, financial services, food production, medical supplies, etc.

New Occupational Health and Safety Law

Myanmar's new Occupational Health and Safety Law ("Law") was recently enacted and is aimed at the development and implementation of workplace health and safety measures, including the reduction and elimination of workplace accidents, diseases and other occupational hazards. Prior to the enactment of this new Law, there was no specific legislation in Myanmar governing occupational health and safety. The National Occupational Health and Safety Council of Myanmar will be established to facilitate the administration of the Law.

The Law introduces a requirement for certain enterprises to register with the Factory and General Labour Laws Inspection Department, and for such enterprises to appoint an Occupational Health and Safety Manager or Committee. The Law sets out the obligations of employers and employees. Enterprises and employees in Myanmar must take note of the requirements under this new Law as non-compliance will be subject to administrative actions, or imprisonment and/or a fine.