Inassociationwith

UMyint Lwin LawOffice

an association of independent
law firms in 60 countries

AFMABreakfastTalk
EmploymentinMyanmar
20September2013
Siri Lerdsirisopon
SeniorAssociate
siri.lerdsirisopon@vovanbangkok.com
Vovan&Associes UMyint Lwin LawOffice

Overview

Myanmarworkforce:33.41million(2012)

Employment
Agriculture
Industrial
Construction

Services

Salary(2012):
Typeofworkforce

Average MonthlySalary(USD)

Unskilled

100

Semiskilled

150

Supervisors/TeamLeaders

200300

Universitygraduateswithknowledge
U
i
i
d
i hk
l d
300 00 dependingonexperience
300500
d
di
i
ofcomputerandEnglishVovan&Associes UMyintLwinLawOffice

LegalFramework

Thereisnoonecomprehensivelabour lawinMyanmar
Currentlabour laws:
EmploymentRestrictionAct(1959)
Employment
Restriction Act (1959)
EmploymentStatisticsAct(1948)
EmploymentandSkillDevelopmentLaw(30Aug2013replacingEmployment
and Training Act (1950))
andTrainingAct(1950))
FactoriesAct(1951)
LaborOrganizationLaw(11Oct2011replacingTradeUnionsAct)
LeaveandHolidaysAct(1951)
y
LawonMinimumWages(March2013replacingMinimumWagesAct(1949))
OilfieldsLaborandWelfareAct(1951)
PaymentofWagesAct(1936)
ShopsandEstablishmentAct(1951)
WorkmensCompensationAct(1923)
LaborDisputeSettlementLaw(28Mar2012replacing1929version)
SocialSecurityAct(1954)
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Government
SocialSecurity
Board

Department
ofLabour

Central
InlandFreight
Handling
Committee

Ministry
ofLabour
CentralTrade
C
t lT d
Dispute
C
Committee
itt
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Factoriesand
General
General
Labour Laws
Inspection
Inspection
Department
4

Recruitment
TownshipLabour Office
*NewEmployment&Labour ExchangeOfficetobesetup

EmploymentAgency

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EmploymentContract

GenerallymustbeapprovedbyMinistryofLabour
Generally
must be approved by Ministry of Labour forforeigncompanies
for foreign companies
hiringMyanmarnationalstoensurecompliance
NewEmployment&Labour ExchangeOfficetobesetupandtakeoverthe
approvalprocess
Department of Labour publishesanemploymentlawbookletthatcontainsa
DepartmentofLabour
publishes an employment law booklet that contains a
samplecontract
Basicterms:

Scopeofwork

Locationofwork

Salary

Overtime

E l
Employmentperiod
i d

Workinghours

Holidays

Leave

Termination
Violationofemploymentcontract:imprisonmentnotexceeding3months,or
fine,orboth
Vovan&Associes UMyintLwinLawOffice

Wages

MustcomplywithLawonMinimumWages(2013)
Previouslegalminimumwage:USD15permonth
Marketrate:USD7080permonth
Underthenewlaw,aNationalCommittee,comprising
representativesfromthegovernment,theemployers,
t ti
f
th
t th
l
andthelabour organisations,wouldbesetupto
g
determinethenewminimumwages
Theminimumwagewillbebasedonsectors
Employersmustinformemployeesofthenew
minimumwageandhaveitprominentlyposted
Paydiscriminationbasedongenderisprohibited
Vovan&Associes UMyintLwinLawOffice

SocialSecurity

MustcomplywithSocialSecurityAct(1954)
M
t
l ith S i l S
it A t (1954)
Employerwith5ormoreemployeesmustentertheSocialSecurity
InsuranceScheme
Employerssdutytodeductanddeliverthepayment
Employer
duty to deduct and deliver the payment
Contributions:
Payer
Contribution
MaximumContribution
Employer

2.5%

USD 5

Employee

1.5%

USD 3

Benefits:Freemedicalcare,freematernitycare,sicknesscash
benefit,maternitycashbenefit,funeralgrant,disabilitybenefit(due
toworkrelatedaccidents),survivorpension
New Social Security Law of 2012 not yet in force
NewSocialSecurityLawof2012notyetinforce
WorkmensCompensationAct(1923):stipulatescompensationthat
Employermustpayifworkersufferingfromdisabilityordeathdueto
p
j y
y
workplaceinjuryisnotcoveredunderSocialSecurityAct
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Trainingg

MustcomplywithEmployment&SkillDevelopment
Law(30Aug2013) tobecomeeffectivein3months
Employersobligations:

makemonthlycontributionintheamountequivalenttoat
least0.5%ofemployeessalarytotheEmployeeSkill
DevelopmentFund(cannotbedeductedfromemployees
salary)
providetrainingtoemployeesinlinewithpolicyoftheSkill
DevelopmentTeam(onthejobtraining,systematictraining
program outside training and/or computerized training)
program,outsidetraining,and/orcomputerizedtraining)

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LeaveandHolidays
y

MustcomplywithLeaveandHolidaysAct(1951)
Employeesentitlements:
PaidAnnualLeave

NumberofDaysAllowed

Casual leave
Casualleave

6 days
6days

Earnedleave

10days

Medical leave

30days

Publicholidays

21daysonaverage

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10

WorkingHours

Applicablelaws:FactoryAct(1951);ShopsandEstablishmentAct
(1951)
Working hours:
Workinghours:

Industry

MaximumWorking
Hours

MinimumRest
Period

Hours Hours Days

per
per
per
Day
Weekk Weekk
Factoryand
industrialwork

Office andshops

44
48

6
6

Maximum
Overtime
Overtime
Hoursper
week
12

30mins after5
hoursofwork

16

Overtime rate is double that of ordinary wage

Overtimerateisdoublethatofordinarywage
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11

TerminationofEmployment

EmploymentinMyanmarisnotatwill.
Employermustpayseverancetoterminatedemployees
Severance payment amount:
Severancepaymentamount:
LengthofService

Severance Pay

Less than3months
than 3 months

1 monthsssalary
1month
salary

3months 1year

2monthssalary

13 yyears

3monthssalaryy

Morethan3years

5monthssalary

Exception:ifemployeewillfullyresigns,orifemployeeengagedin
p
p y
y
g ,
p y
g g
actionthatdamagesemployersreputation
MinistryofLabour toannouncenewseverancepayinaccordance
with Employment and Skill Development Law
withEmploymentandSkillDevelopmentLaw
Vovan&Associes UMyintLwinLawOffice

12

WorkplaceHealthandSafety
p
y

Moreapplicabletofactoriesandindustrialwork
Requirements depend on the industry involved
Requirementsdependontheindustryinvolved
Oil&Gas:MICdirectivesonenvironmentalprotection
Mining: Mining Law on working conditions, safety,
Mining:MiningLawonworkingconditions,safety,
health
Factories:FactoriesActonhealthandsafetystandards
y
Newworkplacesafetylawisexpectedin2013
accordingtothegovernment

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13

Labour Disputes
p

Labour DisputeSettlementLaw(2012)applies:
Resolution Body
Description
Workplace
Coordinating
Committee

Requiredforemployerofmorethan30employees
Promotegoodrelationship
Grievancesnegotiatedandsettledwithin5days

ConciliationBody

Townshiplevel(formedbyregionorstategovernment)
To conciliateadisputewithin3days
Withoutsettlement,individualdisputescanmovetocourt
,
p

DisputeSettlement
ArbitrationBody

Region/State/Divisionlevel(formedbyMinistryofLabour)
Tomakeadecisionwithin7days
Withoutsettlement,strike/lockoutispossible(except
disputesinvolvingessentialservices)

DisputeSettlement Nationallevel(formedbyMinistryofLabour)
CounciltonominateaTribunaltoresolvedisputes
Co ncil to nominate a Trib nal to resol e disp tes
Arbitration Council
To issueadecisionwithin14daysfornonessentialservices
/Tribunal
14
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UMyintLwinLawOffice
or7daysforessentialservices.

LockoutsandStrikes

Labour Organisation Law(2011)applies

Conditions:

Type ofstrike/lockout

Conditions

Employerlockingoutpublicutility
serviceorother
i
th serviceworkers
i
k

Notifyemployeesandconciliationbodyat
l t 14 d i advance;Receive
least14dayin
d
R i
permissionfromconciliationbody

g
strikeinpublic
p
Notifyemployerandconciliationbodyat
y
p y
y
Labour organisation
utilityservice
least 14daysinadvance;Reachan
agreementwithemployeronprovisionof
services during strike
servicesduringstrike
Labour organisation strikeinother Notifyemployerandconciliation bodyat
services
least3daysinadvance
Strike/Lockoutinessentialservices Notpermitted
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Labour Organisations
g

Labour Organisation Law(2011)applies

Labour organisations canberegisteredwithTownshipRegistraror
ChiefRegistrar
Employeehasarighttojoinorresignfromalabour organisation

Type

Criteria

BasicLabour Organisation

Atleast30members;recommendedbyatleast10%of
workersinthesametrade

Township Labour Organisation

TownshipLabour

Recommended byatleast10%ofallbasiclabour
by at least 10% of all basic labour
organisations inthesametrade/township

RegionorStateLabour Organisation

Recommendedbyat least10%ofalltownshiplabour
orgnisations inthesametrade/state
in the same trade/state

Labour Federation

Recommendedbyatleast10%ofallregion/state labour
organisations inthesametrade

M
Myanmar
L b
Labour
C f d ti
Confederation

Recommneded
R
d d byatleast20%ofallMyanmarlabour
b t l t 20% f ll M
l b
federationsinthesametrade
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16

ForeignInvestmentLaw

Unskilledforeignworkersnotallowed
U
kill d f i
k
ll
d
Proportionofskilledworkforce:
Period

Proportion ofMyanmar
of Myanmar
employees

First2years

25%

Second2years

50%

Third2years

75%

Mustsignemploymentcontractwithin30daysfromthe
dateofemployment
Employment contract must be approved by Ministry of
EmploymentcontractmustbeapprovedbyMinistryof
Labour
Foreignemployeesmustobtainworkpermitandstay
permit
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Visa
Type offoreignemployees

Initial entry

Otherdocuments

Foreignemployee stayingfor
lessthan70dayseachtime

Business visa

Foreign employeestayinglong Businessvisa

time

Staypermit,Multiple Journey
Reentry Visa Foreigner
ReentryVisa,Foreigner
RegistrationCertificate

ForeignemployeeinanFIL
company

Staypermit,MultipleJourney
ReentryVisa,Foreigner
RegistrationCertificate

Businessvisa

RecommendationletterfromrelevantministryandMinistryofImmigrationand
Populationisneededtoobtainstaypermitandmultiplejourneyreentryvisa
Registration with the township immigration office is recommended
Registrationwiththetownshipimmigrationofficeisrecommended
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18

WorkPermit
Type offoreignemployees

Need work
permit?

ForeignemployeeinnonFILcompany

N/A(maychange
inthefuture)

ForeignemployeeinanFILcompany

Yes

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Tax

Employerhasthedutytodeductincometaxatthetimeofsalary
paymentbasedonannualincometax
Taxrateisbasedonresidency:

Type foreignemployee

Residency
Status

Tax
Rate

ForeignersworkingforanFILcompany

Resident

120%

Foreigners workingfora
working for a non
nonFIL
FILcompanystaying
company staying Resident
inMyanmarforatleast183daysinafiscalyear

120%
1
20%

Foreigners workingfora nonFIL companystaying Nonresident

inMyanmarforlessthan183daysinafiscalyear
f l
h
d
f
l

35%

Nonresidentforeignersworkinginastateprojectistaxedat20%
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IncomeTaxRatesforResidents
TaxableIncome
From(Kyat)

Rate
To(Kyat)

500,000

1%

500,001

1,000,000

2%

1,000,001

1,500,000

3%

1 500 001
1,500,001

2 000 000
2,000,000

4%

2,000,001

3,000,000

5%

3,000,001
,
,

4,000,000
,
,

6%

4,000,001

6,000,000

7%

6,000,001

8,000,000

9%

8,000,001

10,000,000

11%

10,000,001

15,000,000

13%

15,000,001

20,000,000

15%

20,000,001 Vovan&Associes UMyintLwinLawOffice

20%

21

Contractor

Withholdingtaxforcontractorapplies:
Type ofIncome
of Income

Resident Rates

Non resident Rates

NonresidentRates

Paymentsforservices

2%

3.5%

Note:DoubleTaxTreatymayapply
MyanmarhasDTAwith
y
India,SouthKorea,Malaysia,Singapore,Thailand,UnitedKingdom,
Vietnam,Indonesia,Bangladesh,Laos

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Thankyou.

Inassociationwith

U Myint Lwin LawOffice

UMyint
Law Office
an association of independent
law firms in 60 countries

Siri Lerdsirisopon
SeniorAssociate
Vovan&Associes
OceanTower1,14th Floor
170/42NewRatchadapisek Road
Klongtoey,Bangkok10110Thailand
Tel:+66(0)22613138
siri.lerdsirisopon@vovanbangkok.com

No.162,FirstFloor,35th Street
Kyauktada Township
Yangon,P.O.Box1126,Myanmar
Tel:+95(0)9420232998

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