Fair Trade Laos Minimum Labour Standards

As a Fair Trade Organization, Fair Trade Laos set up its standards in compliance with the Lao Labor Law. Whenever stronger requirements are available (e.g. by ILO), FTL will stick to these stronger international regulations.

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Working Conditions (FAIR CONDITIONS)

THE REGULAR WORKING HOURS SHOULD NOT EXCEED 48 HOURS A WEEK INCLUDING OVERTIME. Explanations: The Lao Labor Law allows regular working hours of 8 hours a day or 48 hours a week. In case the occupation involves dangerous, unhealthy or extreme conditions, a maximum of 6 hours a day is allowed. A 45 minute break per shift and at least 5 minutes break every 2 hours are compulsory. At least one day a week has to be entitled as the day of rest. Regarding to the International Labor Organization (ILO), working hours exceeding 48 hours /week are excessive. „MNEs are encouraged to progressively reduce the normal hours of work from 48 hours to 40 hours, taking into account national conditions and practice, as well as the conditions in the particular sector of operation, in order to avoid any reduction in wages“/ „With overtime, this limit could extend to 48 hours; but such overtime should be an exception to the recognized rules or custom of the establishment. “ Lao Labor Law Article 1 and, 17 // ILO Regulation R116 Reduction of Hours of Work Recommendation, 1962
OVERTIME WORK SHALL NOT BE REGULAR AND EXCESSIVE. Explanations: Overtime shall not exceed 45 hours per month or 3 hours per day. It is prohibited to work overtime continuously every day. Overtime adding up to more than 48 hours of work per week should be exceptional (see above). Lao Labor Law Article 18
FULLY PAID ANNUAL LEAVE SHALL BE AT LEAST 3 WORKING WEEKS. Explanations: in detail, this means 15 or 18 days, regarding the length of the working week. The paid holidays are additional to the public holidays. The Lao Labor Law sets 15 days of paid holidays a year, the ILO asks for 3 working weeks, which in some cases will be 18 days (6 day working week). Lao Labor Law Article 19 and 21 // ILO convention C132 Holidays with Pay Convention (Revised), 1970
AN EMPLOYER HAS TO PROTECT THE SPECIFIC RIGHTS OF PREGNANT WOMEN AND THOSE WITH A NEWBORN CHILD. Explanations: Pregnant women cannot work under heavy or hazardous conditions. Pregnant women or women with newborn under 12 months are not allowed to work overtime or during a holiday. Before and after birth, a woman shall be entitled at least 90 days of maternity leave with full payment, but at least 42 of these should be taken after birth. If the woman gets ill, she can have additional 30 days with a payment of 50% of her salary. During the first year after birth she has the right to one hour rest per day in order to feed the child. If she suffers miscarriage she is entitled to take full paid leave for a period of time as determined by a doctor.  After gave birth woman shall be entitled to an allowance of at least 60% of the minimum wage to be paid by the employer. If she has more than 1 birth at a time she gets additional allowance of 50% of the maternity allowance. She is also entitled to this allowance in case of miscarriage. All these regulations are from the Lao Labor Law. Lao Labor Law, Article 38, 39, 40
IT IS THE EMPLOYERS DUTY TO TAKE HER OF THE EMPLOYEES HEALTH. HE SHOULD MAKE SURE, A SOCIAL SECURITY INSURANCE SYSTEM IS IN PLACE. Explanations: An employer must arrange for the workers to undergo a medical examination at least once a year. In case a worker has a disease due to his workplace, the employer has to pay the full medical costs. All labor units shall have a first-aid kit. Units with more than 50 workers should have permanent medical staff to take care of health of workers. Employers and employees contribute to the social security fund in accordance with the social security regime determined by the state. All labor units must participate in the social security regime by contributing to the social security fund to implement the social security policy for the employees and employer in accordance with regulations. Lao Labor Law Article 43, 57, 58
AN EMPLOYER SHALL, WHENEVER POSSIBLE, ALLOW A SICK LEAVE WITH FULL PAYMENT FOR ITS EMPLOYEES FOR UP TO 30 DAYS A YEAR. Explanations: Upon presentation of a medical certificate, the worker shall be entitled to sick leave with full payment for not more than 30 days per year. Lao Labor Law Article 20
THE EMPLOYER SHALL TAKE CARE OF A SAFE AND HEALTHY WORK PLACE. Explanations: An employer shall provide first aid facilities and, whenever necessary, safety equipment and facilities for disabled workers. He might additionally provide safe drinking water, trainings and seminars to support continuous improvement of their workers skills. Lao Labor Law Article 42

Renumeration (FAIR PAY)

THE MINIMUM WAGE SHALL BE AT LEAST 626.400 KIP/MONTH. Explanations: The minimum wage is not included daily allowance. This is the current official regulation in Laos. Due to lack of further information (e.g. about living costs, consumer basket), FTL hasn’t sufficient input to set another minimum wage.
Explanations: Overtime work during daytime shall be rewarded with 150% of the regular wage. At night time 200%, at a day of weekly rest or holiday 250%, at night time of the day of weekly rest or holiday 300%.  If a worker is assigned to work on a night shift, he shall be paid an additional bonus of at least 15% of his regular hourly wage for every hour. The ILO likewise requires overtime work should be remunerated at a higher rate than normal hours of work. Lao Labor Law Article 48, ILO regulation R116 Reduction of Hours of Work Recommendation, 1962
AN EMPLOYER SHALL, WHENEVER POSSIBLE, HAVE A BONUS SYSTEM IN PLACE TO REWARD EMPLOYEES PERFORMING ABOVE AVERAGE. Explanations: There are no detailed regulations available, but FTL wants to encourage employers to install a bonus system to reward those employees performing above average.


THE MINIMUM WORKING AGE SHALL BE 14. 14 is the end of the mandatory schooling age. Lao Labor Law Article 41
THE WORKING HOURS FOR CHILDREN UNDER 18 SHALL BE LIMITED. Explanation: The maximum working hours for children under 18 shall be… Age 5-11: 1 hour of economic work or 28 hours of domestic work per week Ages 12-14 : 14 hours of economic or 28 hours of domestic work per week. Ages 15-17 : 43 hours of economic or domestic work per week. Children under 18 are also not allowed to work overtime or between 22 pm and 5 am. This UNICEF regulation is stronger than the regulations in the Lao Labor Law. UNICEF defines child labor as work that exceeds a minimum number of hours, depending on the age of a child and on the type of work. Such work is considered harmful to the child and should therefore be eliminated. (See http://www.unicef.org/protection/index_childlabour.html) and Lao Labor Law Article 41.