Workers still being paid less than minimum wage
Workers still being paid less than minimum wage
Workers employed by various businesses in Laos are still receiving a basic salary lower than the minimum wage despite the government announcing an increase for low paid workers last year.
The minimum wage in Laos was increased by 44 percent, from 626,000 kip to 900,000 kip per month but workers in some business units are receiving lower, Director of the Policy Research Division of the Small and Medium Enterprises (SME) Promotion Department, Mr Sengphachanh Simangkhala told Vientiane Times last week.
After the government announced an increase to the minimum wage for workers, the relevant sectors should have been following up on the implementation of the new minimum wage by the business sector, he said.
Due to poor monitoring and management by the relevant sectors, some business units are still employing people at less than the minimum wage based on the costs they think their business can absorb.
Many entrepreneurs said they could not increase the minimum wage for their workers and instead provided other facilitates to entice them to stay.
Increasing the minimum wage in Laos affected many business units but workers' skills are the same, Mr Sengphachanh said.
The government should allocate a wage for each class of occupation like other countries do, he said, so that workers are remunerated according to their contribution to a business' success.
In recent times, a large number of workers have moved from the processing sector to the service sector as they receive better income and facilities, Mr Sengphachanh added.
The numbers of service businesses in Laos is expanding, especially in tourism, hotels and restaurants.
Meanwhile most of the industrial processing manufacturers especially garment makers are suffering from a shortage of labour to complete their processing requirements.
From 2003 to 2011, the garment industry expanded but since 2012 a downward trend has prevailed, according to the Association of the Lao Garment Industry.
Labour shortage issues have caused new investors to lose interest in Laos, instead shifting their capital to neighbouring countries, especially Cambodia, Vietnam and Myanmar.
The sector is also struggling with low labour skill issues as most workers have no experience and have to learn on the job, and many employees don't want to take on the responsibility of training them.
Large numbers of workers still have an easygoing mindset and are not attuned to modern industrial and technological ways of thinking.
Another reason for the shortfall in labour is that workers now have other job choices, such as in services.
Business sector development requires more cooperation from every sector in terms of facilitating business operations, providing skills training and also ensuring access to funding.
Many business units have stopped operation due to poor management as there has been limited or no consultation with experts or exchanges of experience with other business operators.
