Managing employees in Myanmar: Pay, time off, and other requirements
published : 8 Oct 2019 at 10:06
writer: Yuwadee Thean-ngarm
As Myanmar continues to open to foreign investment, employers from other ASEAN countries and places farther afield have been setting up local operations. Understanding the requirements of Myanmar labour law is, of course, a crucial part of this.
By staying in compliance with the country’s regulations on working conditions, leave and holiday entitlements, and other labour regulations, entrepreneurs can increase their likelihood of business success in Myanmar.
Working hours and pay
For shops, companies, trading centres, service enterprises, and entertainment houses, normal working hours are set by the Shop and Establishment Law 2016 at eight hours per day, or a maximum of 48 hours per week. Employees are entitled to at least one day off with pay per week, and the default weekly rest day is Sunday. Overtime working hours must not exceed 12 hours per week, or 16 hours in extraordinarily pressing circumstances. The prescribed minimum rest is at least 30 minutes after four hours of work. Under current practices of the Ministry of Labour, overtime pay must be calculated at double the employee’s basic wage.
The latest update to the national minimum wage occurred in 2018, when a notification was issued by the National Minimum Wage Committee. This set the minimum wage at Kyats 600 per hour and Kyats 4,800 for an eight-hour work day, applicable to all businesses with 10 or more employees.
Holidays and leave
Ten days of earned leave are allowed per year, provided that the employee has completed 12 consecutive months of service, working a minimum of 20 days per month notwithstanding any disruptions due to illegal strikes, lockout, sickness, or accident. For each month that the employee works less than the minimum 20 full days of work, one day is deducted from the number of earned leave days awarded. Before earned leave is taken, the employee should be paid for it in advance. In case of termination of the employment contract for any reason, the employee is eligible to be paid for earned leave. Employees are also entitled to negotiate with employers to carry over unused earned leave for up to three years.
If a worker takes any type of leave starting on the day following the end of a public holiday, or the day following the end of the leave is a public holiday, that holiday will not be included in and applied to the leave. However, if the public holiday falls somewhere in the middle of the period of leave, the holiday is included in the leave. Alternative holidays cannot be requested to substitute for the holiday that was included in the leave period.
As many of Myanmar’s public holidays are not on fixed dates, the government issues a notification every year declaring the dates of public holidays for private-sector and government organisations. All employees are entitled to the government’s announced public holidays. In 2019, the government announced 20 public holidays.
Six days of casual leave must be granted to every employee each year. This type of leave is intended to be used for personal reasons, emergencies, or other important obligations not covered by the other types of leave. It should not be taken along with any other holidays and will be considered to have lapsed if it is not taken within the year. Casual leave cannot be carried forward to the next year, and three consecutive days is the maximum amount of casual leave that can be used at one time. Casual leave cannot be combined with other types of leave.
Every employee who has completed six months of service is entitled to 30 days of paid medical leave per year. All employees are covered under the Social Security Law 2012 (SSL), which allows additional leave and treatment benefits for certain work injuries and sicknesses. An application for medical leave must be supported by a medical certificate from a certified medical officer, doctor, or other certified medical practitioner. This leave cannot be accumulated or carried forward to the following year, and it will lapse if not used.
The Leave and Holidays Act and SSL entitle female employees to six weeks of leave before delivery, and eight weeks after delivery—a total minimum of 14 weeks. For the birth of twins, a female employee, covered under the SSL, is eligible for an additional four weeks of maternity leave post-delivery. In case of miscarriage, the leave entitlement is six weeks.
For mothers covered under the SSL, maternity leave is paid by the Social Security scheme at 70% of the employee’s average wage for a year (calculated based on the monthly salary cap of Kyats 300,000) if they have worked a minimum of one year at their current place of employment and have contributed to the Social Security fund for a minimum of six months within that year. Additional maternity benefits are available. For a delivery of one child, 50% of the average monthly wages goes toward maternity expenses; for twins this is 75%, while for triplets or more, 100% of the average monthly wages is paid.
Under the SSL, male employees are entitled to 15 days of paid paternity leave, paid at 70% of the average wage for the previous year. They must have worked for a minimum of one year at their current workplace and contributed to the Social Security fund for a minimum of six months within that year.
In addition to that, if their wives are not insured under the SSL, male employees are entitled to 25% of their average wages for a month for maternity expenses in the case of a single delivery, 37.5% for twins, and 50% for triplets or more.
A female employee is eligible for up to eight weeks of childcare leave when adopting a child under one year old. This leave, covered under the SSL, is paid at the same 70% rate (subject to the same conditions) as maternity leave.
Compliance with labour laws and regulations
Meeting the minimum obligations set out in this article is necessary for any employer looking to undertake operations in the country. Of course, an employer can consider including more types of leave or increasing other benefits as well. Whatever the case, these matters should be covered in each employment contract—all of which must be approved by the local labour exchange office.
Author: Yuwadee Thean-ngarm, Director, Tilleke & Gibbins Myanmar. Please send any comments or questions about the content of this article to Andrew Stoutley at email@example.com
Series Editor: Christopher F. Bruton, Executive Director, Dataconsult Ltd, firstname.lastname@example.org. Dataconsult’s Thailand Regional Forum provides seminars and extensive documentation to update business on future trends in Thailand and in the Mekong Region.