Labor Compliance in Myanmar (Oct 2021)

1. Overview

Labor laws and related regulations apply to all employer-employee relationships where the work is to be performed within Myanmar. This is not a comprehensive summary of Myanmar labor laws, but it does highlight important areas that may differ from practices in other countries.

2. Hiring Employees

Foreigners entering Myanmar for the purpose of employment or business must apply for an employment or business visa. Foreigners can gain permission to work in Myanmar by obtaining a work visa and stay permit. Foreign-invested companies permitted under the Myanmar Investment Commission (“MIC”) may appoint any foreigner who is qualified as a senior manager, technical expert, operational expert, or advisor. The companies must only appoint citizens for work that does not require skill. An employer shall give priority to appointing citizen workers in case of equal skills or qualifications between citizen workers and foreign workers, and also pay a citizen worker the same rate of remuneration as a foreign worker. Companies must state the number of foreign employees in the investment application form submitted to the MIC. Then, the company must apply for a work permit from the Ministry of Labor and apply for a visa and then stay permit from the Ministry of Immigration.

Companies registered under the Myanmar Companies Law require a recommendation letter from the Directorate of Investment and Company Administration (DICA) to apply for a foreign employee’s stay permit.

An employer cannot appoint a worker under the age of 14. A child worker 14 to 15 years of age must receive a certificate of fitness from a certifying surgeon in order to work, and he or she may work only 4 hours per day. A worker 16 to 17 years of age must be qualified as fit to work by a certifying surgeon. No one under the age of 18 may engage in work that is deemed hazardous under the governing laws.

3. Employment Contract

As per Section 5(a) of the Employment and Skills Development Law (2013), employers must enter into employment contracts with their employees within 30 days of appointment, as there is no requirement for a written employment contract during the training period or probation period. Afterwards, the employment contract must be approved and registered with the relevant township labor office. In practice, the registration requirement is enforced for entities with five or more employees.

On 28 August 2017, The Ministry of Labor issued a revised employment contract template (Notification 140/2017). However, the employer and the employee may amend conditions and benefits contained in the employment contract; however, amendments to the employment contract must be approved by the relevant labor office at the time of filing. According to Section 38 of the Employment and Skill Development Law (2013), an employer who is convicted of failing to sign an employment contract shall be punished with imprisonment for not more than 6 months or with a fine, or both.

4. Working Hours and Overtime

In Myanmar, working hours are defined by the Factories Act (1951) as amended in 2013, and the Shops and Establishment Law (2016). The Factories Act covers workers in factories and premises used for manufacturing processes. Shops and Establishment Law covers workers in shops, commercial establishments, public entertainment establishments, and industrial establishments.

Adult workers in factories must not be required to work more than 44 hours a week. Also, adult male workers in a factory engaged in work that for technical reasons must be continuous throughout the day may work 48 hours a week. Children aged 14 to16 are permitted to work up to four hours per day if they have a certificate of fitness while children 16 years old and older can work as an adult. A worker is entitled to a rest period of at least 30 minutes after working continuously for 5 hours. Adult workers in shops and establishments must not be required to work for more than 8 hours per day or 48 hours per week. A worker is entitled to a rest period of at least 30 minutes after working continuously for 4 hours.

Regarding overtime, a worker in a factory who works over 8 hours per day or 44 hours (non-adult workers) / 48 hours (adult workers) per week are considered to be overtime work. Overtime hours for workers in factories who do not engage in continuous work must not exceed 20 hours per week. An employee is entitled to overtime pay at double the basic salary if he or she is required to work overtime.

Regarding overtime, workers in shops and establishments must not work more than 12 hours for any one week; however, if there are special matters that require overtime work, such overtime work should not exceed 16 hours for any one week. An employee is entitled to overtime pay at double the basic salary if he or she is required to work overtime.

5. Holidays and Leave

Each year, employees must be entitled to paid public holidays as notified by the government. The Leave and Holidays Act (1951) allows employees to have up to 6 days of paid casual leave per year for such things as emergencies and personal matters. Employees can only take a maximum of three days of casual leave at a time. Casual leave cannot be combined with any other kind of leave.

An employee must have 30 days of paid medical leave after completion of a period of 6 months of service. In addition, pregnant mothers are entitled to a total of 14 weeks of paid maternity leave, 6 weeks before birth and 8 weeks after birth. An employee must be granted annual leave after completing 12 months of continuous service, having worked at least 20 days in every month.

Wages must be paid at the end of the month in cash or cheque, or through bank transfer based on a mutual agreement between an employer and a worker. Employers with over 100 workers must pay within 5 days of the previous month. Employers may make deductions to a worker’s salary for income tax and social security contributions.

6. Termination without Cause

Employment may be terminated by giving one month’s notice and severance payment as follow: