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The Lao People’s Democratic Republic, Lao PDR, or Laos, is a small landlocked Southeast Asian country bordered by China, Vietnam, Cambodia, Thailand, and Myanmar. Previously an independent kingdom and a French and Japanese-occupied territory, Laos became an independent socialist republic in 1975. Since that time, the country’s GDP has grown tremendously, peaking at $18.77 billion in 2019 but decreasing during the pandemic. It now sits at $15.2 billion but is predicted to grow by 4.0% in 2024. The population of 7.686 million is largely engaged in agricultural production. However, economic growth has been driven by industrial development in mining and hydropower. Unemployment in Laos is low, reaching roughly 3.8% last year. It’s a good time to hire Lao workers, and working with an EOR is the best way to do it.
Hire in Laos, and pay employees through our platform or app.
Our Laos EOR solution is the most affordable on the market.
Fast Laos onboarding, hire in as little as 24 hours.
We draft compliant Laos labor contracts.
We manage all Laos mandatory benefits.
It doesn’t stop with Laos — we hire employees globally.
An employer of record, or EOR in Laos, is a service provider that hires workers on behalf of other companies. This arrangement allows foreign-based companies to legally hire Lao workers without needing to register business entities in the country. This saves them time, money, and effort. To get Lao workers working for them quickly, clients can simply pay the EOR a fee for each person it hires and manages. The EOR handles the workers’ human resources (HR) needs over the long term while you take care of their day-to-day schedule and tasks.
Working with an EOR in Laos is one of the best ways to get Lao workers on board with your organization. The advantages you can gain from working with a Lao EOR include:
Horizons stands out as a Laos EOR through:
When you work with an EOR in Laos, you can leverage a valuable partner that can help you recruit and manage local employees quickly and easily. These are the services you can normally expect from an EOR:
As a socialist country, Laos has extensive laws that provide strong protections for workers. These statutes are spread over various legal instruments such as the Law on Social Security, The Constitution of the Lao People’s Democratic Republic of 1991 (revised 2015), and the Labor Law (amended 2007), as well as other articles and orders. However, it’s the responsibility of the EOR’s legal staff to have expert knowledge of all of these laws. Still, it’s useful for you to know the main points of law that help you understand what you need to provide for your Lao employees.
Contracts must be made in writing. They can be permanent (indefinite) or fixed-term (definite). Fixed-term contracts cannot be made for longer than three years.
Probationary periods in Laos cannot exceed 30 days for primarily physical work and 60 days for skilled work. During probation, a worker must be paid no less than 90% of the normal wages for that work.
No probationary period.
At completion of the project.
Not applicable
Typically up to 60 days
30 days (minimum and maximum allowed by labor law)
Not applicable
Typically up to 60 days
30 days (minimum and maximum allowed by labor law)
Less than 3 years is 10% of salary x number of months works
3 to 6 years is 15% of salary x number of months works
6 to 10 years is 20% of salary x number of months works
More than 10 years is 25% of salary x number of months works
The standard working hours in Laos are 8 hours per day, six days a week, for a total of 48 hours per week. Overtime is allowed only by mutual agreement between the employee or trade union and the employer. These overtime hours must not exceed three hours per day or 45 hours per month.
150% of the standard hourly rate
200% of the standard hourly rate
300% of the standard hourly rate
Laos employees are entitled to at least ten paid public holidays each year. These holidays combine national and religious (Buddhist) observances.
Foreign workers in Laos are allowed one day off for their national day in addition to these holidays.
Laos’ public holiday schedule for 2025 is:
| Date | Holiday name |
|---|---|
| 1 Jan 2025 | International New Year’s Day |
| 8 Mar 2025 | International Women’s Day |
| 13 Apr to 15 Apr 2025 | Lao New Year |
| 1 May 2025 | International Labour Day |
| 20 Jul 2025 | Lao Women Union’s Day |
| 7 Oct 2025 | End of Buddhist Lent |
| 5 Nov 2025 | That Luang Festival Day |
| 2 Dec 2025 | Lao National Day |
Workers in Laos are entitled to a paid five-to-ten-minute break after working for two hours, a paid 45-minute meal break during each shift, and at least one 24-hour period of rest each week.
no leave entitlement
18 days of paid leave annually
18 days of paid leave annually
18 days of paid leave annually
Employees are entitled to up to 30 days of sick leave per year with the presentation of a valid medical certificate.
(percentage of regular wages owed to the employee)
no leave entitlement
30 days of paid leave annually
30 days of paid leave annually
30 days of paid leave annually
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
Unpaid (unless specified in the employment contract or under special circumstances)
In order for employees to receive the full wages due to them, workers must present a valid medical certificate from a certified doctor to their employer.
Expecting mothers are entitled to a minimum of 90 days of fully paid maternity leave, at least 45 of which must be taken after giving birth. There is no mandate for paternity leave in Laos.
Employees with indefinite contracts or those working on definite contracts for over one year are entitled to 15 working days of annual leave. Those who perform heavy work that could be hazardous to their health are entitled to 18 days per year.
Employers can terminate workers for gross misconduct. Termination for any reason must be proceeded by notification to the worker’s union or labor unit, and that unit has 15 days to reply to the notification. Fixed-term contracts can be terminated with 15 days’ notice. Permanent contracts can be terminated with 30 days’ notice for primarily physical work and 45 days’ notice for skilled work. When workers are dismissed, they are to be paid 10% of their monthly salary as severance if they have given less than three years’ service to an employer and 15% after more than three years.
Social security contributions are governed by the National Social Security Fund (NSSF), which is responsible for managing social security benefits for workers.
Contribution is at 11.5% of the employee’s gross monthly salary, split between the employer and the employee.
These contributions are mandatory and ensure that employees have access to various social security benefits, providing a safety net for health, maternity, sickness, injury, disability, retirement, and survivorship.
Foreign employees working for a Lao company are generally required to contribute unless exempted by a specific bilateral agreement between Laos and the foreign employee’s home country.
Income tax is levied on the income of residents and non-residents working in the country. The tax system in Laos is progressive, meaning that the tax rate increases as income increases.
Non-residents are generally taxed at a flat rate of 10% on their income derived from sources within Laos.
Public health insurance in Laos is provided through the National Social Security Fund (NSSF), which is part of the country’s broader social security system. This insurance covers both public and private sector employees.
Private health insurance is also available and is often chosen by expatriates and those seeking more comprehensive or international coverage.
The state-mandated minimum salary in Laos is 1.6 million LAK (Laos kip)/month (about 75 USD/month).
Regular daytime overtime hours must be paid at a rate of 150% of a worker’s normal wages. Nighttime overtime hours are paid at 200% of normal wages. Hours worked on weekly rest days must be paid at 250% of normal wages and at night 300%.
A 13th-month annual bonus is not mandatory in Laos. While not mandatory, some employers may choose to grant an annual bonus to incentivize their workers.
Employers in Laos pay contributions equal to 6% of a worker’s salary to the National Social Security Fund. Employees are deducted 5.5% of their salary for the same to receive old age, invalidity, survivor’s, sickness, maternity; accident, occupational disease, and unemployment benefits.
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The EOR’s legal experts keep track of updates to labor laws at all times. Their recommendations help the EOR produce contracts that are fully compliant. The EOR manages payroll for you, which means it ensures that taxes and social security contributions are paid on time and correctly.
When you work with a Laos EOR, you’re able to outsource to it many of your HR functions like payroll, contract management, and benefits administration. The EOR manages compliance while you direct your workers’ daily activities and schedules. All this is done without your company needing to spend time and money registering a business entity in Laos.
Holiday Schedule in Laos [2025]
