Employment in Myanmar - AFMA - 20 Sep 2013

Inassociationwith

UMyint Lwin LawOffice

an association of independentlaw firms in 60 countries

AFMABreakfastTalkEmploymentinMyanmar

20September2013

Siri LerdsirisoponSeniorAssociate

[email protected]

1Vovan&Associes UMyint Lwin LawOffice

.Overview Myanmarworkforce:33.41million(2012) Employment

Agriculture

Industrial

Construction

Salary(2012):Services

Typeofworkforce Average MonthlySalary(USD)Unskilled 100Semiskilled 150Supervisors/TeamLeaders 200300U i i d i h k l d 300 00 d di i

2Vovan&Associes UMyintLwinLawOffice

UniversitygraduateswithknowledgeofcomputerandEnglish

300500 dependingonexperience

.LegalFramework Thereisnoonecomprehensivelabour lawinMyanmar Currentlabour laws:

Employment Restriction Act (1959)EmploymentRestrictionAct(1959)EmploymentStatisticsAct(1948)EmploymentandSkillDevelopmentLaw(30Aug2013replacingEmploymentand Training Act (1950))andTrainingAct(1950))FactoriesAct(1951)LaborOrganizationLaw(11Oct2011replacingTradeUnionsAct)LeaveandHolidaysAct(1951)yLawonMinimumWages(March2013replacingMinimumWagesAct(1949))OilfieldsLaborandWelfareAct(1951)PaymentofWagesAct(1936)ShopsandEstablishmentAct(1951)WorkmensCompensationAct(1923)LaborDisputeSettlementLaw(28Mar2012replacing1929version)SocialSecurityAct(1954)


.GovernmentSocialSecurityBoard

DepartmentBoardofLabour

MinistryofLabour FactoriesandGeneralCentral General

Labour LawsInspection

InlandFreightHandling

C t l T d InspectionDepartmentCommittee

CentralTradeDisputeC itt


Committee

.RecruitmentTownshipLabour Office*NewEmployment&Labour ExchangeOfficetobesetup

EmploymentAgency

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.EmploymentContract Generally must be approved by Ministry of Labour for foreign companiesGenerallymustbeapprovedbyMinistryofLabour forforeigncompanies

hiringMyanmarnationalstoensurecompliance NewEmployment&Labour ExchangeOfficetobesetupandtakeoverthe

approvalprocess Department of Labour publishes an employment law booklet that contains a DepartmentofLabour publishesanemploymentlawbookletthatcontainsa

samplecontract Basicterms:

Scopeofwork Locationofwork Salary Overtime

E l i d Employmentperiod Workinghours Holidays LeaveLeave Termination

Violationofemploymentcontract:imprisonmentnotexceeding3months,orfine,orboth


.Wages MustcomplywithLawonMinimumWages(2013) Previouslegalminimumwage:USD15permonth Marketrate:USD7080permonth Underthenewlaw,aNationalCommittee,comprising

t ti f th t th lrepresentativesfromthegovernment,theemployers,andthelabour organisations,wouldbesetuptodeterminethenewminimumwagesg

Theminimumwagewillbebasedonsectors Employersmustinformemployeesofthenew

minimumwageandhaveitprominentlyposted Paydiscriminationbasedongenderisprohibited


.SocialSecurityM t l ith S i l S it A t (1954) MustcomplywithSocialSecurityAct(1954)

Employerwith5ormoreemployeesmustentertheSocialSecurityInsuranceScheme

Employers duty to deduct and deliver the payment Employer sdutytodeductanddeliverthepayment Contributions:

Payer Contribution MaximumContributionEmployer 2.5% USD 5Employee 1.5% USD 3

Benefits:Freemedicalcare,freematernitycare,sicknesscashbenefit,maternitycashbenefit,funeralgrant,disabilitybenefit(duetoworkrelatedaccidents),survivorpension

New Social Security Law of 2012 not yet in force NewSocialSecurityLawof2012notyetinforce WorkmensCompensationAct(1923):stipulatescompensationthat

EmployermustpayifworkersufferingfromdisabilityordeathduetoworkplaceinjuryisnotcoveredunderSocialSecurityActp j y y


.Trainingg MustcomplywithEmployment&SkillDevelopment

Law(30Aug2013) tobecomeeffectivein3months Employersobligations:

makemonthlycontributionintheamountequivalenttoatleast0.5%ofemployeessalarytotheEmployeeSkillDevelopmentFund(cannotbedeductedfromemployeessalary)

providetrainingtoemployeesinlinewithpolicyoftheSkillDevelopmentTeam(onthejobtraining,systematictrainingprogram outside training and/or computerized training)program,outsidetraining,and/orcomputerizedtraining)


.LeaveandHolidaysy MustcomplywithLeaveandHolidaysAct(1951) Employeesentitlements:

PaidAnnualLeave NumberofDaysAllowedCasual leave 6 daysCasualleave 6daysEarnedleave 10daysMedical leave 30daysPublicholidays 21daysonaverage


.WorkingHours Applicablelaws:FactoryAct(1951);ShopsandEstablishmentAct

(1951) Working hours:Workinghours:

Industry MaximumWorkingHours

MinimumRestPeriod

MaximumOvertimeHours Period OvertimeHoursperweek

Hoursper

Hoursper

k

Daysper

kDay Week WeekFactoryandindustrialwork

8 44 630mins after5

12

Overtime rate is double that of ordinary wage

hoursofworkOffice andshops 8 48 6 16

Overtimerateisdoublethatofordinarywage


.TerminationofEmployment EmploymentinMyanmarisnotatwill. Employermustpayseverancetoterminatedemployees Severance payment amount: Severancepaymentamount:

LengthofService Severance PayLess than 3 months 1 months salaryLess than3months 1month ssalary3months 1year 2monthssalary13 years 3monthssalary

Exception:ifemployeewillfullyresigns,orifemployeeengagedin

y yMorethan3years 5monthssalary

p p y y g , p y g gactionthatdamagesemployersreputation

MinistryofLabour toannouncenewseverancepayinaccordancewith Employment and Skill Development LawwithEmploymentandSkillDevelopmentLaw


.WorkplaceHealthandSafetyp y Moreapplicabletofactoriesandindustrialwork Requirements depend on the industry involvedRequirementsdependontheindustryinvolved Oil&Gas:MICdirectivesonenvironmentalprotection Mining: Mining Law on working conditions, safety,Mining:MiningLawonworkingconditions,safety,

health Factories:FactoriesActonhealthandsafetystandardsy Newworkplacesafetylawisexpectedin2013

accordingtothegovernment


.Labour Disputesp Labour DisputeSettlementLaw(2012)applies:

Resolution Body DescriptionWorkplaceCoordinatingCommittee

Requiredforemployerofmorethan30employees Promotegoodrelationship Grievancesnegotiatedandsettledwithin5days

ConciliationBody Townshiplevel(formedbyregionorstategovernment) To conciliateadisputewithin3days Withoutsettlement,individualdisputescanmovetocourt, p

DisputeSettlementArbitrationBody

Region/State/Divisionlevel(formedbyMinistryofLabour) Tomakeadecisionwithin7days Withoutsettlement,strike/lockoutispossible(except

disputesinvolvingessentialservices)

DisputeSettlement Nationallevel(formedbyMinistryofLabour)Co ncil to nominate a Trib nal to resol e disp tes


Arbitration Council/Tribunal

CounciltonominateaTribunaltoresolvedisputes To issueadecisionwithin14daysfornonessentialservices

or7daysforessentialservices.

.LockoutsandStrikes Labour Organisation Law(2011)applies Conditions:

Type ofstrike/lockout ConditionsEmployerlockingoutpublicutility

i th i kNotifyemployeesandconciliationbodyatl t 14 d i d R iserviceorother serviceworkers least14dayin advance;Receivepermissionfromconciliationbody

Labour organisation strikeinpublic Notifyemployerandconciliationbodyatg putilityservice

y p y yleast 14daysinadvance;Reachanagreementwithemployeronprovisionofservices during strikeservicesduringstrike

Labour organisation strikeinotherservices

Notifyemployerandconciliation bodyatleast3daysinadvance


Strike/Lockoutinessentialservices Notpermitted

.Labour Organisationsg Labour Organisation Law(2011)applies Labour organisations canberegisteredwithTownshipRegistraror

ChiefRegistrar Employeehasarighttojoinorresignfromalabour organisation

Type CriteriaType Criteria

BasicLabour Organisation Atleast30members;recommendedbyatleast10%ofworkersinthesametrade

Township Labour Organisation Recommended by at least 10% of all basic labourTownshipLabour Organisation Recommended byatleast10%ofallbasiclabourorganisations inthesametrade/township

RegionorStateLabour Organisation Recommendedbyat least10%ofalltownshiplabourorgnisations in the same trade/stateorgnisations inthesametrade/state

Labour Federation Recommendedbyatleast10%ofallregion/state labourorganisations inthesametrade

M L b C f d ti R d d b t l t 20% f ll M l b


Myanmar Labour Confederation Recommneded byatleast20%ofallMyanmarlabourfederationsinthesametrade

.ForeignInvestmentLawU kill d f i k ll d Unskilledforeignworkersnotallowed

Proportionofskilledworkforce:Period Proportion of MyanmarPeriod Proportion ofMyanmar

employeesFirst2years 25%Second2years 50%Third2years 75%

Mustsignemploymentcontractwithin30daysfromthedateofemployment

Employment contract must be approved by Ministry ofEmploymentcontractmustbeapprovedbyMinistryofLabour

Foreignemployeesmustobtainworkpermitandstaypermitpermit


.VisaType offoreignemployees Initial entry Otherdocuments

Foreignemployee stayingfor Business visa lessthan70dayseachtimeForeign employeestayinglongtime

Businessvisa Staypermit,Multiple JourneyReentry Visa Foreignertime ReentryVisa,ForeignerRegistrationCertificate

ForeignemployeeinanFIL Businessvisa Staypermit,MultipleJourneycompany ReentryVisa,Foreigner

RegistrationCertificate

RecommendationletterfromrelevantministryandMinistryofImmigrationandPopulationisneededtoobtainstaypermitandmultiplejourneyreentryvisa

Registration with the township immigration office is recommended Registrationwiththetownshipimmigrationofficeisrecommended


.WorkPermitType offoreignemployees Need work

permit?permit?

ForeignemployeeinnonFILcompany N/A(maychangeinthefuture)

ForeignemployeeinanFILcompany Yes


.Tax Employerhasthedutytodeductincometaxatthetimeofsalary

paymentbasedonannualincometax Taxrateisbasedonresidency:

Type foreignemployee ResidencyStatus

TaxRateStatus Rate

ForeignersworkingforanFILcompany Resident 120%Foreigners working for a nonFIL company staying Resident 120%Foreigners workingfora non FILcompanystayinginMyanmarforatleast183daysinafiscalyear

Resident 1 20%

Foreigners workingfora nonFIL companystayingf l h d f l

Nonresident 35%

Nonresidentforeignersworkinginastateprojectistaxedat20%

inMyanmarforlessthan183daysinafiscalyear


.IncomeTaxRatesforResidentsTaxableIncome Rate

From(Kyat) To(Kyat)

1 500,000 1%

500,001 1,000,000 2%

1,000,001 1,500,000 3%

1 500 001 2 000 000 4%1,500,001 2,000,000 4%

2,000,001 3,000,000 5%

3,000,001 4,000,000 6%, , , ,

4,000,001 6,000,000 7%

6,000,001 8,000,000 9%

8,000,001 10,000,000 11%

10,000,001 15,000,000 13%


15,000,001 20,000,000 15%

20,000,001 20%

.Contractor Withholdingtaxforcontractorapplies:

Type of Income Resident Rates Non resident RatesType ofIncome Resident Rates NonresidentRates

Paymentsforservices 2% 3.5%

Note:DoubleTaxTreatymayapply MyanmarhasDTAwithy

India,SouthKorea,Malaysia,Singapore,Thailand,UnitedKingdom,Vietnam,Indonesia,Bangladesh,Laos


Thankyou.

Inassociationwith

UMyint Lwin Law Office

an association of independent

UMyint Lwin LawOffice

an association of independentlaw firms in 60 countries

Siri LerdsirisoponSeniorAssociateVovan&AssociesOceanTower1,14th Floor No.162,FirstFloor,35th Street170/42NewRatchadapisek Road Kyauktada TownshipKlongtoey,Bangkok10110Thailand Yangon,P.O.Box1126,MyanmarTel:+66(0)22613138 Tel:+95(0)[email protected]

23Vovan&Associes UMyint Lwin LawOffice

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Employment in Myanmar - AFMA - 20 Sep 2013