construction workers in Laos Champassak province has warned it will take legal action against employers who are failing to pay workers the recently stipulated increased minimum wage.

The authorities will inspect various companies operating in the province to see whether they are hiring and paying workers based on the conditions stipulated in the Labour Law.

Provincial Governor Mr Sonexay Siphandone told Vientiane Times recently the province will soon ask companies to report on their current and future use of Lao labourers in their businesses.

“We will make sure that foreign investment is creating jobs for Lao people as intended. Employers can hire a maximum of 10 percent of foreign labourers while 90 percent of their workforce must be Lao nationals, based on the law,” he said.

Mr Sonexay is taking steps to address the issue after finding that many employers are not complying with the Labour Law and are not paying workers the minimum wage stipulated by the government. The low wages in Laos, coupled with the fact that the minimum wage in Thailand is 300 baht per day, is prompting more and more Lao nationals to cross the border and work in Thailand in order to survive.

“If Lao people can find reasonably paid employment at home, I think they will not cross the border to work in Thailand because by doing this they risk falling into the trap of human trafficking,” Mr Sonexay said.

Deputy Director General of the Lao Federation of Trade Unions’ Worker Protection Department, Mr Samanxay Khanthanuxay, expressed support for the province’s commitment to resolving the issue, but feared the investigations would not be conducted as rigorously as necessary.

Mr Samanxay said many foreign companies do not intend to hire Lao people. Some offer very low wages to Lao nationals to discourage them from working on their projects and use it as an excuse to hire workers from their own countries instead.

Last month, the Lao Federation of Trade Unions and Champassak authorities held a meeting with local employers to assess workplace relations.

Some companies were reluctant to report their failure to enforce the payment of the increased minimum wage. Mr Samanxay said this problem is not restricted only to Champassak but the whole of Laos, due to the weakness of the law enforcement sector.

The government announced the increase in the monthly minimum wage early last year at a time of rising inflation and spiralling living costs.

The minimum wage was raised from 348,000 kip to 626,000 kip per month, excluding supporting allowances paid for lunch, good performance and social welfare benefits.

Senior economist Dr Liber Libuapao from the National Economic Research Institute predicted that many more people will cross the border to find work in Thailand, attracted by the higher wages on offer there, despite the risk of falling victim to forced labour and human trafficking.

Critics say foreign investment projects in Laos create a lot of jobs for foreign workers, despite the fact they are designed to bolster employment for local people.

Source: Vientiane Times
April 22, 2013