Myanmar's employment laws and regulations are spread across various legislation and notifications instead of under a single act. Key considerations for investors include labor relations, minimum wage, working hours, overtime pay, severance pay, and social security requirements. Employers with 5 or more employees must register for social security and contribute a percentage of wages along with employee contributions. Employment contracts must follow a standard template and be registered with labor authorities. [END SUMMARY]

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DR. OLIVER MASSMANN - Partner
2020

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MYANMAR EMPLOYMENT
REGULATIONS

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Employment law considerations
for investors
– Labour laws apply to all workers regardless of the nature of work they
are engaged in.
– Myanmar has no single piece of uniform employment legislation.
– The relevant laws and regulations are spread across a variety of pieces
of legislation and notifications that are sector-specific.
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Employment law
considerations for investors
– Myanmar employment laws are concerned with:
 labor relations,
 working hours including overtime working hours, minimum wage
(currently 4,800 kyat per day, making it 600 kyat an hour for an eight-
hour day),
 child and female labor,
 severance pay,
 overtime, workers’ compensation, social welfare, holidays and leave,
and health and safety.
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Employment law
considerations for investors
• Social security registration is mandatorily required for employers with five (5)
or more employees.
• Both employees and employers are required to contribute a percentage of
their monthly wage to the social security fund established under the law.
– The rate of contribution is currently fixed at 3 percent for employers and 2
percent for employees.
– Currently there is a salary cap of 300,000 kyats per month.
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Employment law
considerations for investors
• Employment Contract
– A standard template employment contract, in both Burmese and English, must be made in
accordance with the Employment and Skill Development Law (2013) within 30 days of the
appointment of an employee.
(Employment and Skill Development Law (2013))
• Provisions, inter alia include remuneration, termination, duration, and social security
benefits.
• Under section 38 of the Employment and Skill Development Law 2013, an
employer who fails to sign an employment agreement with its employee can
be sentenced to imprisonment for up to six months, and/or a fine.
• Employment agreements are required to be registered with the labour
department.
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Employment law
considerations for investors
• Working hours
– Set at eight hours per day or 44 hours per week, according to the nature
of the work. Weekly working hours must not exceed 48 hours.
– The stipulated working hours for specific industries are:
 Shops, companies, trading centers, service enterprises, and places
of entertainment: 08 hours per day, 48 hours per week.
 Factories: 44 hours per week, and not more than 48 hours per week
for specific purposes.
 Please note that overtime work requires prior approval from the Factories and
General Labour Laws Inspection Department.
 Oilfields and mines: 44 hours per week.
• Mandatory overtime payments must be paid for every hour/day worked: The
practice is to pay double the amount of agreed remuneration for overtime
hours.
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Employment law
considerations for investors
Severance:
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The severance payment is calculated based on the employment period and the current prescribed
rate of severance payment is set below:
Employment Services Compensation rates
6 months to 1 year half month’s pay
1 to 2 years one month’s pay
2 to 3 years one & half month’s pay
3 to 4 years three month’s pay
4 to 6 years four month’s pay
6 to 8 years five month’s pay
8 to 10 years six month’s pay
Above 10 to 20 years eight month’s pay
Above 20 to 25 years ten month’s pay
Above 25 years thirteen month’s pay

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Employment law
considerations for investors
• Independent contractors and employees?
– Labour laws do not explicitly differentiate.
– How to assess employer-employee relationship or a service engagement:
 Nature of services
 Degree of control
 Exposure to a risk of loss
 Term of engagement
 Benefits (whether any statutory benefits extended?)
 Delegation of governance
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Myanmar Companies Law
2017- way forward
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Points to ponder
Looking beyond the frontiers
• Online (e-registry)
• Single shareholder company
• Resident director
• Corporate governance: New wine in Old bottles?
– Inside as well as outside control
 Transparency stays with market control rather than institutional control
– Director’s liability: has been more theory than practice
 Board structure- check on contractual arrangements
 Independent directors (public companies)
 Group companies
• Cooperation amongst ministries: Mapping the inter-departmental records
– Rapid development of modern technology
– Company registry/Anti-trust/Banking/Securities regulatory
• Enforcement directorate
– Interference by Court?
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• Immovable Property reforms – bankability of projects: A company law issue?
– Transfer of Immovable Property Restriction Act
– 35% stake: Myanmar Company
– Section 228 MCL: “Neither: the grant of a mortgage…shall be taken to
breach, nor be restricted by the Transfer of Immovable Property
Restrictions Law 1987...”
– Section 464: Provisions relating to foreign companies
 “The provisions of this Law relating to foreign companies shall not affect the
operation of any provision of the Transfer of Immovable Property Restrictions
Law 1987”
– Perfection requirement (mortgage over immovable property)
 Registration Law requires registration of mortgage over immovable property
to be registered with the local Registrar (erstwhile ORD).
• Clarification: Ownership of immovable property for foreigners vis-à-vis formally
recognizing local Security Trustee arrangement.
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Points to ponder
Looking beyond the frontiers

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Questions?

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