You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

June 15, 2020

COVID-19 Labor Law FAQ for Employers in Mainland Southeast Asia

Informed Counsel

The COVID-19 pandemic has led to shutdowns, lockdowns, and quarantines around the world, forcing companies into drastic cost-cutting measures to offset severely diminished (or zero) revenue due to a lack or production or a lack of consumers. While certain types of expenses, like fuel and electricity, may be automatically reduced with a lack of activity, other costs like rent and insurance remain stubbornly constant. Notably, labor costs—the single biggest expense for many companies—are typically negotiated in advance, and are fixed to a high degree, leading to the unproductive situation where some workers at closed business are unable to work, but must still be paid. Even in companies that can effectively transition to a work-from-home model, roles requiring a physical presence, like drivers, cleaners, and security guards, are likely to be under-utilized.

As a result, companies have been scrambling to find legal, effective, and humane options to reduce their labor-related expenses while minimizing the impact to their employees. These options may include—where allowed—reduced working hours, forced leave, furloughs, or layoffs. The table below summarizes the options available to employers in Cambodia, Laos, Myanmar, Thailand, and Vietnam in Q&A form (a green cell is a “yes”, a red cell is a “no”, and a yellow cell is a mix of both), and is followed (in the attached PDF) by a comparative analysis of each answer in more detail.

Related Professionals