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August 14, 2024

Minimum Wage: Myanmar Increases Mandatory Daily Allowance

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Myanmar has once again made significant amendments to its minimum-wage framework by introducing additional allowances for both public- and private-sector workers.

On August 9, 2024, the National Committee for Setting the Minimum Wage issued Notification No. 1/2024, which entitles private-sector workers to a new additional daily allowance of MMK 1,000 (approximately USD 0.48). This increase is on top of the MMK 1,000 additional daily allowance introduced last year. As a result, workers at private-sector employers with more than 10 employees are now entitled to the base minimum wage of MMK 4,800 plus additional allowances of MMK 2,000, for a total of MMK 6,800 (approximately USD 3.20) per day for an eight-hour workday, effective August 1, 2024.

A similar additional allowance had been announced for workers in government departments and organizations on July 26, 2024.

Background

The MMK 4,800 (approximately USD 2.29) minimum wage for an eight-hour workday (equivalent to MMK 600 per hour) was established in May 2018 for all workers, irrespective of location or job type. In September 2023, the Ministry of Planning and Finance announced an additional daily benefit of MMK 1,000 for workers in government departments and organizations, and on October 9, 2023, the National Committee for Setting the Minimum Wage extended this benefit to workers at private-sector employers with more than 10 employees, bringing the effective minimum daily wage to MMK 5,800 (approximately USD 2.77). These changes took effect on October 1, 2023.

Applicability of Additional Allowances for Private-Sector Workers

The latest announcement also entitles employees to the base minimum wage and additional allowances for days used from their entitlement to leave and holidays, in accordance with the 1951 Leave and Holidays Act.

However, the daily allowances—totaling MMK 2,000—are not to be included when calculating overtime payments. Instead, overtime payments must be calculated based on the base minimum daily wage of MMK 4,800.

For more details on these changes, or on any aspect of employee compensation or employment law in Myanmar, please contact Tilleke & Gibbins at [email protected].

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