Ministry of Labour Proposes Minimum Wage Amount

On June 29th the Ministry of Labour, Employment and Social Security announced its intention to set a minimum wage for Myanmar at 3,600 kyats/day. ($3.25 USD at the current official exchange rate).
The Myanmar government has invited comments on this rate during the first two weeks of July before details are finalized, including any regional variance mechanism. A final figure is expected to be submitted to parliament for approval in two months time.
The newly proposed minimum wage figure represents a more-than doubling of the industry average introductory wage for unskilled workers. For some factories, 3,600 kyats represents 4.5 times what is normally paid to unskilled workers who are participating in induction training. As such, this represents a colossal change for the garment industry. The impact of the proposed wage on potential investment has been much debated.
Myanmar has the highest overtime pay in the region, with workers entitled to receive 200% remuneration for overtime hours. As well, Myanmar’s overtime pay kicks in after 44 hours per week instead of 48 hours. 48 hours/week is the norm for manufacturing jobs in all other countries in the region. As such, a higher minimum wage in Myanmar produces a larger add-on effect when factories operate on overtime.
The garment sector employs more unskilled and low-skills workers than any other industry in Myanmar. MGMA’s member factories presently employ approximately 230,000 people and jobs were created during 2014 at a rate of roughly 5,000 new jobs added per month.