DFDL Myanmar Alert: New Minimum Wage After Five Years of Hiatus

The National Committee for Setting up the Minimum Wage (the “Committee”) has recently announced a long-anticipated adjustment to the daily minimum wage rate, increasing it to MMK 5,800 (approximately USD 2.77). The present announcement is significant as this is the first such increase to the daily minimum wage rate in the last five years. The previous increase was in 2018, when the Committee, vide Notification 2/2018, fixed the minimum wage at MMK 4,800 (approximately USD 2.30) for an eight-hour workday.

This October 2023, the Committee issued two notifications regarding the minimum wage adjustments. The first notification was issued on 5 October 2023. The second notification followed on 9 October 2023, repealing the 5 October 2023 notification.

The 5 October 2023 notification exclusively pertained to daily wage earners of government departments/organizations and Cut, Make, and Package factories. While there is no further increase in the minimum wage to commensurate the inflation, the 9 October 2023 notification increases the applicability of the revised minimum wage rate for all workers across all sectors and daily wage earners of government departments/organizations.

Per the 9 October 2023 notification, the new minimum wage rate of MMK 5,800 (approximately USD 2.77) has become effective from 1 October 2023, affecting all eligible workers across various sectors. The 9 October 2023 notification provides for an exception for the applicability of the increased minimum wage for smaller businesses employing ten or fewer workers.

Implementing the new minimum wage brings forth challenges and opportunities for businesses. While it necessitates reviewing and adjusting compensation structures, it also offers an opportunity to enhance employee satisfaction and productivity. Businesses employing more than ten workers would have to adjust to factor the increment in the October payroll itself.