Myanmar, located in Southeast Asia, is characterized by a diverse economy driven by industries such as agriculture, extractive industries (precious stones), and tourism. The 2021 GDP is estimated at $258 billion, with a per capita income of $1,422. While ranking 147 in the Human Development Index, key cities like Yangon and Mandalay are economic hubs. Utilizing an Employer of Record (EOR) for businesses operating in Myanmar can facilitate compliance with local labor laws and streamline operations.

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For employers looking to establish a foothold in Myanmar, a country with rich cultural diversity and economic potential, there are both promising opportunities and unique challenges. 

For employers, particularly from business-friendly nations, Myanmar’s labor laws can be challenging. For example, laws around how employers should frame employment contracts are quite flexible in the UK and the USA. However, laws around creating employment contracts are quite rigid. Particularly, laws around termination are highly regulated in Myanmar. 

A Myanmar Employer of Record (EOR) or Professional Employer Organization (PEO) can ensure compliance with these local laws. By offloading these duties to an EOR like Gloroots, you are equipped with more time to screen the right candidate.

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The cost of EOR/PEO services in Myanmar is determined by several factors, encompassing the number of employees, the scope of required services, and the project's complexity. Typically, the pricing structure involves a monthly fee per employee or a percentage of their salary. Additional charges may apply for personalized services or specific business requirements. For a customized and transparent pricing package that aligns with your business objectives in the Myanmar market, we recommend consulting with our esteemed EOR partner, Gloroots. Their expertise ensures a comprehensive understanding of your distinct needs, facilitating a cost-effective and seamless expansion into Myanmar.

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Key Metrics For Foreign Employers 

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Cost-Effective Labor: Myanmar offers a generally more cost-effective workforce than many other regions. This can significantly reduce labor costs for your business, especially for roles where remote work is feasible or if you're considering offshore operations.

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Young and Growing Workforce: Myanmar has a relatively young population, with a median age of around 28 years. This demographic trend suggests a dynamic and potentially long-term workforce that can be trained and developed for future needs.

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Emerging Market with Growth Potential: Myanmar is considered an emerging market with significant growth potential. Engaging with talent from such markets can provide early-mover advantages and insights into new consumer bases and business landscapes.

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Business-Friendly Policies: While Myanmar’s political landscape has been complex, there have been efforts to create a more business-friendly environment, particularly aimed at foreign investment and international collaboration. These policies can facilitate smoother business operations and collaborations.

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Geographic Advantage for Certain Industries: For businesses looking to expand in Southeast Asia or needing a strategic location in this region, employing talent from Myanmar can provide a geographical advantage.

In Myanmar, effectively navigating the challenge of "Misclassification of Workers" is paramount, as inaccuracies in categorizing employees can lead to substantial risks, such as misidentifying independent contractors or wrongly classifying individuals as exempt from specific regulations. Engaging a PEO/EOR can help you address and mitigate these risks. Partnering with Gloroots, a trusted ally, ensures a steadfast commitment to strict adherence to labor laws, precise worker classification, streamlined payroll management, and comprehensive employee benefits.

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Entrusting these responsibilities to seasoned professionals guarantees a compliant and efficient experience within Myanmar's intricate labor landscape. This commitment fosters operational efficiency and instills confidence in your business endeavors within the Myanmar market, safeguarding against potential pitfalls associated with worker misclassification.

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Labor laws in Myanmar play a crucial role in preventing the potential exploitation of employees by establishing essential provisions related to the minimum working age, working hours, minimum wage, paid holidays, sick leave entitlements and overtime compensation. 

The main statutes and regulations relating to employment in Myanmar are the:

• Leave and Holidays Act (1951);
• Social Security Law (2012) (SSL) and the Social Security Rules;
• Minimum Wages Act (2013) (MWA);
• Payment of Wages Act (2016);
• Employment and Skills Development Law (2013) (ESDL);
• Shops and Establishments Law (2016);
• Labour Organisation Law (2011);
• Factories Act (1951);
• Settlement of Labour Disputes Law (2012) (SLDL) and Settlement of Labour Disputes Rules (2012); and
• Notification No. 84/2015 on severance payments (Notification 84).

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Employment contract

Employers must furnish an employment contract within 30 days of their employee’s employment. The employer is mandated to utilize the standard employment contract the Government provides.

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This contract outlines key details, including the nature of employment, compensation, benefits, working hours, leave policies, probationary period, guidelines for termination and resignation, employment location, job roles and responsibilities, and overtime pay.

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Typically, these contracts are established for an unspecified duration unless explicitly stated otherwise. Partnering with global PEO and EOR entities like Multiplier ensures they handle the responsibility of creating employment contracts for your staff in Myanmar while ensuring compliance with local regulations.

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Working time

In Myanmar, a typical workweek is defined as 8 hours per day, with a maximum limit of 48 hours per week.

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Overtime

Any work that surpasses the regular weekly working hours is considered overtime and is governed by employment contracts or collective agreements. There are specified limits when employees are asked to work beyond standard hours or during holidays. For shop and establishment employees, the maximum is 12 hours per week, while factory workers have a maximum of 20 hours per week for overtime.

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Overtime hours exceeding 48 hours a week are subject to additional compensation, calculated at a rate of 200.00% of the employees' regular pay rate. It's important to note that working overtime beyond midnight is not allowed.

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Public Holidays

Myanmar has 16 public holidays throughout the year (approximately).

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Minimum Wage

The minimum daily wage for full-time workers in Myanmar is 4,800 MNK, calculated on an 8-hour working day.

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Annual Leave

Workers have the right to take 10 days of paid vacation annually.

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Paid Sick Leaves

Employees who have worked for at least six months in a company are eligible for 26 weeks of sick leave per year, with compensation for the initial 30 days. If an employee has not completed six months of service, sick leave can be taken but without pay. A medical certificate is mandatory for all instances of sickness.

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Maternity leaves

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Laws around maternity leaves are as follows:

• Employees have the right to 14 weeks of maternity leave 
• Employees are compensated through Myanmar's social security scheme. 
• Maternity leave can commence six weeks before the anticipated due date and extends for eight weeks after childbirth.
• An additional four weeks of leave are permitted in situations of multiple or complicated births. 
• In the event of a miscarriage, the employee is entitled to six weeks of leave.

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For adoptive mothers caring for a child below the age of one, eight weeks of paid leave are granted.

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Paternity leaves

Fathers are eligible for 15 days of paid paternity leave upon childbirth. However, if the child's mother is not covered by social security, the father's entitlement is reduced to 25.00% of their average salary. In the case of twins, the entitlement increases to 37.50%, and for triplets, it rises to 50.00%.

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Tax and Social Security contribution:

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Employer Payroll Contribution

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Employee Payroll Contribution

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Employee Income tax

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Employers can conclude a fixed-term contract based on business, personal, or worker misconduct reasons. The termination process necessitates providing notice and a written justification. In cases of misconduct, a prior warning is required, allowing the employee an opportunity to clarify their actions.

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Prior to termination for misconduct, the employee should receive one written and two verbal warnings. If another breach occurs within 12 months after the third warning, the employer can terminate the employee without notice or severance pay. In cases where the employer initiates termination, wages must be paid within two working days from the last day of employment.

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Severance Pay

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Severance pay in Myanmar is determined based on the employee's length of service. For individuals with a tenure ranging from 6 months to 1 year, the severance is equivalent to half a month's wages. Those employed for 1 to 2 years are entitled to 1 month's salary, while employees with 3 to 4 years of service receive 2 months' salary. The scale increases progressively, with individuals serving 4 to 6 years entitled to 4 months' salary and those with 6 to 8 years receiving 5 months' salary. Further increments are observed for employees with 8 to 10 years (6 months' salary), 10 to 20 years (8 months' salary), 20 to 25 years (10 months' salary), and those with over 25 years of service eligible for 13 months' salary as severance pay.

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Notice Period

In Myanmar, the standard notification period is one month.

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Probation period

Usually, the probationary period extends for a maximum of 90 days.

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Expanding your workforce worldwide has many compliance challenges — from employment laws to data protection and diversity requirements. At Gloroots, we help you streamline this process with our EOR platform. Our experts handle everything from employment contracts to on-time payments and compliant benefits. This way, you can concentrate on talent acquisition while we ensure a stress-free global employment experience for both you and your employees. Connect with our experts today to kickstart your global hiring journey.

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Whether you're aiming to strengthen your workforce in the rapidly growing tech industry or seeking experienced leaders to oversee operations, Myanmar presents diverse opportunities.

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Navigating Myanmar's unique business landscape and fulfilling specific skill requirements can be efficiently achieved by partnering with Gloroots. Their local expertise ensures a seamless recruitment process, compliance with regulations, and successful integration into the Myanmar market.

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