The National Committee for The Minimum Wage (the “Committee”) publicized a Notification on 2 January 2018 in which a new minimum wage of MM4,800 per day, calculated at a rate of MMK600 per hour, was proposed. In relation to the previous effective Minimum Wage (MMK3,600 per day / MMK450 per hour), this represents an increase of approximately 33%.
Since the announcement, consultations to discuss the change were sought from members of the Committee along with various employee and employer organizations. As of May 2018 the proposal was approved by the Union Government after the consultation process. The new Minimum Wage provisions are applicable to all Myanmar workers regardless of location, type of industry and labor.
With the issuance of Notification 2/2018, the preceding Notification 2/2015, dated 28 August 2015, was repealed.
Along with alterations to the minimum wage, Notification 2/2018 reclassifies small- and family-owned businesses as those with less than ten workers, which is five workers less than the classification standards in the previous 2/2015 Notification. As small- and small family-owned businesses are not subject to the Minimum Wage settings, this reclassification effectively reduces the number of entities that can be relieved from the new stipulation.
According to the inflation data (Statista, 2018), there has been a 30.2% increase in prices since 2015. As the increase in Minimum Wage has kept track with inflation, Myanmar workers may well welcome the Union Government’s approval. However, for current and potential employers, the changes could put further constraints on their budgeting and hiring practices.