The Labour Bill provides a key step towards establishing economic stability in South Sudan. It establishes the regulatory framework within which employers can operate and create jobs. More specifically the Labour Bill establishes labour institutions, defines general conditions of employment and fundamental rights of workers. The Bill reflects the input of all stakeholders, and is comprehensive in its coverage. This note addresses the potential economic impact of key provisions on the South Sudanese labour market. The labour market in South Sudan is characterised by two key facts. First, the vast majority of workers are engaged in “unpaid” work. This results not only from the concentration of work in subsistence agriculture, but also from substantial engagement in the informal sector. Second, there is a notable lack of marketable skills, represented by low levels of schooling and technical and vocational skills. These two observations serve as the basis for the ensuing discussions. The main message is that South Sudan should focus on increasing the skills of the domestic work force, improving the standard of living generated by unpaid work, and building institutional capacity to provide a market for skilled work by encouraging productive foreign investment. The policies instituted by the Labour Bill may generate unintended consequences that could hurt rather than raise the level and the skill of employment in the country.