Understanding labour & employment law in Thailand.

When expanding into Thailand and operating their business in the kingdom, foreign (and local) businesses must comply with all employment and labour laws and refrain from unfair labour practices to avoid being penalised.

In this article, we have listed some of the most important provisions of Thailand’s Labour Protection Act that employers should know when hiring, managing and terminating employees.

Types of employment contracts in Thailand

Thailand’s employment legislation permits both fixed-term and permanent contracts, both written and verbal. Even though it is not compulsory, it is always advised to prepare a thorough employment contract for any new recruits in Thailand.

Contracts protect both the employee and employer from any potential legal disputes. However, the Thai legal system often rules in favour of an employee if a clearly defined contract is not in place. Avoid using generic online generated templates, as these can be riskier when hiring internationally if they do not include specific in-country requirements.

Employment contracts must include such basic parameters as:

• The role and responsibilities of an employee
• Benefit packages
• Compensation expectations
• Termination requirements

Key provisions of the Labour Protection Act in Thailand

Salary and wages

Minimum wages in Thailand range from 328 THB to 354 THB per day. Wages typically vary from province to province.

Work hours and overtime compensation

Eight hours a day, or 48 hours per week for regular work, seven hours per day, and 42 hours per week for hazardous one. All employees are entitled to at least one hour of daily rest after working five consecutive hours.

Any extra hours beyond the standard eight on a typical workday are compensated at 150% of the employee’s hourly wage. Up to 8 hours of work during a holiday or day off are paid at a base rate of 200%, and any additional hours worked during a holiday or day off are paid at a rate of 300% of the base hourly rate.

Hiring employees with disabilities

According to the Empowerment of Persons with Disabilities Act B.E. 2550 (2007), employers who hire disabled employees are eligible for a tax exemption at a certain percentage of the amount of wage the employee receives from the employer.

Public holidays

Employees in Thailand are entitled to a minimum of 13 public holidays by an employer.

Sick leave

Employees are entitled to sick leave as long as the employee is sick, and if the employee takes a sick leave for more than three days, the employer may require a medical certificate from a licensed physician or official medical establishment. An employee is allowed up to 30 days of sick leave in a year.

Maternity leave

The maximum number of days of maternity leave that an expectant mother is entitled to is 98 (inclusive of holidays). The leave includes the time taken for prenatal care. The expectant mother can expect to receive for up to 45 days of equal pay throughout the leave period.

Paternity leave

Within 30 days after the child’s birth, state employees or those working in the public sector are eligible for up to 15 days of paid leave. Officials who take extra time off to care for their infants will not be compensated. In the private sector, paternity leave is not granted by statute, although employers can provide paid or unpaid time off.

Military service leave

Male employees are entitled to leave for military service for inspection, military drilling or for readiness testing and get his basic pay at a rate equal to normal working days during the leave but not exceed 60 days.

Personal business leave

Employees are entitled to a personal business leave of three working days a year. The employer cannot deduct business leave from annual leave.

Training leave

An employee is entitled to take leave for training or skill development in accordance with the following cases:

• Acquiring skills to improve labour and welfare, or to increase the employee’s effective at work
• Testing of educational level as required by the government; however, it is not applicable where the training is at the request of the employee. All leave requests must be submitted to the supervisor at least seven days in advance, and an employee shall leave only after receiving the approval from the supervisor and an employee shall not get the basic pay for this leave.

Social protection

Employers must register their employees with the Workmen Compensation and Social Security Fund (SSF). Both employees and employers must contribute 5% of the staff member’s income (up to a maximum of 750 THB per month).

Termination of employment

The employer and the employee have the right to terminate the contract after filing a written notice before the payment date if the contract does not define the required duration or term. An employer is not obligated to provide severance compensation to an employee in the event of malpractice or dishonest work. See our guide on terminating employees.

Notice period

The notice period is 1-3 months, depending on company policy.

Severance pay

Employment in Thailand can be terminated without a specific cause. The severance pay is as follows:

How Acclime can help with your HR needs

In conclusion, hiring and maintaining employees is vital for any business to run smoothly and efficiently. As an employer in Thailand, it is crucial to familiarise yourself with the labour laws and regulations set forth by the government to ensure that you are providing fair and legal treatment to your employees. By following these regulations, you can create a positive working environment, reduce the risk of legal disputes, and maintain a good reputation in the business community. Overall, understanding and following Thai Labour Law is essential for the success of your business.

Contact Acclime to get help with HR-related matters in your business. As a professional services provider, we can ensure your compliance with Thai labour laws, draft employment contracts and handle any HR administrative work for your employees. If you aren’t ready to set up an entity in Thailand, we can even employ staff on your behalf through our EoR services.