This guide provides an overview of the Skill Development Promotion Act.
To improve the skills and knowledge of employees, certain employers have an obligation arrange training programmes for their employees.
Let’s learn more about this Act.
What is the Skill Development Promotion Act?
The objectives of the Skill Development Promotion Act are to enhance the skill standard of the labour force, promote occupational knowledge and competence of employees, improve the efficiency of business establishments and protect the public’s safety from hazards associated with work activities.
Companies employing more than 100 employees are required by law to consider the Skill Development Promotion Act and to arrange skill development programmes for at least 50% of its total employees.
Private businesses and educational institutions are also incentivised by the Act to provide apprenticeships and occupational skill training.
Employers or companies that do not arrange skill development training must make contributions to the Skill Development Fund.
Privileges and benefits for training providers
Employers and businesses that arrange skill development training are offered privileges and benefits in accordance with the Act.
Benefits and privileges for general training providers are:
- Special tax exemption from corporate income tax at 100% of the training expenses
- Access to the assistance offered by the Department of Skill Development in relation to personnel training, curriculum development training, training-aide materials development training, training for skill standard testing providers, supervisor training or other similar training programmes
- Access to consultation provided by the Department of Skill Development in relation to skill development processes
- Any other benefits as prescribed by the Ministerial Regulation
Stated in section 34 of the Act, the training provider who operates the labour skill training at the labour skill training centre has additional rights and benefits as follows:
- The right to exemption from import duty and VAT for tools, machines and equipment imported into the Kingdom to use in the labour skill training. The applicant must present a list of the tools, machines and equipment permitted by the committee for consideration.
- The right to deduct electricity and water bills twice the amount the training provider has paid as the expense for the labour skill training for the benefit in the calculation of the income tax
- Other rights and benefits as prescribed in the Ministerial Regulation
Skill training programs
Skill training programs are classified into three categories, which are:
- Pre-employment training
- Labour skill enhancement
- Training for an occupational change
Pre-employment training refers to skill training for people prior to employment to enable them to work in accordance with the skill standards. This includes students or people sent for training by government agencies.
Labour skill enhancement
Labour skill enhancement is additional training provided by the employer to employees to enhance their knowledge and skills relevant to their job fields.
Training for an occupational change
Training for an occupational change refers to additional training provided by the employer for the employees to have additional training outside of the professional field to enable the employee to have knowledge and ability to also work in other fields.
Skill development fund
In addition to arranging skill training programmes, they are required to submit a Skill Development Fund contribution payment form by March of the following year.
Companies that do not arrange any skill development programmes or fail to meet the minimum proportion must pay contributions to the Skill Development Fund at 1% of the current legal minimum hourly wage of the past calendar year x 30 x 12 (months) x the number of employees who have been trained.
If the employer fails to make the contribution in full as required by the law, an additional penalty of 1.5% of the outstanding amount per each month of the delay is imposed until the contribution is made in full.
Businesses employing less than 100 employees (absolutely or on average) must report the number of their employees but are not required to contribute to the Labour Skill Development Fund.
Exceptions to this rule are employers who are:
- A ministry, department or government agency
- A foundation or a charitable/non-profitable organisation
- Focusing their business on activities related to cultivation, planting, fishing, forestry, animal husbandry or salt farming, who does not employ an employee for a whole year and who does not have any other business activities
The purpose of this Act is to enhance the labours’ skill standard in Thailand and further promote and support its professional skill training. Employers are also required to make contributions to the Fund, failure to do so may result in a penalty.
Acclime has a team of professional lawyers that can always assist you in issues regarding labour.