Thailand Employment Laws: What You Need to Know Before Starting a Business in Thailand

Types of Employment Contracts

1. Permanent Contracts

These contracts symbolize an ongoing employment relationship with no predetermined end date. It offers stability to employees and is commonly used for roles that require a long-term commitment.

2. Fixed-term Contracts

These are designed for employment provided a specific duration, often used for projects with a clear end date or seasonal work. It’s essential to specify the termination date clearly in the contract to avoid potential legal issues.

3. Temporary Contracts

Ideal for short-term assignments or specific projects, these contracts might be used for call center, event planner business, or short-term initiatives.

The Key Areas of Thai Employment Law:

Working Hours and Overtime

• Standard workweek: While not legally mandated, a 5-day workweek with 8 hours per day is the most common practice.Thai labor law stipulates the maximum working hours as not more than 48 hours per week.
• Overtime pay: 1.5x regular wage for exceeding 8 hours/day, 3x for holidays
• Daily rest period: 1 hour after 5 consecutive working hours

Minimum Wage

• AS of 2024 , Varies by province start at THB 330-370 per day

Leave Entitlements

Annual Vacation Days

• Employees who have worked continuously for 1 year are entitled to no less than 6 working days of annual vacation per year.
• Employees are entitled to receive wages on their annual vacation days.
• For employees who have not yet completed 1 year of work, proportional vacation days may be granted.
• Employers must inform employees of their annual vacation days in advance or as agreed upon.
• Employers and employees may agree in advance to accumulate and defer annual vacation days to be taken in subsequent years.

Sick leaves

• Employees can take sick leave as needed, with pay for up to 30 working days per year. However, from the 31st day onwards, no wages will be paid for sick leave.
• For sick leave of 3 or more consecutive working days (counting only working days), the employer may require the employee to provide a medical certificate. If no medical certificate is available, the employee must explain the situation to the employer.

Personal leaves

• Employees can take leave for necessary personal business for at least 3 working days per year, with normal pay for up to 3 working days per year.
• If the company allows 3 days of personal leave per year and the employee needs additional personal leave, they can take unpaid leave or use their annual vacation days, according to the company's rules and regulations.

Examples of necessary personal business include:

• Obtaining an ID card, driver's license, or dealing with government matters.
• Attending family matters such as taking parents or children to see a doctor.
• Serving as a court witness under a subpoena.
• Engaging in religious practices according to customs.
• Attending one's own wedding or organizing a child's wedding.
• Organizing a funeral for a family member (parents, siblings, spouse, children).
• Attending one's own graduation ceremony.

Other leaves:

• Maternity leave: 90 days with pay, additional 30 unpaid days optional
• Paternity leave: Up to 15 days with pay
• National holidays: Paid time off for designated holidays

Social Security

• Mandatory registration for employees
• Employer contributions required for healthcare, unemployment benefits, etc.

Termination of Employment

• Specific procedures required, including notice periods and potential severance pay
• Severance pay depends on employee's length of service

Work Permits

• Foreign employees need Non-Immigrant B Visa and work permits
• Requirements vary based on position and nationality

Payment Frequency

• Employers in Thailand usually disburse salaries on a monthly basis.

Detailed Payslips

• Employees should receive detailed payslips, elucidating their gross salary, the various deductions made, and the final net pay. This ensures transparency and allows employees to verify that deductions align with the stipulations of the Labour Protection Act.

Tips for Employers in Thailand

• Stay up-to-date on minimum wage requirements, work hours, overtime regulations, and leave policies. Consider consulting a lawyer specializing in Thai labor law.
• Ensure foreign employees possess the correct work permits and visas. You can assist by providing guidance and necessary documents.
• Draft clear and concise employment contracts in Thai and English (if applicable) outlining job duties, compensation, benefits, termination clauses, and confidentiality agreements.
• Understand and comply with Thai social security contributions and employee welfare programs.

Building a Strong Workplace:

• Effective Employment Policies: Develop clear and comprehensive policies on topics like workplace conduct, harassment prevention, discrimination, and social media usage.
• Open Communication: Encourage open communication with employees. Regularly address concerns and maintain transparency.
• Grievance Procedures: Establish a fair and clear grievance procedure for employees to voice concerns and seek resolutions.
• Performance Management: Implement a system for performance evaluation and feedback to motivate and develop employees.
• Workplace Culture: Promote a positive and respectful work environment. Consider employee engagement activities and team-building exercises.

Thailand's employment laws form the bedrock of a fair and equitable labor market. By understanding and adhering to these regulations, employers and employees alike can contribute to a thriving and sustainable work environment.

So, when you decide to build your business here, you need to understand the laws deeply to protect yourself and to provide your employees with basic benefits and create a good environment.

Now that you've learned all the basics, are you ready to start? Contact us! We offer full support for all the necessary things in a successful business.