Businesses in Thailand must be aware of the new act that requires them to provide additional benefits to employees.
Thailand Labour Protection Act (no 7) B.E. 2562 (2019)
The new Labour Protection Act came into effect on May 5, 2019 and provides more benefits for employees. The benefit changes affect severance pay, retirement, maternity leave and business leave.
What's the business impact?
The new laws will require businesses to plan ahead for additional funds that may be needed to cover the increased severance pay for employees that have served for more than 20 years. Businesses will also have to budget for more paid time off for certain groups of employees.
What to do now?
Employers and their HR and payroll departments must take the time to review employment agreements and work rules, as well as employee handbooks. They must ensure that the benefits offered are changed to include the new regulations. Employees also must be informed of the new rules.
- Severance pay for long-serviced employees has increased from 300 days to 400 days.
- Employees can take paid 'business leave' for up to 3 working days per year.
- Maternity leave has increased from 90 days to 98 days with wages paid for 45 days.
- Employers are required to now pay interest of 15% per year (up from 7.5%) if the employer does not pay wages, overtime payment or other remunerations.
- Employers will no longer receive a warning letter to submit forms about employment and working conditions. Instead, if it is not submitted by 31st of January each year, there will be fines up to THB 20,000.
- If there is a change of employer due to a condition, such as a merger, the employee must grant the consent for the change or is entitled to severance pay.
We can help
TMF Thailand provides HR and payroll services to businesses operating in the country and are the experts at understanding the local rules and regulations. Our team can help you with employment consultancy services, reviewing contracts, work rules and handbooks to ensure your business stays compliant with these changes.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.