Employment Law

Employment Contracts in Thailand

Unlike most countries in Asia, Thailand does not require employers to provide employees with written employment contracts . Nonetheless, it is still best practice for employers to draft concise, strongly worded written contracts. This helps avoid misunderstandings and clarify the rights and responsibilities of employers and employees.

Thai labor law does not require specific terms or language to be included in employment agreements. However, a copy of the agreement written in Thai must be provided to the Employment Department in order for the work permit to be issued. Furthermore, employers must be prepared that Thai courts will uphold the terms in these agreements.

Working with our Thailand PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Fixed Term

Indefinite

Thailand Working Hours

The typical working week in Thailand is 48 hours and the standard working day is 8 hours. If the employer and employee agree to different working hours, this can be done as long as the total working hours per week do not exceed 48 hours. Local employees are entitled to at least one hour's rest after five consecutive hours of work.

Employees are also entitled to at least one day off per week. The period between rest days cannot exceed six days.  

Taxes in Thailand

In Thailand, all employees are entitled to social security funds. This reduces the financial risk of possible lost wages due to illness or injury, pregnancy and childbirth, job loss, and death.

Employers in Thailand are responsible for registering new employees with the Social Security Office. Employers must also notify the Social Security Office of any employee resignation or dismissal in a regularly scheduled monthly report.

For tax purposes, both the employer and employee contribute 5%. For someone with a monthly salary of 1,650 baht, the minimum monthly contribution is 83 baht. For those with a monthly salary of 15,000 baht, the maximum monthly contribution is 750 baht.  

Employees are exempt from tax if their annual income is less than 15,000 baht. For income above this amount, the tax rate will be between 5% and 35%. A tax rate of 35% applies to annual income exceeding THB 4,000,000.

Health Insurance

Thailand provides universal health care to public employees through the citizen welfare system. It also provides social security to private employees (both nationals and expatriates) and universal coverage to all other Thai nationals. The Social Security Fund designates a local hospital for employees where they can receive care free of charge.

Employers may offer supplemental health insurance to employees as an additional benefit. Alternatively, the employer may choose to provide insurance benefits to employees.

Holiday Policy

Take a Vacation

After one year of employment with the company, employees are entitled to at least six days of paid vacation per year. Unused vacation time can be accumulated and carried forward.

Employers can provide additional annual leave in subsequent years. They can also offer prorated leave to employees with less than a year of service.

In order to improve market competitiveness, some employers provide employees with 10 to 15 days of paid vacation every year.

Sick Leave

In Thailand, sick leave is provided as a separate benefit to annual leave. An employee is entitled to one month of paid sick leave each year after working for the employer for one year. If an employee is ill for more than three consecutive days, the employer may require the employee to submit a medical certificate.

If an employee is injured or becomes ill at work, he or she does not have to use sick leave on a subsequent rest day.

Maternity and Paternity Leave

Expectant mothers are entitled to three months of paid maternity leave. The employer pays 50% of this leave and the remaining 50% is paid by the social security system. Maternity leave is fully paid.

State officials or employees whose wives have given birth are entitled to 15 days of paid paternity leave.

Personal Leave

An employee may take personal leave if deemed necessary by the employer's work policy in the contractual agreement.

Military Service Leave or Military Service Leave

Employees in Thailand are also entitled to national service leave or military leave. This type of leave is available to male employees who meet any of the following conditions:

• They are necessary for military exercises
• They need to confirm their military status
• They're leaving to join the army

National Service Leave provides employees with the same salary. Such leave cannot exceed two months.

Training Leave

Employees can take unpaid leave for training purposes or to participate in courses or projects with a defined duration. However, an employer may refuse to provide training leave if it would have a negative impact on the business or if the employee has previously taken three or more leaves of at least one month's duration.

Sterilization Leave

Provide employees with sterilization leave for family planning purposes. Available to both male and female employees who have undergone sterilization surgery. The applicable leave period is stated on the employee's medical certificate.

Other Types of Leave

There are other types of leave available to employees in Thailand, but these are at the discretion of the employer. Some examples of other types of employment leave in Thailand include:

• Marriage Leave – This leave allows a person to be absent from work in order to attend a wedding ceremony. This is based on company policy.
• Huji Leave – This type of leave is only available to Muslim employees and the duration of the leave must not exceed four months.
• Monk’s Leave – This leave is only available to Buddhists and cannot exceed four months.
• Hospital leave – This type of leave allows a worker to miss work to help a relative who is hospitalized.
• Bereavement Leave – This is bereavement leave for workers who have recently lost a loved one.

Termination and Severance

Employers must provide at least one month's written notice before terminating an employee without specific cause. Alternatively, the employer can pay the employee for the notice period.

Employers are obliged to provide severance pay in the following amounts based on length of service:

• Service for more than 20 days but less than one year – one month’s salary and allowances
• One to three years of service – three months’ salary and allowances
• Three to six years of service – six months’ salary and allowances
• Six to ten years of service – 240 days of pay and allowances
• Ten years of service or more – 300 days of pay and allowances

Employees with continuous service of six years or more are entitled to additional compensation if they are dismissed for financial reasons. The compensation is equivalent to 15 days' wages per year worked, with a maximum payment equivalent to 360 days' wages.

Working for more than 180 days counts as one full year of service. This amount is in addition to the severance package mentioned above.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Thailand PEOs can reduce risks for foreign companies and provide guidance during the process.  

Salary and Benefits

Thailand Compensation Law

Thailand does not have a uniform minimum wage. Instead, the minimum wage is determined by the province where the job is located. In 2018, Thailand increased the minimum wage by 5 baht to 22 baht. The minimum wage in industrialized provinces such as Chonburi and Rayong was increased by 7%.

Overtime pay in Thailand is 1.5 times the employee's basic salary on weekdays and 3 times the employee's salary on weekends.

Thailand Welfare Protection

Thailand has 13 paid public holidays every year. This gives employees a total of 15 days of paid time off per year. Employees are also entitled to at least six days of paid leave, although many employers offer 10 to 15 days of paid leave.

Employees in Thailand are also entitled to different types of leave, including:

• national service leave
• Training/examination leave
• sterilization leave
• monk leave
• Hu Ji leaves
• compassionate leave
• wedding leave
• hospital leave

Thailand Welfare Management

Employers in Thailand should be aware of the many supplementary benefits that employees may expect. Even though Thailand has a universal healthcare system, many employers still offer supplementary health insurance as an additional benefit. Many Thai executives and expats will require supplemental health and life insurance as part of their benefits.

Employers can also provide employees with provident funds to encourage retirement savings. Employer contributions to these funds must be equal to or greater than employee contributions. Employers can offer this benefit through a variety of conditions, including length of employment, membership, job title and salary level.

Benefits and Compensation Limitations

Most benefits and pay restrictions will arise from agreements outside the employment contract. While unions and collective bargaining agreements are not the “norm” in Thailand, employers need to ensure compliance with legal minimum standards.

For more questions about compliance employment in Thailand, please consult our official clients or consultants. Or follow our official website public account Remoly.

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