In order to navigate employment regulations in Thailand, particularly when establishing an offshore company, a thorough understanding of the legal landscape is required. Employment contracts are crucial in protecting both employers and employees. We recognize the importance of a solid employment contract and the complexities of wage regulations at Iris International. From formation to incorporation, we ensure compliance with employment laws, cultivating confidence and safety in your Thai business endeavors.
Employment contract types in Thailand
The Thai legal code permits both fixed-term and permanent contracts, both in written and verbal form. Even though it is not required in Thailand, it is always recommended to create a thorough employment contract for any new hires.
Contracts safeguard both the employee and the employer from potential legal conflicts. However, the Thai legal system frequently judges in favor of an employee in the absence of a clearly defined contract. Avoid using online-generated generic templates, as these can be riskier for international recruiting if they lack country-specific requirements.
Employment contracts must include the following fundamental clauses:
- The duties and obligations of an employee
- Expense bundles
- Expectations for remuneration
- Termination prerequisites
Wages
In Thailand, minimum wage, overtime pay, and other wage-related regulations are mandated by law. The provincial government determines the minimum wage, which varies depending on the location of the employment. Work beyond 8 hours per day or 48 hours per week typically requires overtime pay, which is typically calculated at 1.5 times the regular hourly wage. Employers are also required to provide employees with annual bonuses, which are based on the employee’s duration of service.
Typically, wages are determined based on an employee’s hourly, daily, or monthly rate and are paid at least once per month. Employers must maintain records of wages and hours worked, including paystubs, in accordance with local regulations. Employers must ensure compliance with minimum wage, overtime pay, and other wage-related regulations in order to avoid penalties or legal issues.
Working Hours
The standard work week in Thailand is 48 hours, with a daily maximum of 8 hours. Overtime is permitted but is limited to 36 hours per week and must be compensated. Also required is at least one day off per week for rest periods.
There may be unique requirements or exceptions for various employee types, industries, and employment functions. For instance, the hospitality and healthcare industries may have distinct working hour limits and rest period requirements than others.
Employment Benefits
In Thailand, employers are required or expected to provide mandatory and customary benefits to their employees. These may consist of paid vacation, medical leave, maternity leave, and retirement plans. The specific eligibility requirements for these benefits may vary based on employment duration, job position, and industry.
Public holidays
Employers must provide Thai workers with a minimum of 13 public holidays per year.
Sick leave
Employees are entitled to sick leave as long as the employee is ill, 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. A worker is permitted up to 30 days of medical leave per year.
Maternity leave
A pregnant employee is eligible for a maximum of 98 days of maternity leave (holidays included). The leave includes time spent receiving prenatal care. The expectant mother can anticipate receiving equal pay for up to 45 days during her leave.
Paternity leave
State employees and those working in the public sector are eligible for up to 15 days of paid leave within 30 days of the delivery of a child. Officials who take additional leave to care for their newborns will not be compensated. In the private sector, paternity leave is not mandated by law, but employers may offer paid or unpaid leave.
Leave for military service
Male employees are entitled to depart for military service for inspection, military drills, or readiness testing, and will receive basic pay at the same rate as normal working days for up to sixty days.
Personal business leave
Employees are entitled to three days of personal business absence per year. Business leave cannot be deducted from annual leave.
Training leave
An employee may take time off for training or skill development in the following circumstances:
- Acquiring abilities to enhance labor and welfare, or to enhance an employee’s performance at work.
- The government-mandated testing of an employee’s educational level is not applicable if the training was requested by the employee. All leave requests must be submitted to the supervisor at least seven days in advance, and an employee may only take leave after obtaining the supervisor’s approval; however, this leave is unpaid.
Social Security
Social Security Thailand has a social security system that provides health, disability, maternity, unemployment, and mortality coverage for employees. Employers and employees both contribute to the system, which is administered by the Social Security Fund (SSF). Employers must register their employees with the SSF and make monthly contributions for them.
Employers are required to contribute a corresponding percentage of the employee’s wages to the social security fund, subject to a maximum. Employers must also submit monthly reports to the SSF detailing employee compensation, contributions, and other pertinent information.
Employer Contributions:
- 3 % – Pension
- 1.5 % – Health Insurance
- 0.50% – Unemployment
- 0.2% – 1% – Injuries on the job
Contributions by Employees:
- 3% – Pension
- 1.50% – Health Insurance
- 0.50% – Unemployment
- 5% – Total cost of employment
How Iris International can support HR management?
Iris International’s expertise extends beyond Thai offshore company registration. We are committed to guiding you through complex employment laws and compensation structures. From drafting employment contracts to ensuring compliance with regulations regarding employee benefits, we are your trusted partner. With our assistance to establish your offshore business, but also to navigate the nuances of Thai employment, nurturing a compliant and harmonious workplace. Contact us immediately to embark on this voyage with a reliable companion.
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