Table of Contents

Thailand

Table of Contents

Currency

Thai Baht (THB)

Payroll Frequency

Monthly

Employer Taxes

5%

About Thailand

Thailand is a southeast Asian nation with Bangkok as its capital city. Political stability fluctuates due to the constant coups but Thailand continues to have a monarchy that appears to have a strong partnership with its military. The government controls the media, television, and radio stations but the media are also granted the freedom to speak out and criticize the government for oppression, corruption, abuse of office, among others. Thai culture is deeply rooted in Buddhism where Buddhist beliefs and values are incorporated in their day-to-day lives while exemplifying traditional Buddhist values of mutual respect and self-control. Their cuisine is very popular worldwide and the country has become a major tourist destination of late. Its beaches and resorts are a popular destination for celebrities and regular folk, alike!

Employment Relationship

• Permanent Employment

Thailand's labor law does not define what it means to be a permanent employee. However, employers are not permitted to hire employees on a fixed-term contract for tasks of a permanent nature. Employment contracts are typically established for a  fixed period that is mutually agreed upon and expire upon completion of said employment period. If a contract does not specify a termination date, it is considered to be of an indefinite period.  Where the period is not specified in the contract of employment, an employer or an employee may terminate the contract by giving advance notice in writing to the other party at or before any due date of wage payment in order to take effect on the following due date of wage payment. The advance notice need not be longer than three months. In addition, a probationary employment contract is deemed to be an indefinite contract of employment for notice purposes.

• Fixed-Term or Specific-Purpose Contracts

In Thailand, employment under a fixed-term contract is allowed in the following circumstances: the employment occurs either for a specific project that is not part of the normal business or trade activities of the employer and requires a fixed start and end date, the work is occasional and has a definite end date, or the work is seasonal, and the employment occurs during the work season in question. Work under a fixed-term contract must be completed within a period not exceeding 2 years. The employer must sign a contract with the employee at the beginning of the employment period. If a contract of employment reaches its expiry date, and the employee continues working without objection from their employer, this shall be taken as confirmation that a new employment contract has been established.

• Temporary Employment Contratcs

The Labour Protection Act of Thailand does not directly address the issue of temporary work agency employment. However, it does state that companies who hire an individual (and not an employment agency) to recruit other individuals for work, and the work is part of a manufacturing process or business operations under the company's responsibility, then the company will be deemed as the employer of those workers. If the recruited workers perform work in the same manner as employees under a regular employment contract, the workers must receive the same benefits as the employees under contract.  

Probationary Period

Thailand's employment law does not mandate a probationary period.  In practice, an employee becomes eligible for severance pay after working for 120 days, so many businesses consider the maximum probationary period to be 119 days.  The only reference to a probationary period in Thailand's Labour Protection Act is a provision that states that "a probationary contract shall also be deemed as an indefinite period contract of employment." However, this does not mean that a probationary employee is given the same employment protections as a regular, permanent employee.

Working Hours

Thailand's labor law states that a normal working day lasts 8 hours and cannot exceed 9 hours. The total normal working hours per week cannot exceed 42 hours. In instances where the employer and employee have arranged overtime work, the additional work cannot exceed 9 hours daily and 48 hours weekly.

Holidays / PTO

• Statutory Holidays

1 January: New Year’s Day; Full moon, 3rd Thai lunar month (February): Magha Puja; 6 April: Chakri Memorial Day; 13–15 April: Songkran Festival; 5 May: Coronation Day; May arbitrary date: Royal Ploughing Ceremony and Farmer’s Day; Full moon, 6th Thai lunar month (May): Vesak; Full moon, 8th Thai lunar month (July): Asalha Puja; First waning moon, 8th Thai lunar month (July): Beginning of Vassa; 12 August: The Queen Sirikit’s Birthday; 23 October: King Chulalongkorn Day; 5 December: King Bhumibol Adulyadej’s Birthday Anniversary; 10 December; Constitution Day; 31 December: New Year’s Eve.

• Paid Annual Leave

Thailand's labor law provides that an employee is entitled to annual leave of at least 6 days after working for an uninterrupted period of 1 year with the same employer. Employees are paid at their normal wage rate for the duration of annual leave. The employer must fix the days of leave in advance for the employee or conclude an agreement with the employee regarding the days of leave. The employer and the employee may agree in advance to accumulate any annual leave that has not yet been taken in a year and postpone it to following years. The employer can choose to provide annual leave on a pro-rata basis for employees who have not completed 1 year of service. If employees' contract is terminated by the employer before, they must be paid for the unused annual leave for the year.    

• Sick Leave

Under Thailand's employment law, employees are entitled to 30 days of sick leave per year. An employee can take up to 2 consecutive days of sick leave without explanation. If the sick leave period is 3 days or more, the employer can require that the employee produce a certificate from a physician or medical establishment. The law states that employees who do not provide a certificate must give an explanation to the employer. During an employee's sick leave, the employer must remunerate the employee at their regular pay rate. Employees must be remunerated in the same method as they normally would when working. Employees are entitled to paid sick leave beyond 3 days if they provide a medical certificate.

• Maternity Leave

In Thailand, pregnant employees are entitled to maternity leave of no more than 98 days for each pregnancy. Any maternity leave taken includes holidays that occur during the period of leave. Employers are obligated to pay normal wages to a female employee during the first 45 days of the maternity leave period. An employer is prohibited from requiring a pregnant employee to work between 10:00 PM and 6:00 AM, to work overtime, or to work on holidays. If a pregnant employee works in an executive position, in academic work, in clerical work, or in work relating to finance or accounting, the employer may require the employee to work overtime provided that there is no effect on the employee's health and the employee gives prior consent on each occasion.

• Paternity Leave

Thailand's labor law does not contain any provision regarding paternity leave in the private sector. Government sector employees may receive paid paternity leave of up to 15 consecutive working days, to be taken within 90 days after birth. Any paternity leave that an employer wishes to grant to an employee is arranged through private negotiations. There is no government-mandated paternity leave provision.

Termination of Employment

• Notice Period

The labor law of Thailand states that where a date of termination is provided in the employment contract, the employer need not give advance notice of dismissal. Where no period of time is specified in the contract of employment, the employer or the employee may terminate the employment contract by providing advance notice in writing to the other party on or before the due date of wage payment for the termination to take effect on the following due date of wage payment. For example, for employees paid on the 5th of each month, notice on or before April 5th is required for termination to be effective on May 5. The advance notice need not be longer than 3 months. In addition, a probationary employment contract is deemed to be an indefinite contract of employment for notice purposes. An employer is permitted to pay the wages due to the employee during the notice period and immediately dismiss the employee.

• Severance Benefits

Thailand's labor law mandates the payment of severance benefits to dismissed employees as follows: If the employee has continuously been employed with the employer for more than 120 days, but less than 1 year, they will be entitled to a payment equal to 30 days of wages. If the employee has continuously been employed with the employer for more than 1 year but less than 3 years, they will be entitled to a payment equal to 90 days of wages. If the employee has continuously been employed with the employer for more than 3 years, but less than 6 years, they will be entitled to a payment equal to 180 days of wages. If the employee has continuously been employed with the employer for more than 6 years, but less than ten years, they will be entitled to a payment equal to 240 days of wages. If the employee has continuously been employed with the employer for 10 or more years, they will be entitled to a payment equal to 300 days of wages.