27 Sept 2017
Staff Recruitment in Thailand
Thailand has the second lowest jobless rate in ASEAN, only trailing Cambodia. Among some 40 million Thai people who participated in the workforce in 2016, less than 1% were unemployed. Recruitment of workers, particularly those with the right skill sets, is a recurrent problem faced by foreign companies. The Thai government has, however, set out a number of initiatives in the Twelfth National Economic and Social Development Plan (2017-2021) to improve the skill of the workforce, ranging from education initiatives to job training, with a particular focus on developing skills around science and technology. Meanwhile, the employment of foreign workers is permitted.
The Ministry of Labour (MOL) is the responsible entity in the field of labour and employment. The Labour Protection Act creates the legal framework that sets out the rights and obligations of employers and employees. Familiarisation will be necessary before recruiting, and the key points of considerations include the following:
- Employment of foreign workers is permitted upon approval from the MOL, and a work permit will then be issued. Approvals are dependent on:
- The employer’s financial status – the minimum paid-up capital must be THB 2 million (about US$60,000) per one foreign employee
- The number of Thai employees hired – in the ratio of four Thai employees per each foreign employee
- Minimum wages are applicable with daily rates at THB300 (about US$9).
- Hours worked must not exceed eight hours in one day or 48 hours in one week. There must be a minimum of 13 paid public or traditional holidays per year in addition to the weekly holidays.
- There is a mandatory requirement to make monthly contributions to:
- Worker Compensation Fund – these contributions are assessed on the total wages paid and the type of business, with a rate not exceeding 5% of the total wages paid by the company
- Social Security Fund – the amount payable is 3% of an employee’s income with the maximum contribution of each employee set at THB750 (about US$23) per month
Further information can be found on the Social Security Office website.
- All employees can join a trade union, and all unions must be registered with the MOL. Specialised labour courts have the authority to decide any dispute concerning employment contracts.
- Regulatory Environment
- Establishing a Presence
- Intellectual Property Protection
- Staff Recruitment
- Tax Considerations
- Import/Export Procedures
- Further Information