You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

February 3, 2017

Thailand Introduces New Minimum Wage Rates for 2017

Subscribe to Updates
Bangkok Post, Corporate Counsellor Column

The minimum wage in Thailand has been driven—both theoretically and historically—by the cost of living, inflation, and work efficiency, which often vary from province to province.

The government, through the Ministry of Interior, first passed legal measures to regulate the minimum wage for workers in Thailand in 1972. Consideration was made to the cost of living, standard of living, cost of goods production, business capacity, and the economic and social conditions applicable to specific local geographical areas.

Minimum Wage Rate

In 1998, the term “Minimum Wage Rate” was included in the definition section of the Labor Protection Act for the first time. Section 5 of the Act defines “Minimum Wage Rate” as the minimum rate of wages determined by the Wage Committee under this Act.

While a formal legal definition of Minimum Wage Rate has not yet been set, the Wage Committee in 2016 applied the rationale of “a sufficient wage rate for a worker to develop skills to enable such worker to have a livelihood that is appropriate to his or her economic and social conditions, and to have a standard of living that matches with local business capacity” to determine the applicable minimum wage rate, pursuant to the explanatory notes to the Notice of the Wage Committee titled “Minimum Wage Rate (No. 8).” The term “per day” means seven hours for work that endangers the health and safety of employees, and eight hours for all other work.

The national minimum wage rate that was established in 2013, whereby all workers would be granted a uniform wage rate of THB 300 (approximately USD 8.50) per day regardless of the province in which they were employed, came to an end earlier this year.

Provincial Variation

According to the “Minimum Wage Rate (No. 8)” Notice, which came into effect on January 1, 2017, Thailand’s minimum wage system will now vary from province to province, similar to the pre-2013 national minimum wage system. The main reason behind the change was to support the standard of living of workers residing in major cities, such as Bangkok, where the cost of living is comparatively higher. The 2017 minimum wage rate system has been adjusted to match the cost of living, inflation, and work efficiency in each individual province. This marks the first minimum wage adjustments since 2013.

The table shows the minimum wage rates applicable to each province. An employer is prohibited from paying a wage that is lower than these minimum wages to an employee.

Skilled Labor

In accordance with the National Wage Committee’s Notification on Wage Rates for Skilled Workers According to Skills Standards (No. 6) on January 24, 2017, “Skilled Workers” are entitled to higher minimum wages, effective April 24, 2017.

For specific professions, the minimum wage rates will range between THB 370 and THB 600 per day, depending on the worker’s skill level. These professions include mechanical drawing technicians, tungsten inert gas (TIG) welders for mechanical and metal work, transmission technicians, hydraulic technicians, cooler and air conditioning pipe welders, large air conditioner technicians, air conditioner assemblers, small cooling room technicians, auto-milling machine technicians, electrical discharge machine (EDM) and wire-cut EDM technicians, and mold polishers.

Penalties for Noncompliance

Employers who fail to pay the minimum wage rates prescribed under the law may face an imprisonment term of up of six months, or a fine not exceeding THB 100,000, or both. It is important for employers to be aware of the relevant minimum legal requirements with regard to wages, and when these will take effect, in order to avoid punishment for failing to fulfill their duties.

Overall, the new minimum wage rates for both unskilled and skilled workers signal the Thai government’s strategy to progressively move the Thai labor force up the value chain. However, it is important that the government also continues to ensure that Thailand maintains the key elements of affordability and price attractiveness in its labor force, particularly within Asean, in order to secure and solidify Thailand’s position as a manufacturing hub and country of choice for investors.

Download Full Article
Related Professionals

Practices

Employment

Location

RELATED INSIGHTS​ 

February 22, 2021
Following the recent imposition of sanctions on Myanmar individuals and companies by the US, the UK and Canada have now imposed new sanctions. As with the US sanctions, these new measures impact UK and Canadian citizens and companies, and non-UK and non-Canadian companies and citizens with interests in those jurisdictions. The EU has indicated that it is planning to issue similar sanctions in the near future. New UK Sanctions In addition to the 16 individuals already sanctioned by the UK government, on February 18, 2021, the UK government announced that three individuals have been sanctioned for serious human rights violations and are now subject to asset freezes and travel bans. The full list of Myanmar individuals and companies sanctioned by the UK is available on the website of the Office of Financial Sanctions Implementation. Breaches of UK financial sanctions are criminal offences punishable in the UK by up to 7 years imprisonment and heavy fines. New Canadian Sanctions Also on February 18, timed to coincide with the UK sanctions, new Canadian sanctions were imposed on nine individuals. As with the UK, Canada already had a number of individuals in the Myanmar military on its sanctions list, and the new additions bring the total number of individuals sanctioned by Canada to 54. All assets of these individuals in Canada are now frozen, and they are banned from travelling to Canada. Canadian businesses or entities may not do business with any of the 54 individuals. Full details of the impact of the sanctions are available on the Government of Canada’s website, as is a database of the Myanmar individuals and companies subject to them. Breach of Canadian sanctions carries with it up to 5 years’ imprisonment in Canada and/or a large fine. Other Countries The EU is reportedly drawing up sanctions
Read More
January 26, 2021
On January 1, 2021, the government of Vietnam issued Decree No. 152/2020/ND-CP dated December 30, 2020, providing guidance concerning foreigners working in Vietnam (Decree 152). Foreign investors and expatriates should be aware of some notable new points.
Read More
January 12, 2021
Due to the resurgence of the COVID-19 pandemic in Thailand since December, 2020, Thailand’s Ministry of Labor recently published two regulations under the Social Security Act (SSA) in the Government Gazette: The Regulation on Entitlement to Compensatory Benefits in the Event of Unemployment Due to Force Majeure from the Pandemic of Dangerous Communicable Disease Under Relevant Law Relating to Communicable Diseases B.E. 2563 (2020) (the Force Majeure Regulation); and The Regulation on Determination of the Amount of Contributions to the Social Security Funds B.E. 2563 (2020) (the SSF Contribution Regulation). Details of the two regulations are provided below. The Force Majeure Regulation This regulation is similar to a previous regulation from April, 2020, during the first wave of the pandemic, stating that the definition of force majeure under the Social Security Act B.E. 2533 (1990) (the SSA) includes hazards from pandemics of dangerous communicable diseases (including COVID-19). This definition therefore affords protection to insured persons (i.e., employees) in the event that the COVID-19 pandemic results in their being unable to work, or their employers being unable to operate their business normally. This regulation allows the Social Security Office (SSO) to pay compensation to employees who: are insured persons who qualify to receive compensatory benefit in case of unemployment in accordance with the SSA; have to cease working temporarily during the period from December 19, 2020 onwards; and do not receive wages from their employer during the temporary cessation. This applies only if the circumstances above result from the following force majeure events related to hazards from COVID-19 (or other pandemics of dangerous communicable diseases that affect the public under the Communicable Diseases Act B.E. 2558 (2015)): The employee cannot work, or the employer does not allow the employee to work, because of quarantine or to comply with a COVID-19
Read More
November 3, 2020
Many Thai and international companies have expanded rapidly into Myanmar in recent years, in what had seemed to be an unstoppable expansion of cross-border trade resulting from the country’s emergence back onto the global stage. For those companies, the COVID-19 situation in Myanmar has been a cause for much concern and uncertainty—doubly so for those who had hired staff in the jurisdiction, as a lack of clarity regarding their obligations as employers was compounded by a lack of information on the situation on the ground.
Read More