Before embarking on Thailand company registration, it is important to familiarise yourself with Thai labour laws. Foreign investors are sometimes guilty of believing that Thai employees are not well protected because the cost of living and wages in Thailand are lower than in Western nations. In actual fact, the Labour Protection Act of 1998 protects employees and applies to all companies with at least one employee. If you disobey the rules and regulations of the Act, expect to face severe sanctions. The Act was amended in May 2008 to protect outsourced and indirect workers. It also allows the Courts to make adjustments to work rules & regulations and unfair contracts of employment.
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Maximum Working Hours
As well as using a legal team to help you with the intricacies of Thailand company registration, you would be well served to use their help to get accustomed to the laws contained within the amended Act and inform you of any changes or proposed alterations. When it comes to work hours, the maximum is 48 hours or 8 hours a day for work considered to be ‘non-hazardous’. ‘Hazardous’ work can only be performed by any employee for a maximum of 42 hours a week or 7 hours a day.
The employee and employer can arrange their work schedule as they see fit but no worker must be forced to work beyond 48 hours in a week. If an employee works above 48 hours a week, he/she must receive at least 1.5 times their normal rate for every hour of overtime. 36 hours of overtime a week is the maximum time allowed. Employers must allow workers to have a one hour break when five consecutive hours have been worked. Although breaks can be less than 60 minutes at a time, the total breaks taken during the day must meet or exceed an hour.
Other Employee Rights
When deciding on Thailand company registration, you are better off assuming that employees have rights that are similar to workers in the UK or US for example. All employees are allowed 13 national holidays a year plus an additional 6 days of vacation time once they have worked with the same company for a year.
Believe it or not, employees are entitled to 30 days of paid sick leave each year! Sick leave of less than three days does not have to be accompanied by a medical certificate. Interestingly, foreign investors never complain about this system being abused as Thai employees have excellent attendance records. Once an employee has worked for more than 120 days, he/she is allowed 30 day’s worth of severance pay. This rate increases according to length of service. If you wish to fire an employee, you must provide 30 day’s notice.
As you can plainly see, employees are well protected and respected in Thailand. Before you embark on Thailand company registration, use a legal team to help you learn more about employee rights though you will find that they are not much different to so-called ‘developed’ nations around the world.
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