Employ Candidates Compliantly in Thailand

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  1. Overview: Thailand
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Contractor vs. employee: which is better?
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Global HR Compliance in Thailand

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Thailand Guide below will help you understand the nuances of labor legislation in the country.

Companies hire international workforce for various reasons but in most cases they are:

  • entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
  • hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.

Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.

If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Thailand, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Thailand and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.

We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Thailand.

See the guide below for a general overview of labor rules and regulations in Thailand or contact us if you need to employ workers in Thailand or would like to get more details.

Hiring and Firing Workforce in Thailand Guide

This article presents a general guideline of what is doing business in Thailand about and must not be regarded as or substituted for a legal advice when needful.

Employer-employee relationship is generally regulated by the Ministry of Labor with the help of different Acts and Thai Civil and Commercial Code.

Thailand has stringent rules as to how to go about the subject of probation period, minimum working hours per work day/work week, minimum wage, public holidays, annual leave and sick leave entitlement. Based on the stipulated standards, the following are the basic facts that one should be aware of before proceeding to do business in Thailand:

# Employment Contracts

An employment contract can be for a definite period or an undefined term, and may be provided in writing or orally. According to the Thai Civil and Commercial Code and Labor Protection Act, an employer must lucidly specify the wage, overtime rate, annual leave, sick leave, holidays and entitlements, as well as requirements for termination and severance pay.

# Minimum (Statutory) Employment Rules and Regulations in Thailand

# Hours of work
Employees in Thailand have a statutory maximum of 8 hours to work per day and 48 hours per week. In companies in which the work is considered injurious to health or safety, as stipulated by law, working hours must not exceed 7 hours a day and 42 hours a week in total.

# Probation period
The period of probation permitted in Thai Labor Law is 120 days. An employer who is not satisfied with the work performance of his new employee has the right to end the contract of employment while he/she is still on probation.

# Annual leave
All employees are entitled to 13 paid holidays, spread over the calendar year from New Year’s Day to Makha Puja Day, Chakri Day, Songkran Festival, Labor Day, Coronation Day, Visakha Puja Day, Asanha Puja Day, Her Majesty the Queen’s Birthday, Chulalongkorn Day, His Majesty the King’s Birthday, Constitution Day and finally to New Year’s Eve. Employees have the right to take a day off during the work week to compensate for any holiday that falls on a weekend. In addition to these holidays, employees who have worked a minimum period of one year in the same company are entitled to 6 days of paid annual leave or more.

# Parental leave
Pregnant employees are entitled to 90 days’ maternity leave with 45 days of which completely paid by the employer and the rest by the Social Security. Not all employees are eligible for the payment from the Social Security Fund. Only the employees who have contributed to the system at least 7 days before the time of pregnancy.

# Sick leave
30 days of paid sick leave are made available to sick employees on an annual basis. If at the completion of the 30 days the employee still needs some days off for sickness, the employer must grant him/her that, but without pay.

# Overtime
Employees are allowed to work up to 36 hours of overtime a week. Overtime worked during the working days is compensated for at 150 percent of the employee’s normal hourly wage and at a triple rate if it is worked during any of the specified holidays.

# State minimum salary
The legal daily minimum wage that is effective in 2017 is 305 baht, and must be paid at the place of work by any means agreed by the employee.

# Employment termination
Contract of employment can be terminated with a notice period of between one week and three months. Dismissed employees are given severance pay based on their length of employment in the company as follows:

  • employees who have worked for 120 days or more (up to one year) – 30 days pay,
  • those who have held their contract for between one year and 3 years – 90 days pay,
  • those between their 3rd and 6th years of employment -180 days pay,
  • those between their 6th and 10th years – 240 days pay, and
  • those who have worked for 10 years and above – 300 days pay

Employees with fixed-term contract are not eligible for severance pay. Also, employees who are dismissed for gross misconduct are not entitled to any compensation from the employer.

Acumen International can help you fast-track your possibilities of entering and expanding your business in Thailand by providing you with an Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any requirement to set up a legal entity first or thereafter.

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