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Thailand’s labour law framework has undergone significant legal refinement over recent years. Likewise the government has moved steadily toward stronger employee protections as well as stricter enforcement of employer obligations. Note that there are also heavier penalties for non-compliance.
For Thai companies as well as for foreign investors or factory operators. These reforms are not merely technical updates. They affect termination costs, working time compliance, payroll obligations as well as criminal liability exposure.
This article provides a complete, practical guide to:
Severance pay in Thailand is not discretionary. This is a statutory right owed to most employees who are terminated without lawful cause. Employers cannot contract out of these minimum obligations.
The statutory severance structure is based on length of service:
This makes Thailand one of the most expensive termination jurisdictions in Southeast Asia for long-service employees.
Severance is payable in addition to:
Thailand has also clarified and expanded the tax exemption available on severance payments. Meaning that qualifying severance may be partially or fully tax-exempt up to prescribed limits. Payroll departments must apply this correctly. Failure to do so can result in:
Thai labour law strictly regulates:
Although industries vary, the general framework requires:
Overtime must be paid at higher-than-normal wage rates. Common minimum thresholds include the following:
Employers that fail to pay statutory overtime expose themselves to:
Employers must maintain verifiable records showing:
Increasingly, oral instructions and informal approvals are rejected by the Labour Court. If proper records do not exist, the employer is usually presumed to be at fault.
Enforcement of labour law is no longer passive. Inspections, payroll audits, and complaint-driven investigations have increased steadily, especially in sectors employing migrant workers.
Potential penalties include:
The strongest enforcement trend focuses on:
Thailand’s manufacturing, construction, fisheries, and service industries depend heavily on migrant workers, primarily from:
Their employment is governed by both labour law and immigration law. Employers must ensure:
That they have valid work permits
That they have the correct job title and location
Likewise that minimum wage compliance has been met
Where they have been register for Social Security
That there are no illegal deductions
That there is no passport retention
Factories providing dormitories, food, or transport must ensure that any deductions do not push wages below the legal minimum.
If inspectors find:
Employers face:
This area now represents one of the greatest threats to factory continuity and export operations.
The Social Security Fund is mandatory for nearly all employees working in Thailand, regardless of nationality.
Coverage includes:
Both employer and employee contribute monthly, with the government making a supplementary contribution.
These violations often lead to:
SSID violations are one of the most common triggers for multi-employee lawsuits.
This distinction decides whether severance is payable.
An employer may dismiss without severance only in narrow circumstances, such as:
The legal burden is on the employer. Evidence must be documentary, not verbal.
If the employer fails to prove legal cause for dismissal:
Redundancy may include the following:
In all redundancy cases:
This is where full severance applies
Likewise advance notice or payment in lieu is required
Final wages must be paid immediately
You will note that employers that attempt to disguise redundancies as disciplinary dismissals frequently lose in court.
Foreign employees enjoy the same labour protections as Thai nationals, including:
Work permit or visa status does not remove labour rights.
Working outside permitted job description
These mistakes often trigger combined labour, tax, and immigration investigations.
However, BOI companies are NOT exempt from labour law. They must fully comply with:
Common BOI errors include:
Violations often surface during:
Factories face the greatest legal exposure due to:
Factories using:
May still be jointly liable for:
This has become a major enforcement focus.
Factories using:
Face elevated exposure to:
Employer Type | Primary Risk | Required Action |
Factories | Migrant + overtime violations | Full workforce audit |
BOI Companies | Foreign SSF + severance | Legal payroll restructuring |
Expats | Improper termination | Independent contract review |
SMEs | Underpayment + SSF | Payroll automation |
Thailand has clearly shifted toward:
Labour compliance is no longer just an HR issue — it is now a core financial and criminal risk issue at board level.
Thailand’s labour law reforms dramatically increase the cost of:
For expats, BOI investors, and factory operators, failure in even one compliance category can trigger:
The information contained in our website is for general information purposes only and does not constitute legal advices. For further information, please contact us.