Amendments to the Labor Protection Act came into force on May 5, 2019. It should be noted that the new rules make life more difficult for employers, while employees gain more rights and protections.
1. Penalties for Late Payments to Employees
Penalties apply for delays in payment of:
- security deposits
- wages and overtime pay
- severance pay
- special severance pay (in case of termination without prior notice)
- compensation during business suspension
- and other payments
The employer must pay a penalty of 15% per year on the outstanding amount for the entire period of delay.
2. Change of Employer / Business Transfer
In cases of:
- change of employer
- business transfer
- merger
where the employee continues working under a new employer:
- prior consent of the employee is required
- the new employer must assume all existing rights and obligations of the previous employer toward the employee
3. Immediate Termination Without Notice
If the employer terminates the employment without prior notice:
- the employer must pay compensation equal to the wages the employee would have received during the notice period
- all wages must be paid on the day of termination
4. Business Leave
Employees are entitled to:
- 3 working days of paid business leave per year
(Note: the exact definition of “business leave” has not yet been clarified.)
5. Maternity Leave
- Total maternity leave: up to 98 days (previously 90)
- Paid leave: up to 45 days
- This period includes childcare leave
6. Maximum Severance Pay
A new maximum severance rate is established:
- up to 400 days of wages (based on the last salary rate)
- applicable if the employee has worked 20 consecutive years or more
Previously:
- maximum was 300 days of wages for employees with more than 10 years of service
7. Change of Workplace Location
- If the employer changes the workplace in a way that significantly affects employees’ living conditions:
- the employer must give at least 30 days’ notice
- and post a notice in a visible place
- If no notice is provided:
- the employer must pay special severance equal to 30 days’ wages to employees who refuse to relocate
- If an employee refuses relocation due to significant impact:
- they must notify the employer within 30 days of the announcement
- the employment contract will be terminated on the relocation date
- the employee is entitled to severance pay based on length of service
Applicability
This law applies to:
- Thai nationals
- foreign employees
Recommendation
Regardless of nationality or business activity, it is strongly recommended to:
- formalize employer–employee relations
- sign a written employment contract
While a contract cannot limit employee rights established by law, it can:
- define rights and obligations of both parties
- establish procedures for handling work-related matters
For questions regarding employment contracts, please contact: +66 65 665 1970.
Author: Alexandra Agapitova.
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