Hiring staff in Thailand is not that simple. It is a different country with different laws and customs that you need to be aware of. Naturally, there are lots of questions. You may be wondering if you can use a HR payroll system or if there are laws that need to be prioritized.
Worry not because we got you covered. We’d enlist the ten most important things that you need to know if you’d be hiring staff in Thailand. Knowing each will ensure that you encounter a smooth and flawless hiring process. These are 10 things you need to know when hiring staff in Thailand.
1. Contract Employment
You need to know that employment contracts in Thailand can either be written or verbal. An employment contract can also be one that is for a fixed term or one that is for a permanent term. For things to be clear and ever reliable, it is best if you’d draft a written contract for every single hire. This will ensure that no confusion takes place. The employment contract that you will provide should contain the following details:
a. Compensation
b. Position
c. Termination requirements
d. Benefits
You should remember that Thai labor law recommends for probationary periods to be no more than 119 days. You can easily part ways with your hire if you find that he or she is not suitable for the work during this period.
2. Taxes
You need to dedicate serious time and effort in dealing with your employees’ taxes. You and your employee will be required to contribute around 5% of your employees’ salary to the Thai government. Know the following:
Minimum contribution: 83 baht per month
Maximum contribution: 750 baht per month
Apart from this, you will also have to pay a corporate tax. This usually amounts to 20% of your employee’s salary.
3. Payroll
You need to be precise in the computation of payroll. You also need to be aware that Thailand has a national security fund. This national security fund will require you and your employee to contribute on a monthly basis. This fund is used to assist employees in child care, medical care, disability, childbirth, and loss of wage due to unemployment.
4. Wages
In Thailand, the minimum wage varies by province. This is why you need to ensure that you’re following the mandatory minimum wage by basing it on the place of your business. Per 2020, the country’s average minimum wage is around 10-10.80 USD.
5. Working Hours
Working hours vary and will greatly depend on the nature of your business. However, you need to take note that you are not allowed to deploy working hours that exceed 48 hours per week. You should ensure that you follow these labor standards:
- an employee should have at least one day off every week
- an employee should not for more than six days straight
- overtime cannot exceed 36 hours per week
- working overtime on a weekday will require more pay at a rate of 150% of their base salary
- working overtime on weekends will require that you give an employee a salary that is 3x their base salary
6. Time Off
You will be required by law to give a minimum of six vacation days to your employee on a yearly basis. This is not widely practiced though as most Thai companies give 10-15 days of paid vacation to their employees. Such paid leaves may be carried into the next year if not used. Your employees will also be entitled to the following leaves:
- National service leave – for male employees who join military exercises
- Exam or training leave – for employees that take training courses
- Family planning leave – for employees that undergo medical sterilization procedures
7. Anti-discrimination Law
In Thailand, it is illegal to discriminate on the basis of the following:
- Religion
- Race
- Age
- Nationality
- Sexual orientation
- Sex
- Disability
- Marital status
- Political opinion
- Union membership
8. Incentives for hiring Thai workers
You need to know that you’re required by Thai law to hire at least four Thai nationals for every international employee. You should also ensure that all hired international workers have permission and a license from Thailand’s Department of Employment. You must also provide a guarantee that you will be answering for all the costs and damages that may take place that are associated with your hiring of an international employee.
9. Costs
You may end up spending more during the hiring process. This will depend on the positions you are opening, your recruitment strategies, and your current policies on supplemental benefits and bonuses. The following are the direct and indirect hiring costs that you should be aware of:
- time spent choosing new hires
- expenses from attending recruitment fairs
- expenses for job advertisements
- taxes
- payroll
- benefits
- salaries
- insurance
- bonuses
10. Hiring Practices
You should observe the following practices when hiring in Thailand:
- Always use the local currency in all critical documents and contracts. For all monetary figures, you should endeavor to use the Thai baht.
- Use the local language when you can. This will make your local hires more comfortable and at ease.
- Take advantage of popular employment websites. Check out the following: LinkedIn, jobtopgun, jobthai, and jobsDB.
