Hiring guide in Thailand

What should I know about hiring in Thailand?

To successfully navigate the hiring process in Thailand, employers must have a comprehensive understanding of the country’s labour laws, including employment contracts, taxation frameworks, payroll procedures, and work permits.

Except for being compliant with local labour regulations, employers must also be aware of Thailand’s unique business norms and etiquette to establish productive remote teams and foster efficiency and success.

Why is Thailand a good choice for finding remote employees?

Employers who strive to expand their international teams can benefit from hiring employees from Thailand. 

First of all, Thailand is a country that offers very competitive labour costs compared to Western countries. This can be beneficial for both employers who want to save on labour expenses as well as those who want to offer more competitive salary packages without much additional costs.

Other than being a cost-effective country, Thailand’s work culture values respect and politeness, making Thai employees reliable and respectful. This translates into effective communication and collaboration, whether it’s with clients or internally within your remote team.

Lastly, Thailand’s regulatory environment is becoming more friendly to the remote work concept, and the country is taking more and more steps to facilitate remote work culture and digital nomadism. The Thai government has also been making efforts to attract foreign investments and promote the digital economy as the future of working in the country.

How can Native Teams help you hire in Thailand?

If you want to skip navigating complex labour laws and administrative systems, Native Teams has you covered. Through our Employer of Record solutions, including global payroll, tax optimisation, and HR administration, you can easily hire talent from Thailand without worrying about compliance.

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Hire your first Thai employee with Native Teams.

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Legal requirements for hiring in Thailand

Before hiring team members in Thailand, employers need to be familiar with the following legal requirements:

Legal framework

Types of employment contracts

Employment contracts in Thailand serve as the foundation for employer-employee relationships, defining the rights and obligations of both parties. Thai law recognises two basic types of employment contracts – fixed-term and open-ended contracts.

Fixed-term contracts are typically used for temporary and project-based work, including seasonal employment. These contracts specify the end date or the duration of the employment and terminate automatically at the end of the specified period. As such, they’re used by employers who need to manage their workforce levels according to project timelines and seasonal demands.

On the other hand, open-ended contracts are permanent, without a defined duration. As such, they offer greater job stability and security and can be terminated either by the employer or the employee, subject to legal requirements for notice and severance.

Content of an employment contract

As employment contracts define the most important terms and conditions of the employment relationship, they must include elements like the date of the contract, name of parties, expiry date, probationary period, duties and responsibilities of both parties, wage, benefits, working hours and days, and other key details. 

While both parties have the freedom to negotiate and agree upon the terms and conditions, they must adhere to the principles of fairness and equity. If any terms or conditions in the contract are found to be unfair or excessively advantageous to the employer, the court has the authority to modify them. 

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 Download a free employment contract for Thailand through Native Teams.

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Oral, written or electronic employment contracts

Employment contracts in Thailand can be either oral or written. For an agreement to be considered valid, it should clearly imply that the employee agrees to work for an employer who, in return, agrees to pay wages for the work period.

However, while verbal agreements are legally binding, written contracts are highly recommended to provide a clear record of the terms and conditions and reduce the risks of misunderstandings and disputes. If any disputes arise, a written contract serves as evidence, which is very important for court proceedings.

Probationary period

While the Thai labour laws don’t mandate specific regulations for the duration and conditions of probationary periods, there are a few general practices that apply.

Starting with duration, employers often establish probation periods of up to 119 days to ensure a mutual evaluation period before long-term commitments.

In addition to this, employees on a probationary period should receive the same benefits and protections as other employees. This includes payments for work done, including during periods of statutory leave, and protection against wrongful dismissal and adherence to work regulations.

Working hours

The standard workweek in Thailand is limited to 48 hours per week, eight hours per day, with specific exceptions for certain industries. Employers must also provide at least one day off per week to stay compliant with labour regulations.

Night work

In Thailand, work performed between 10 pm and 6 am is classified as night shift work. 

While the law allows for a total weekly working limit of 48 hours, night shifts might be shorter. The reduction in hours is meant to balance the overall work schedule so that employees do not exceed the 48-hour workweek limit.

Breaks and types of leaves

Employees in Thailand are entitled to at least one hour of rest after five consecutive hours of work, even though this break is not considered part of the working time. 

Types of leave include annual leave, sick leave, maternity leave, and necessary business leave. The intervals between days off must not exceed six days to ensure that the employees receive regular breaks from work. Also, employees who are on a fixed salary or monthly wage are entitled to full pay for their weekly day off, while employees paid daily or hourly may not be entitled to full pay.

Annual leave

Employees who have completed one uninterrupted year of service in Thailand are entitled to a minimum of six working days of annual leave per year. On the other hand, for employees who have not completed a full year of service, annual leave is calculated on a pro-rata basis. In other words, leave entitlement is calculated as a portion of the year the employee has worked to ensure fairness in leave allocation.

Public holidays

Public holidays in Thailand are a mix of national celebrations, cultural observances, and royal commemorations. These holidays offer employees time off work and are often observed nationwide. However, some holidays are based on lunar calendars and may vary in date each year. Some of Thailand’s most important public holidays are New Year’s Day, Makha Pija Dat, Labour Day, Coronation Day, Constitution Day, and New Year’s Eve.

Salary

Minimum wage adjustments in Thailand aim to address regional disparities and improve worker compensation.

The Labour Protection Act in Thailand doesn’t mandate specific regulations regarding the frequency or timing of salary payments, and employers and employees are free to agree on various payment schedules, such as hourly, weekly, monthly, or any other interval. However, the agreed-upon schedule should be clearly outlined in the employment contract to avoid any misunderstandings.

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To calculate the salary and taxes in Thailand, click here.

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Sick leave

Sick leave regulations in Thailand provide employees with the right to take leave based on their health condition. The Thai labour law doesn’t specify a fixed number of sick leave days, with entitlements to take sick leave as needed. 

However, if the employee takes sick leave for three or more consecutive days, the employer has the right to require a medical certificate. The certificate should be issued by a qualified physician or an official medical establishment to validate the employee’s illness.

Parental leave

Currently, labour laws in Thailand don’t provide statutory parental leave beyond maternity and paternity leave for government employees. However, employers are encouraged to develop their own policies to support new parents, including flexible working arrangements and additional leave options. 

Similarly, there are also no statutory requirements for adoption leave in Thailand, and employers who seek it must refer to their employer’s internal policies or any collective bargaining agreements.

Paternity and maternity leave

Female employees in Thailand are entitled to a maximum of 98 days of maternity leave for each pregnancy. The leave includes both the period before and after childbirth, with the option to choose when to start the maternity leave. The 98-day maternity leave also includes time off for prenatal medical visits to accommodate the necessary medical care during pregnancy.

Employers must pay female employees’ salaries during maternity leave for up to 45 days per year, with payments equivalent to the employee’s normal daily wage. Beyond the 45 paid days, female employees can take up to 53 additional days of leave, with the remaining eight days being subject to mutual agreement regarding the payment. 

When it comes to paternity leave, male employees in the government sector are entitled to a paid paternity leave of up to 15 consecutive working days. This leave can be taken either before the childbirth or within 90 days after the birth.

For the private sector, there are currently no statutory requirements for paternity leave, even though employers are highly encouraged to develop their own leave policies.

Methods of employment termination

Employment termination in Thailand should be fair and protect the rights of both employers and employees. Hence, it can occur under two primary scenarios – fixed-term employment and open-ended (or indefinite) employment. 

In the case of fixed-term employment, the contract is naturally terminated once the specified period ends. These contracts can not be extended beyond the two-year limit without losing their fixed-period status. 

When it comes to indefinite employment, either party can terminate the contract with a written notice. The notice must be submitted before or at the date the wage payment is due, so the termination takes effect on the following wage payment due date. 

If the termination is made by the employer, they must notify the employee before or on the date of the salary payment. If the dismissal is necessary immediately without a notice period, the employer must provide severance pay. On the other hand, if the employee wants to terminate the employment, they must provide a 30-day advance notice in writing. 

Finally, a mutual termination agreement can occur when both parties consent to end the employment relationship and should be formalised in written form that details the terms and conditions.

Ordinary dismissal by employer

Ordinary dismissal refers to the termination of an employee’s contract by the employer for reasons that don’t involve serious misconduct or just cause, as defined by law. Ordinary dismissals include provisioning 30-day written notice and severance pay unless the dismissal is for serious misconduct. 

If an employer dismisses an employee without a statutory cause, they can terminate the contract immediately but must provide severance pay. This applies to employees who have completed their probationary period, which means they have been employed for more than 120 days. 

If the termination occurs during the probationary period, the employer must notify the employee before the end of this period.

Notice period and challenging the dismissal

Notice periods for terminating employment in Thailand are regulated by the Labour Protection Act and other relevant labour laws. Employers must provide at least one pay period’s notice before terminating an employee, which typically is one month’s notice if the wage is paid monthly. The notice period can’t exceed three months unless the employment contract specifies a notice period longer than three months. 

Wrongful dismissal can occur when the employer terminates or lays off an employee in a way that breaches the employee’s rights. Employees who believe they have been wrongfully dismissed can file a claim with the Labour Court.

Rights and obligations of unemployed individuals

Unemployment benefits in Thailand can vary depending on the reason for ending the employment. The benefits are categorised based on whether the unemployment is due to termination, resignation, or natural disasters.

Unemployment due to termination includes layoffs, company downsizing, and other forms of dismissal not caused by the employee’s actions. The benefit amount is 50% of the employee’s previous wage with a duration of up to 180 days.

If the unemployment is due to the expiration of a fixed-term contract or voluntary resignation by the employee, the benefit amount is 30% of the previous wage with a duration of up to 90 days. 

Finally, unemployment benefits are also available in cases where employment is interrupted due to natural disasters like fires, earthquakes, or storms, which make it impossible for the employee to work. The benefit amount is 50% of the employee’s previous wage with a duration of up to 180 days.

Severance pay

Severance pay in Thailand is a statutory entitlement for employees who are terminated without a valid cause. This payment should provide financial support to employees during their transition period after employment termination.

The calculation of severance pay is based on the length of service with the employer, with 30 days’ wages for service of 120 days to less than a year up to 400 days’ wages for more than 20 years of service. 

Severance pay is legally due on the termination date. If the employer fails to make this payment on time, they must pay interest on the overdue amount at a rate of 15% per year until the payment is completely finalised.

Intellectual property rights

The ownership of IP rights, such as invention patents, product design patents, trademarks, and copyrights, depends on factors such as the nature of work and existing agreements between the employer and the employee. Hence, it’s crucial for both parties to clearly define IP rights in their employment contracts, outlining the ownership of IP created during employment, transfer of rights or licences, etc.

Employers and employees should maintain records of IP creation and agreements to support their claims to ownership and enforce their rights effectively. 

Employee data privacy

The Personal Data Protection Act of Thailand sets the framework for the protection of personal data, including employee data. This act is designed following global standards and applies to any organisation that collects and handles personal data. 

Employers in Thailand are permitted to collect employees’ personal data only to the extent necessary for business purposes. The data collected should be strictly relevant and not excessive regarding the purpose for which it’s gathered. 

In addition to this, employers must implement appropriate measures to prevent personal data from being disclosed, lost, or altered.

Prohibition of competition

A non-competition clause, also known as a restrictive covenant, is a contractual provision that prevents employees from engaging in competitive activities both during and after their employment period. 

In essence, employees are restricted from performing any work outside the scope of their agreed duties or working for another entity without the employer’s prior consent. These clauses’ purpose is to prevent conflicts of interest and ensure that the employee’s efforts and focus remain dedicated to the employer’s business. 

If an employee breaches non-competition clauses, the employer is entitled to terminate the employment relationship, as it is considered a violation of the employment agreement.

Remote working policy

Thailand’s approach to remote work has evolved, particularly with the amendments to the Labour Protection Act that came into effect on April 18, 2023.

While the LPA no longer mandates in-office work, it allows employers and employees to mutually agree to remote work arrangements. These arrangements should be documented in writing, either electronically or physically. Remote workers have the same rights and benefits as on-site employees, including minimum wage, social security contributions, and paid leave.

Furthermore, the LPA establishes Thailand’s first “right to disconnect” policy, allowing remote workers to refuse communication from employers outside of working hours unless prior consent is provided.

Responsibilities within a remote work arrangement

Employers in Thailand are responsible for conducting risk assessments for home work environments, providing necessary equipment, and ensuring clear communication and support for remote employers. On the other hand, employees must follow safe work practices, properly use the provided equipment, and promptly report health and safety concerns. 

The Labour Protection Act doesn’t explicitly require employers to provide equipment for remote work. However, employers should clarify their policy on equipment provisions and any reimbursement for work-related expenses. 

Employers must also establish clear performance goals and metrics for remote workers to ensure productivity and maintain a sense of accountability.

Health and safety at home

Employers in Thailand are obligated to ensure the health and safety of their employees, including those who work remotely. This means implementing a comprehensive safety management system, conducting hazard assessments, implementing control measures, and continually monitoring workplace safety. 

Employees, on the other hand, are expected to follow the established safety procedures, use personal protective equipment as instructed, and report any hazards or unsafe practices.

What are the advantages of hiring employees from Thailand vs other countries?

Hiring remote employees from Thailand can be beneficial for a couple of reasons when compared to other countries. 

Firstly, Thailand has a skilled and educated workforce in trending sectors like technology and services, making it an attractive option for diverse industries. In addition to this, the cost of labour in Thailand is relatively lower than in many Western or Asian countries, which is a cost-effective solution for businesses that don’t want to compromise on quality. 

Finally, Thailand’s strong work ethic and cultural emphasis on teamwork can contribute to a collaborative and productive work environment, even when building a global remote team.