Today, one of our payroll clients asked us about the intercompany transfer of employees in Thailand. They have group of companies and would like to transfer of their staff from company Y to company Z. The compensation package is the same but can he/she carry forward the working year to the company Z?

To answer this question, it can be carried forward if the employee agrees to move to company Z. Then company Z must take over all the rights and responsibilities related to the employee. A new employment contract can be made as proof referring to the old contact that was transferred.

However, the employee also has the right to decide whether to accept to move to company Z continuously or not. If he/she does not agree, company Y must pay compensation to the employee. The employee can then choose to move with company Z and start new employment period or find another company to work for.

This is in accordance with Section 13 of the Labour Protection Act B.E. 2541, whereas if there is a change of employer or in case that the employer has registered, changed, transferred or merged with another company and it causes any employee to become an employee of a new employer, therefore, the employer shall get consent of the employee who will be transferred. The new employer shall take over all the rights and responsibilities owed to the transferred employee by the previous employer.

Moreover, under Section 577 of Thailand Civil and Commercial Code, the employer may transfer the right to a third party with the consent of the employee. The employee may have a third person render the services in his place with the consent of the employer. If either party does not agree, the other party may terminate the contract.

At MSNA Group, we provide services such as accounting, tax, payroll and financial services. Contact us now for your business needs.

The Thai Social Security Fund is the government-administered fund by the Social Security Office which provides social security coverage to the insured persons with source of fund coming from employers, employees and the government. The SSF covers only non-work-related contingencies with benefits covering medical care, sickness, maternity, invalidity, death, old age, child allowance and unemployment.

Hence, when a company in Thailand starts hiring 1 or more employees, it has to register the employees in the system and submit the social security fund to the Social Security Office within 30 days from the first day of employment. The employer or an authorized person can submit the Registration Forms as follows:

• The Employer/Company Registration Form (SSO 1-01)
• The Employee/Insured Person Registration Form (SSO 1-03)

For the case of Burmese employees, they must obtain the work permit first before the company can register them in the system. However, if a Burmese has been employed by the company as a director or in case he/she holds a different job position but at the same time, he/she is a shareholder of the company, he/she is not required to be in the Social Security Fund system because he/she is considered as an owner of the company.

The company should also note that when an employee resigns or has had his/her employment contract terminated, the company must notify the SSO that the said employee is no longer employed within 15 days of the following month. The form to submit is the Notification Form for the Cessation of Being an Insured Person (SSO 6-09)

Moreover, when an employee changes his/her given name or family name or any other information pertaining to his/her family status, or the number of children of the said employee’s family, the company must notify the SSO these changes within 15 days of the following month using the form for making notifying of Changes of Employee Information (SSO 6-10).

Thai Lawyers can help register the Myanmar companies and its employees into the Social Security Fund system. We also process work permit & visa applications for Burmese employees before we register them with SSO. Contact us now for more information and expert advice.

One of our Myanmar clients has asked us if they are required to register their work rules with the Department of Labor Protection and Welfare, the Ministry of Labour. Currently, they have 10 employees. Here is our response as an employer’s perspective.

In accordance with the Thai Labour Law, if the company has hired ten employees or more, it is required to have work rules in the Thai language. There is no need to register the work rules with the Ministry of Labour but the work rules must be displayed in the company’s office and must contain at least particulars on the following:

• Working days
• Normal working time
• Rest periods
• Holidays
• Rules of taking holidays
• Rules governing overtime and holiday work
• The date and place of payment of wages
• Overtime pay
• Holiday pay
• Holiday overtime pay
• Leave and rules of taking leave
• Discipline and disciplinary measures
• Lodging of grievances
• Termination of employment
• Severance pay and special severance pay

As an employer, you must announce the work rules within fifteen days from the date the employer employs ten or more employees. You should always keep a copy of the work rules at the office, hand out and post the work rules in a noticeable spot in the workplace easily available for employees to know and read.

In case you have to amend or revise the work rules, you must announce that amended work rules within seven days from the date that the amended work rules has been implemented.

Thai Lawyers can assist employers in drafting work rules for employees as well as reviewing their employment contracts to make sure it is in line with the Thai Labour Law. Contact us now for initial consultation.

Employees who are registered in Thailand Social Security system are entitled to the following compensation when they become unemployed:

1. In case of voluntary resignation, or end of the employment agreement, the insured person will receive a compensation of 30% of wages for 90 days calculated from the monthly salary of not more than THB 15,000.
2. In case of being laid-off, the insured person will receive 50% of wages for 180 days calculated from the monthly salary of not more than THB 15,000.
3. In case of termination due to force majeure (natural disaster), the employees will receive a compensation of 50% of wages for a maximum of 180 days.

Foreigners are entitled to the same benefits as Thai nationals. However, unemployment benefits will be given if the employees meet these conditions:

• Social security contributions must be made for at least 6 months within the 15-month period before the unemployment.
• Termination must not be due to an actual offense
• The applicant must register for unemployment benefits at the Social Security Area Office within 30 days from the unemployment date

The Social Security Office will pay the compensation benefit on monthly basis by crediting to the Thai bank account as stated by the insured person in his/her application for unemployment benefits.

Contact MSNA Group for consultation on Thai labor law or for your visa and work permit.

There are certain occupations that are prohibited to non-Thai nationals as prescribed by the Ministry of Labour. If you are a professional lawyer in your home country and would like to practice your profession in Thailand, you should be aware that foreigners are prohibited to work and provide services in legal counselling, litigation and others such as representing as a lawyer in all types of cases, acting on behalf of clients in legal matters, drafting contracts or making legal documents.

However, there are some exceptions depending on the situation. Foreign lawyers can be allowed for the following works:

1. To perform duties of an arbitrator in an arbitration case;
2. To provide assistance or representation in the arbitral proceedings in the event that the law applicable to the dispute being considered by the judge is not Thai law. This includes the following:
3. Liaison for cases, research, compile and provide opinion on facts and legal issues to the arbitral tribunal or the parties;
4. Notetaking during the hearing using shorthand or other techniques in the same manner;
5. Presentation of opinions as an expert
6. Works involving special technology used in recording sound, images and evidence produced in the hearing

Know more about your options when applying for a ThailandWorkPermit. Contact us for expert advice of English-speaking Thai Lawyers.

As part of Covid-19 subsidy scheme to small and medium enterprises, the Thai government is giving three-month subsidies to SMEs registered in the Social Security system. Such SMEs are the companies with not more than Baht 5 million capital and their gross income has never reached more than Baht 30 million in any accounting year. The subsidy will be at a rate of THB 3,000 per employee per month for 3 months from November 2021 to January 2022.

In order to qualify for this subsidy, SMEs must register to join the scheme from now until November 20, 2021. However, if the company has not registered with SSO e-Service yet, they have to be registered in the system first before they can register to join the scheme. SSO e-Service is the online system of the Social Security Office whereas the company can also add new Thai employees when they join the company or remove their names once they resigned.

Know more about this subsidy and check out if your company can apply for this scheme.  MSNA Group has vast knowledge and experience in Thai accounting, tax and payroll matters. Contact us now for consultation.

During this pandemic, our clients asked questions about sick leave for COVID 19 cases. How many days can employees take off if they are sick? Normally the Thai labor law allows employees to take up to 30 days of sick leave per year. What can they do if they are sick more than 30 days a year? Here is the question from one of our clients:

Question: Is there any government regulation to give more sick leave if an employee is contracted with Covid-19? For example, if an employee is found to be COVID positive and if the person does not have any sick leave balance, can he use the annual leave to cover and can the company deduct no pay leave if they have used up all their sick leave?

Answer: The company cannot make him use his annual leave for his COVID sick leave after he has used all his yearly allowable 30 days of sick leave. You may deduct his salary based on the number of sick leave days in excess of 30.

In this COVID era, the employee may file a form with the Social Security Office for a compensation for his loss of income. The company will have to issue a letter confirming he has used up his 30 days of sick leave allowed by law attached with his sick leave request form.

Contact MSNA Group for your questions regarding Thai Labor Law.

One of MSNA’s payroll outsourcing clients asked us about the bonus scheme to be given to employees in Thailand.

Question: Our Thai company is currently still operating at a loss. We are studying into a variable bonus scheme to be given to the employees in Thailand and would like to seek your opinion on this matter.  Do you know of any company in our industry or any M&E construction company which pays variable bonuses? If so, what is the average bonus quantum in terms of months? I guess the bonus should be peg to the company profits.

Answer: Regarding bonus scheme, it depends on many factors. For example, companies with western culture usually have a different bonus scheme from the companies with the Thai culture. In many cases, if the monthly salaries are already high, then the number of months for bonus is often lower than if the salaries are low. When you want your company to be an attractive employer, you can pay an attractive salary plus 13th month bonus or you can pay normal salaries plus many months of bonus. Also it depends on the quality of employees. The ones that are very good and can demand higher compensation will stay if the overall remuneration is better than other companies. The ones that are not in high demand will stay even though you do not pay them bonuses. We would suggest having different agreements on the numbers of months for bonus with different employees depending on the levels of performance and the difficulties of finding replacements.

However, if you peg the bonus on company’s profits, it is a non-tax deductible expense. That means all the bonus you pay that is dependent upon the company’s profits will get added back to the bottom line and treated as if it was never an expense of the company for the purpose of calculation of corporate income tax.

Consult MSNA for your questions regarding your doing business in Thailand.

This article is about tax on earnings which an employee received from the employer concerning the agreement of compromise. When the employee whose working period is not less than 120 days is terminated, the employer has to pay the employee the compensation according to the Thai Labor Law. The amount of the compensation depends on how long the employee has been working with the employer. This compensation is not subject to tax.

In the case that there is a dispute on unlawful termination in the labour court, if there is a monetary offer from the employer to settle the case and the employee accepts it, both parties can agree in front of the judge. The amount received according to the agreement of compromise before the judge is subject to tax because it is not considered a compensation stipulated in Labour Protection Act. It is considered an income under Section 40(1) of the Revenue Code, which shall be treated the same way as a monthly salary. Therefore, the employer has to deduct withholding tax at the progressive rate from the amount of settlement.

For questions regarding Thailand labour law, please contact our legal team at ThaiLawyers.com

Under the Royal decree no. 575, the personal income tax rates for 2013 and 2014 income have been reduced. The new personal income tax rates are as follows:

Contact English speaking accountants of MSNA for your tax questions and for the preparation and submission of your Thailand personal income tax.