Thailand has raised its minimum wage from Baht 220 to Baht 300 since April 1, 2012. Such a move was aimed at increasing the spending power and to offset the high costs of living in the country. Since the effective date, all workers in Thailand will receive at least Baht 300 or approximately US$9.80 per day which is about 40% increase in certain industry sectors and regions. The new minimum wage has brought Thailand’s monthly wage closer to Malaysia, China and India and triple the amount paid to Vietnamese and Cambodian workers. Multinational companies with operations in Thailand have consulted with Thailand lawyers on how such wage hike affects their workers on minimum wage rate and over minimum wage rate.
Initially, seven Thai provinces implemented the wage hike, namely: Bangkok, Nonthaburi, Samut Prakan, Samut Sakhon, Nakhon Pathom, Pathum Thani and Phuket. To date the following minimum wage rate is implemented as per the Wage Council’s Minimum Wage Rate No. 6 as approved by the Cabinet:
Lawyers in Phuket are of the opinion that the increase in minimum wage in Phuket would cause more workers from other regions to look for jobs in the province and it would provide a solution to the current shortage of labor in the job market.
Thailand’s prime minister noted that big manufacturing companies and international companies were already paying their workers more than the mandated new minimum wage rate while small and medium companies that are mostly affected by the policy will be assisted by the government through some measures in support of their adherence to the new wage rate. Corporate lawyers in Phuket have advised many companies they provide services to, on complying with the new labor regulation in order to avoid any conflict with the government and the law especially with the stern warning announced by the chief of Phuket Provincial Labor Protection and Welfare Office on any business found violating the new minimum wage rate.
The chief issued warnings to specific employers who were found to be paying their workers less than the Baht 300 minimum daily wage and gave them 30 days to take corrective actions and start paying workers the new minimum wage. A police complaint will be filed against violators and if found guilty, the employers would face a fine of up to Baht 100,000 or a sentence of up to 6 months jail time, or both.