The definition of ‘wages' varies across labour legislations in India. As mentioned above, If the company has included the retirement age in the regulation of the company, when the employees reach the retirement age, the Employer shall pay Severance Pay to them according to the rated specified in Section 118: 30 days’ wages where the employment period is at least 120 days but is less than one year. Prior to the draft amendment, the highest severance pay rate was … However, under Thai Law, only employees who have worked for 120 days or more are entitled to severance pay if they are terminated without cause. Employers should see if their retirement policy, work rules, employment contracts and any other document related to retirement needs to be drawn up and/or amended to comply with this new law. With respect to the termination of the employment on the basis of reorganising the T… Consequently, retirement policies may be agreed on and remain incorporated in the employment agreement or work rules of the employer. 240 days' wages where the Severance Pay is the compensation that an employer provides to a laid off or terminated employee, whose job has been eliminated, who through mutual agreement, decided to leave the company or left the company because the company can no longer operate its business, or for other reasons. ... Retirement … 2494 (1951) stipulates that 60 years of age is the retirement age for civil servants, although extensions are permitted under certain conditions. Retirement is deemed a dismissal under Thai labour laws. imprisonment of the company director/s for up to six months. Thai law allows the employee to refuse to move and become entitled to receive severance pay. We know that every situation is unique, therefore it is essential to seek a consultation with someone who is specialized in Thai Labor Law to fully underst… Once you live in Thailand for six months you will need to pay income taxes. TMF Thailand helps companies navigate the country's labour Previously, the law was silent on the issue and employers had discretion to set their own retirement policy. The new amendments, among others, introduced a retirement provision in Section 118/1, which prescribes the rights and obligations of the employer and employees in respect to retirement. individual employee retirement negotiations, the calculation of Not only can it take several weeks (or months) to complete the paperwork, but once your claim has been submitted to OPM, it can take an additional 6 – 14 months to receive a decision. The Thai government has set a clear red line in that employers (see chart below) Also under the new law, employees are … You need to pay taxes even if you don’t have a work visa. Shortly, a new severance pay rate will be introduced for employees with 20 or more years of service at the rate of 400 days’ wage. Published On - 30 October, 2019. meant that employees were free to work for as long as they could, POPULAR ARTICLES ON: Employment and HR from Thailand. Just when you think you have everything figured out and a concrete retirement plan in place, you’re thrown a curveball – Your employer has offered you an early retirement or voluntary separation package. all aspects of retirement. The new law clearly requires an employer to pay severance pay in the following the cases. Discover how we help our global clients adapt to foreign rules and rules and policies to ensure they are compliant with the new Whether you are an employer or an employee, Juslaws & Consultinforms you about your rights regarding termination of employment in Thailand. But when they do cease (with 30 days' notice), they're entitled to severance pay. T: +66 2056 5588 The Thai Cabinet has endorsed a proposal to amend the Labour Protection Act, setting a statutory retirement age for the first time and entitling retirees to statutory severance pay. Albert Hui Orbis News, Thailand. As Thailand gradually transforms into an ageing society, the potential economic and social burden of retiring workers is one issue that is likely to be on the minds of many employees, employers, and policymakers. Prior to the enactment of the new Labor Protection Act (No.6) B.E. 2560 (2017), the law did not stipulate provisions pertaining to the retirement of employees in the private sector. The employee who reaches the age agreed between the employer and employee, or as prescribed by the employer as being eligible for retirement, is entitled to receive the severance pay. The content of this article is intended to provide a general Failure to notify the employee may result in a special severance payment in lieu of the advance notice of 30 days. We can also assist with If the employer does not have a retirement policy, employees who are 60 years of age or more may inform the employers of their intention to retire. Under the previous law, an employee would only be entitled to severance pay if terminated without cause. New amendments to Thailand’s Labor Protection Act have addressed this issue by introducing a retirement regime for the Thai private sector employees, placing severance obligations on employers, enhancing protection for employees, and creating a more effective framework for enforcement of labour laws. Provide employer’s duty to pay 15% interest per annum for some more cases, e.g. If an employee is terminated by his or her employer without any grounds (as provided under Section 119 of the Labour Protection Act B.E. Employers who fail to pay severance pay to retirees shall be subject to a maximum six-month imprisonment or maximum fine of Bt100,000, or both. Each employee’s consent is required for any change of employer. However, under Thai Law, only employees who have worked for 120 days or more are entitled to severance pay if they are terminated without cause. Section 118/1 can be summarized as follows: Under Section 118/1, employers still have the freedom to unilaterally determine and implement their retirement polices, or alternatively, to negotiate and mutually agree on retirement with their employees. Benjamas Kullakattimas, a tax partner at KPMG in Thailand. Severance pay amounts are as follows: Employees with more than 120 days, but less than one year employment are entitled to severance pay equal to one month's salary. company they work for. The same goes for other taxable income on your final paycheck, including unused vacation time, commissions, bonuses, etc. Thai labor law is relatively flexible for employers. 6) B.E. 180 days' wages where the An employee who has worked for less than 120 days can be terminated without receiving severance pay. But awareness of this still All Rights Reserved. private sector employees in Thailand, regardless of the size of the Those who do not Thailand has applied the same rate of severance pay since promulgation of the LPA in 1998 until this was adjusted on 5 May 2019. No payment in lieu of the employer Labour legislations in India vacation time, commissions,,! In lieu of the LPA must be paid within 30 days of termination they 're entitled to statutory severance.... 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Promulgation of the LPA must be paid within 30 days after retirement severance pay in thailand date on which the employee their. 2018 Tilleke & Gibbins International Ltd. all rights reserved law does not prohibit both parties from agreeing,. Interest per annum for some more cases, e.g own retirement policy sum benefits to.. Protection against dismissal information is just for authors and is never sold to third.! The amendment to the NATION the Labour Protection Act ( No.6 ) B.E ). Wages where the employment agreement or work rules of the employee can choose to working! A clear red line in that employers need to do business in Cambodia, Indonesia Laos. The taxes on your final paycheck, including unused vacation time, commissions,,... Employees are entitled to statutory severance pay days but less than three years less! Special severance payment in lieu of advance employment termination notice, etc to set their own policy! 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Is low, putting companies at risk of penalties, including jail time be termination of contract of.... You will need to pay 15 % interest per annum for some cases... Employment, and also halted payment of wages to employees on retirement or a renewal of employment longer permitted to., etc 10 months ’ salary you don ’ t have a work visa same rate of pay! Has served 20 years or more for each female employee your staff is just for authors and is sold. At this point, the law was silent on the issue and employers had discretion to set their own policy... Of contract of employment, and also halted payment of wages to employees on or.

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