Thailand: Employment Briefing - Watson Farley & Williams · Anecdotal evidence from the NEP...

New positive discrimination workplace regulations for disabled employees The Persons with Disabilities Empowerment Act restricts discrimination against disabled persons in the workplace. New regulations take a further step in favour of disabled workers by placing a positive obligation on employers to hire the disabled. A company with 1,000 employees will now need to hire 10 disabled employees, even if the company operates from multiple business locations with less than 100 employees each. As of 26 October 2011, the new regulations require employers to hire one disabled employee for every 100 employees.

The number of employees is determined as at 1 October each year. The disabled employees must be hired by 31 January the following year. After the first 100 employees, the hiring obligation is triggered by every part 100 employees greater than 50. (For example, an employer with 150 employees would be required to hire one disabled employee and an employer with 151 employees would be required to hire two disabled employees).

Employers who fail to hire the required number of disabled employees will be required to pay an amount to the Fund for Empowerment of Persons with Disabilities no later than 31 January, equal to the statutory minimum daily wage multiplied by 365 days for each disabled employee who was required to be hired but was not hired. Global companies with a policy of non discrimination against the disabled could receive negative publicity if their Thai operations have implemented alternative schemes available to employers who “do not wish to hire disabled employees”.

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Thailand: EmploymentBriefing December 2011

Contents Disabled employees 01Skill‑based minimum wages 03

Ministerial Regulation of the NEP dated 26 April 2011

02 03 THAILAND: EMPLOYMENT NOVEMBER 2011 THAILAND: EMPLOYMENT NOVEMBER 2011

The new regulations provide an alternative approach for employers “who do not wish to hire disabled employees”. These employers are permitted to establish schemes for the benefit of disabled persons instead of hiring disabled employees, however these schemes must be approved by the National Office for Empowerment of Persons with Disabilities (“NEP”) and must comply with regulations issued by the NEP. This alternative may be attractive to employers who feel that the nature of their business does not suit these changes, however as most employers have office or administrative departments which do not place substantial physical demands on employees, it would be reasonable to expect that roles will exist in most companies which can be adequately performed by disabled employees. Employers who wish to take the alternative approach should keep in mind that the NEP has the ability to publish details of compliance with the new regulations by individual companies, including the manner in which particular employers comply. Announcements issued by the Ministry of Social Development and Human Security set out six classifications of disability including physical disability, such as visual, auditory and mobility impairment, and non‑physical disability, such as intellectual impairment and learning disabilities. In practice, individuals with disabilities are issued with identity cards identifying the disabled status of the individual. The new regulations could result in demand for disabled workers outstripping supply in the short term, so employers wishing to hire the required number of disabled employees should act quickly to access a larger pool of candidates. Anecdotal evidence from the NEP suggests that employers in some parts of Thailand have enthusiastically hired disabled workers even before the introduction of the new regulations, recognising that the disabled can contribute just as much as other employees. Tax benefits in the form of enhanced income tax deductions are also available for employers who hire disabled employees. Normally 100% of the wages paid to employees is a deductible expense for corporate income tax purposes, however 200% of the wages paid to disabled employees is deductible, and if disabled employees make up 60% or more of an employer’s workforce, the amount of the deduction increases to 300%. The new regulations also apply to the public sector, although there are differences in the way employees are counted for public sector employers. Contact details of organisations which can assist in placing disabled employees are set out at the end of this briefing.

Skill‑based minimum wages New regulations which came into effect on 28 July and 6 October 2011 enable employees to undertake training courses which will entitle the employee to a higher level of minimum salary. Many Thai employers are familiar with the minimum salary scale which sets out the minimum daily salary payable to employees in the 76 provinces of Thailand. The minimum daily rate presently ranges from 159 Baht in Payao to 221 Baht in Phuket, although the minimum daily salary may be increased in 2012 to 309 Baht in Phuket and 301 Baht in six other provinces including Bangkok. The new regulations provide a direct monetary incentive to employees to increase their technical skills. The minimum daily salary scale applies to all employees, however employees with specific skills can be entitled to a higher daily salary, regardless of the province of their workplace. The following skill‑based minimum salaries apply from 6 October, 2011 onwards.

Employees passing the training set out in the above table will be entitled to the increased salary on production of a certificate stating that the employee has passed the applicable test. More than 2,000 people are expected to take skill development tests in the final quarter of 2011.

Professions Level (Baht)

Level 2 (Baht)

Level 3 (Baht)

1. Interior building electrician, industrial electrician, domestic and commercial air conditioning mechanic, micro‑computer technicians

300 400 500

2. Electronics technician(television) 300 400 ‑ 3. Automotive mechanic 275 360 445 4. Car engine technician 335 420 505 5. Car painting technician 315 380 445 6. Thai restaurant entrepreneur 280 360 ‑ 7. Thai masseuse 310 410 510 8. Holistic western style health spa (hand treatment)

350 460 ‑

9. Computer engineering mechanic 330 430 550 10. MAC welder 300 380 500 11. TIG welder 370 500 690 12. Construction carpenter 300 410 520 13. Brick layer 260 380 500 14. Plasterer 300 410 520 15. Aluminium construction technician 280 390 500 16. Seamstress 250 340 430 17. Jewellery maker 300 400 550 18. Wood furniture technician 300 350 400 19. Equipment personnel technician 250 315 380

Watson, Farley & Williams December 2011

Notification of Wages Commission on the Skill Standard and Testing Development on Workmanship Standard Wage Issues 1 (28 July 2011), and 2 (6 October 2011 ).

The new regulations provide an alternative approach for employers “who do not wish to hire disabled employees”. These employers are permitted to establish schemes for the benefit of disabled persons instead of hiring disabled employees, however these schemes must be approved by the National Office for Empowerment of Persons with Disabilities (“NEP”) and must comply with regulations issued by the NEP. This alternative may be attractive to employers who feel that the nature of their business does not suit these changes, however as most employers have office or administrative departments which do not place substantial physical demands on employees, it would be reasonable to expect that roles will exist in most companies which can be adequately performed by disabled employees. Employers who wish to take the alternative approach should keep in mind that the NEP has the ability to publish details of compliance with the new regulations by individual companies, including the manner in which particular employers comply. Announcements issued by the Ministry of Social Development and Human Security set out six classifications of disability including physical disability, such as visual, auditory and mobility impairment, and non‑physical disability, such as intellectual impairment and learning disabilities. In practice, individuals with disabilities are issued with identity cards identifying the disabled status of the individual. The new regulations could result in demand for disabled workers outstripping supply in the short term, so employers wishing to hire the required number of disabled employees should act quickly to access a larger pool of candidates. Anecdotal evidence from the NEP suggests that employers in some parts of Thailand have enthusiastically hired disabled workers even before the introduction of the new regulations, recognising that the disabled can contribute just as much as other employees. Tax benefits in the form of enhanced income tax deductions are also available for employers who hire disabled employees. Normally 100% of the wages paid to employees is a deductible expense for corporate income tax purposes, however 200% of the wages paid to disabled employees is deductible, and if disabled employees make up 60% or more of an employer’s workforce, the amount of the deduction increases to 300%. The new regulations also apply to the public sector, although there are differences in the way employees are counted for public sector employers. Contact details of organisations which can assist in placing disabled employees are set out at the end of this briefing.

Skill‑based minimum wages New regulations which came into effect on 28 July and 6 October 2011 enable employees to undertake training courses which will entitle the employee to a higher level of minimum salary. Many Thai employers are familiar with the minimum salary scale which sets out the minimum daily salary payable to employees in the 76 provinces of Thailand. The minimum daily rate presently ranges from 159 Baht in Payao to 221 Baht in Phuket, although the minimum daily salary may be increased in 2012 to 309 Baht in Phuket and 301 Baht in six other provinces including Bangkok. The new regulations provide a direct monetary incentive to employees to increase their technical skills. The minimum daily salary scale applies to all employees, however employees with specific skills can be entitled to a higher daily salary, regardless of the province of their workplace. The following skill‑based minimum salaries apply from 6 October, 2011 onwards.

Employees passing the training set out in the above table will be entitled to the increased salary on production of a certificate stating that the employee has passed the applicable test. More than 2,000 people are expected to take skill development tests in the final quarter of 2011.

Professions Level (Baht)

Level 2 (Baht)

Level 3 (Baht)

1. Interior building electrician, industrial electrician, domestic and commercial air conditioning mechanic, micro‑computer technicians

300 400 500

2. Electronics technician(television) 300 400 ‑ 3. Automotive mechanic 275 360 445 4. Car engine technician 335 420 505 5. Car painting technician 315 380 445 6. Thai restaurant entrepreneur 280 360 ‑ 7. Thai masseuse 310 410 510 8. Holistic western style health spa (hand treatment)

350 460 ‑

9. Computer engineering mechanic 330 430 550 10. MAC welder 300 380 500 11. TIG welder 370 500 690 12. Construction carpenter 300 410 520 13. Brick layer 260 380 500 14. Plasterer 300 410 520 15. Aluminium construction technician 280 390 500 16. Seamstress 250 340 430 17. Jewellery maker 300 400 550 18. Wood furniture technician 300 350 400 19. Equipment personnel technician 250 315 380

Notification of Wages Commission on the Skill Standard and Testing Development on Workmanship Standard Wage Issues 1 (28 July 2011), and 2 (6 October 2011 ).

Liability of Directors for non‑compliance. As recent amendments to the Labour Protection Act include authorised directors within the definition of “Employer”, directors can find themselves exposed to legal proceedings for underpayment of wages if the above salaries are not observed. An increasingly skilled workforce is ultimately of benefit to employers, however employers who fail to increase salaries in accordance with the new regulations risk more than just industrial action for recovery of underpaid of wages: penalties of up to six months’ imprisonment and fines of up to 100,000 Baht apply for underpayment. Contact details of organisations for recruitment: 1. Department of Employment Mitrmaitree Road, Din Daeng, Bangkok 10400 Tel: 02 247 9423, 02 248 4743 or call center 1694. Website: www.doe.go.th

2. Department of Skills Development Tel: 02 245 1707 Website: www.dsd.go.th/index.php

3. Thai Disabled Development Foundation No. 29 Chaiyapruek Bld., Visudhikasat Rd., Bangkhunprom, Pranakorn, Bangkok 10200 Tel: 02 281 9280 Fax: 02 281 9270 Website: www.tddf.or.th E ‑mail: [email protected]

4. Ministry of Social Development and Human Security 255 Rajvithi Road, Rajthevi Bangkok, Thailand 10400 Tel: 02 354 3388 Fax: 02 354 3899 Website: www.nep.go.th E ‑mail: [email protected]

Liability of Directors for non‑compliance. As recent amendments to the Labour Protection Act include authorised directors within the definition of “Employer”, directors can find themselves exposed to legal proceedings for underpayment of wages if the above salaries are not observed. An increasingly skilled workforce is ultimately of benefit to employers, however employers who fail to increase salaries in accordance with the new regulations risk more than just industrial action for recovery of underpaid of wages: penalties of up to six months’ imprisonment and fines of up to 100,000 Baht apply for underpayment. Contact details of organisations for recruitment: 1. Department of Employment Mitrmaitree Road, Din Daeng, Bangkok 10400 Tel: 02 247 9423, 02 248 4743 or call center 1694. Website: www.doe.go.th

2. Department of Skills Development Tel: 02 245 1707 Website: www.dsd.go.th/index.php

3. Thai Disabled Development Foundation No. 29 Chaiyapruek Bld., Visudhikasat Rd., Bangkhunprom, Pranakorn, Bangkok 10200 Tel: 02 281 9280 Fax: 02 281 9270 Website: www.tddf.or.th E ‑mail: [email protected]

4. Ministry of Social Development and Human Security 255 Rajvithi Road, Rajthevi Bangkok, Thailand 10400 Tel: 02 354 3388 Fax: 02 354 3899 Website: www.nep.go.th E ‑mail: [email protected]

05 THAILAND: EMPLOYMENT NOVEMBER 2011

Alan Polivnick Partner Bangkok [email protected] +66 02 665 7805

Krit Julapanichakum Lawyer Bangkok [email protected] +66 02 665 7841

Thailand Unit 902, 9th Floor, GPF Witthayu Tower B 93/1, Wireless Road Patumwan, Bangkok 10330 Tel: +66 2 665 7800 Fax: +66 2 665 7888

Christopher Osborne Lawyer Bangkok [email protected] +66 02 665 7837

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