0

90 days' wages where the © 2018 Tilleke & Gibbins International Ltd. All rights reserved. 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. 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. © Mondaq® Ltd 1994 - 2020. Whereas the Employer terminates the employment of an Employee under Section 121 and such Employee has worked for uninterrupted period of more than six years, the Employer shall pay Special Severance Pay in addition to Severance Pay under Section 118 of not less than the Employee’s last rate of Wages for fifteen days for each year of employment or of not less than the Employee’s Wages for the last fifteen … Severance pay; Less than 120 days: No severance pay: 120 days - 1 year: Wages for at least 30 days: 1 year - 3 years: Wages for at least 90 days: 3 years – 6 years: Wages for at least 180 days: 6 years – 10 years: Wages for at least 240 days: 10 years – 20 years: Wages for at least 300 days: More than 20 years: Wages for at least 400 days Hours Of Work This The content of this article is intended to provide a general All Rights Reserved. 180 days' wages where the The Labor Protection Act of 1998, Section 118, (LPA) requires all employers in Thailand to pay severance to employees who are “terminated” by the employer without legal cause (as described in LPA Section 119). previous law mean that the retirement age of any employee in the 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. 60 they'd like to continue working. For example, the Government Pension Act B.E. 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. Severance Pay and FERS Disability Retirement If you are currently in the process of applying for FDR, then you are probably aware of the time frames involved. regulations and other business requirements through our HR and How to Evaluate a Voluntary Separation Package or Early Retirement Offer. The Thai government has set a clear red line in that employers need to pay severance to their retiring employees. Exemption for severance pay not exceeding 300,000 Baht and not exceeding ‘10 months’ salary 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. The definition of ‘wages' varies across labour legislations in India. As a result, the retiring employees were entitled to statutory severance pay. By using our website you agree to our use of cookies as set out in our Privacy Policy. Prior to the enactment of the new Labor Protection Act (No.6) B.E. T: +66 2056 5588 no payment in lieu of advance employment termination notice, etc. 30 days' wages where the The benefits are highly valued by employees and the benefit terms are approximately one month of final pay for every year of service - … Thai labor law is relatively flexible for employers. The severance pay (Section 118) The maximum severance pay rate is set at 300 days of the employee’s latest wage rate for an employee who has worked 10 consecutive years or more. As employment regulation can be fast-changing and is specific to Provide employer’s duty to pay 15% interest per annum for some more cases, e.g. 240 days' wages where the Employers with offices in Thailand should review their workplace employment period is at least three years but less than six The NLA voted 179 in favour with five abstentions to pass the bill to increase the severance pay from 300 days to 400 days for workers serving … 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. Legally, employers in Thailand must pay a severance to their 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. 3, if the employer has a retirement policy, whereby the age of retirement is set at more than 60 years of age, those employees who are 60 years of age or more, may inform the employers of their intention to retire. 2541 (A.D. 1998)), he or she is entitled to severance pay under Section 118. Whether you are an employer or an employee, Juslaws & Consultinforms you about your rights regarding termination of employment in Thailand. Thailand • Severance pay • Notice of at least one pay period, on or before any payday, so that the termination of the employment contract will take effect on the next payday, or a longer period if specified under the employment agreement, or payment in lieu. Severance Pay - Severance pay will be paid upon retirement, at the employee’s daily rate of pay, in the amount of … Section 118/1 of the new Labor Protection Act (No. New Rate of Severance Pay; An employee who has been terminated without cause will be entitled to, among others, severance pay; the rate of which depends on an employee’s length of service and last wage rate. With respect to the termination of the employment on the basis of reorganising the T… Exemption for severance pay not exceeding 300,000 Baht and not exceeding ‘10 months’ salary . ... Retirement … 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. In addition to codifying the court judgments, the new amendments to the retirement regime provide substantial benefits for employees in terms of the right to retirement, and the right to severance pay upon retirement. Severance pay in Thailand. Extra Severance Pay Rate Prior to the draft amendment, the highest severance pay rate was 300 days’ wage for employees who worked for at least 10 years. 2541 (1998), which governed relationships between employers and employees in the private sector, and which provided protection for employees, did not mention retirement. Even if you can file the taxes on your own, everything is in Thai. Published On - 30 October, 2019. THAILAND – Retirement regime for Thai private sector. In contrast, the previous Labour Protection Act B.E. Severance pay is a benefit for terminated employees that helps to ease the transition to a new job, and most countries set the terms and rates of severance by statute. POPULAR ARTICLES ON: Employment and HR from Thailand. 6.4 Are there any categories of employees who enjoy special protection against dismissal? Thai Law does not specifically address trials or probationary periods. 15% interest . Contact us today. Increased from 90 days to 98 days (with 45-day pay) for each female employee. Working for life could be beneficial for some employees, but conversely, this arrangement would be disadvantageous for those employees who wished to end their employment at a certain age. 6), B.E. Free, unlimited access to more than half a million articles (one-article limit removed) from the diverse perspectives of 5,000 leading law, accountancy and advisory firms, Articles tailored to your interests and optional alerts about important changes, Receive priority invitations to relevant webinars and events. TMF Thailand helps companies navigate the country's labour employment period is at least one year but less than three Your best bet is to work with a tax accountant to file your taxes. An employee who has worked for less than 120 days can be terminated without receiving severance pay. New Retirement Regime for Private Sector Employees. Retirement is deemed a dismissal under Thai labour laws. The amendment to the Labour Protection Act does not stipulate The Thai government has set a clear red line in that employers need to pay severance to their retiring employees. The new Labor Protection Act (No. Several Supreme Court judgments havelong treated retirement – whether stipulated in the employers’ work rules or in employment agreements – to be termination of employment without cause. years. But when they do cease (with 30 days' Specialist advice should be sought All Rights Reserved. each country in which you operate, partnering with local HR and We need this to enable us to match you with other users from the same organisation, it is also part of the information that we share to our content providers ("Contributors") who contribute Content for free for your use. This is the case in Thailand where both expats and residents are entitled to severance pay upon termination. In cases where the retirement age has not been stipulated, or it has been stipulated so that it exceeds 60 years of age, the employee, who is 60 years old, may express their intention to retire to the employer. to continue working. Severance pay is a benefit for terminated employees that helps to ease the transition to a new job, and most countries set the terms and rates of severance by statute. Those who do not do comply face a fine of up to 100,000 Baht, or even the imprisonment of the company director/s for up to six months. payroll, bookkeeping and corporate secretarial services. The following retirement severance pay rates now apply to all For severance pay under the LSA, severance pay will be equal to one month of average wages for each year of service for an employee who has been continuously employed by the same entity. The intention of the employee to retire will become effective 30 days after the date on which the employee informs their employer. Hours Of Work retirement age for private sector employees in the country. no longer the case. penalties, including jail time. Taxes in Thailand. 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. Albert Hui Orbis News, Thailand. 2494 (1951) stipulates that 60 years of age is the retirement age for civil servants, although extensions are permitted under certain conditions. New Rate of Severance Pay; An employee who has been terminated without cause will be entitled to, among others, severance pay; the rate of which depends on an employee’s length of service and last wage rate. or until they voluntarily resigned. 2. 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. Previously, the law was silent on the issue and employers had discretion to set their own retirement policy. 2541 (A.D. 1998)), he or she is entitled to severance pay under Section 118. 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. Thailand has applied the same rate of severance pay since promulgation of the LPA in 1998 until this was adjusted on 5 May 2019. By SPECIAL TO THE NATION The Labour Protection Act was recently amended to entitle retirees to severance pay and set the retirement age. You’ll only need to do it once, and readership information is just for authors and is never sold to third parties. You have spent decades planning for retirement. Significantly, employees are no longer faced with the possibility that they may need to work for life without the right to severance pay, as under the new amendments, they are entitled to conclude their professional lives, with the comfort of knowing that they have the right to severance pay simply by exercising their right to retire under the employers’ retirement policies, and in accordance with the law. meant that employees were free to work for as long as they could, THAILAND – Retirement regime for Thai private sector. 6) B.E. Under the Thai Labor Protection Act of 1998, companies are required to pay legal severance payments (‘LSP’) to employees who leave employment at their retirement age, … Employees cannot waive their rights to severance or retirement pay. This includes all domestic and international income. Under the circumstance of normal termination of employment where “termination of employment” means: The company prevents an employee from continuing to work and receive his basic pay thereof, whether due to the termination of an employment contract … 300 days' wages where the Published On - 30 October, 2019. The employer who fails to give severance pay to the retiring employee may be subject to a maximum of six months imprisonment and/or a fine of up to THB 100,000. 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. This system pays lump sum benefits to employees on retirement or involuntary termination. An employee who has worked for less than 120 days can be terminated without receiving severance pay. Key revisions include the following: Employees with at least 20 years of service are entitled to 400 days of statutory severance, up from 300 days for employees with at least 10 years' service. Benjamas Kullakattimas, a tax partner at KPMG in Thailand. Employers can still negotiate with their Prior to the draft amendment, the highest severance pay rate was 300 days’ wage for employees who worked for at least 10 years. 2560 (2017) was published in the Government Gazette on August 31, 2017, and came into effect on September 1, 2017, amending the previous Act. - Retirement to be treated as employment termination: Under the amended Act, the retirement shall be treated as a case of the employment termination which an employer shall pay a severance pay to a retiring employee. Thai law allows the employee to refuse to move and become entitled to receive severance pay. individual employee retirement negotiations, the calculation of years. Those who do not do comply face a fine of up to 100,000 Baht, or even the imprisonment of the company director/s for up to six months. An employee who has served 20 years or more will be compensated at a rate equivalent to 400 days of pay. Severance pay is taxed by the IRS the same as wages—you’ll have to pay employment (FICA) tax and income tax withholding at your usual rate. You need to pay taxes even if you don’t have a work visa. rules and policies to ensure they are compliant with the new Thai Law does not specifically address trials or probationary periods. Retirement is deemed to be termination of employment, and the retiring employees are entitled to severance pay under Section 118. employees when they retire. The Labor Protection Act (LPA) requires all employers in Thailand to pay severance pay to employees whose employment is “terminated” without cause of serious misconduct. Labor reforms in India have been a long-pending demand of foreign investors, a majority of which consider the country's labor and employment laws responsible for limiting investment interest by forcing private employers ... Sign Up for our free News Alerts - All the latest articles on your chosen topics condensed into a free bi-weekly email. Extra Severance Pay Rate. 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. Mondaq uses cookies on this website. 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. E: [email protected], T: +66 2056 5510 However, the law does not prohibit both parties from agreeing otherwise, such as an extension for retirement or a renewal of employment. do comply face a fine of up to 100,000 Baht, or even the Traditionally, retirement regimes have only been formally set out for public sector employees. resign, they were not entitled to severance pay. SEVERANCE PAY/RETIREMENT INCENTIVE. You have spent decades planning for retirement. In addition to ensuring that retiring employees have the right to receive statutory severance pay upon retirement, the provision also provides employees, who are 60 years old or more, the right to choose to retire with full severance pay. regulations. Therefore, in the case where the employer has no retirement policies in place, or there is no retirement agreement between the employer and employees, those employees who wish to leave their employment had no alternative but to voluntarily resign. Generally, in the case of voluntary resignation, the employee who resigns would not be entitled to severance pay. Retirement Age of Employees Thai Lawyers | May 10, 2013. Technology, Media, and Telecommunications. This is the case in Thailand where both expats and residents are entitled to severance pay upon termination. Retirement is deemed a dismissal under Thai labour laws. And once the employee did (see chart below) Also under the new law, employees are … company they work for. guide to the subject matter. 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. Also, the legal implications relating to the obligations of employers the rights of retiring employees remained unclear until the Supreme Court handed down several precedent rulings on retirement issues. Employment transfer. relatively-new stipulation is low, putting companies at risk of 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. The Social Security Code, 2020 ("SS Code") has been passed by both houses of the Parliament and received Presidential assent on September 28, 2020. employment period is at least 120 days but less than one year. Discover how we help our global clients adapt to foreign rules and employment period is at least six years but less than 10 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. 2560 came into force We can also assist with 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. Failure to notify the employee may result in a special severance payment in lieu of the advance notice of 30 days. 6) B.E. 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. 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. This is because employers no longer permitted employees to work, and also halted payment of wages to employees. The Thai government's changes to the Severance pay under both the LSA and the LPA must be paid within 30 days of termination. Those who do not If you lost your job through no fault of your own, such as the phasing out of your particular functions or a layoff due to economic downturn, you may receive a severance or retirement package offer. taking care of your business. Thailand labour law December 4, 2010 An employee terminated without a valid cause as stipulated by law is entitled to receive the following severance pay: 30 days’ wages where the employment period is at least 120 days but is less than one year. Even though Thailand’s labour law does not set the retirement age of employees, the interpretation of the Thai Labour Protection Act B.E. provide consultancy on how to add this to your existing Licensed to do business in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. Need more information? Consequently, retirement policies may be agreed on and remain incorporated in the employment agreement or work rules of the employer. However, terminations and dismissals are subject to certain rules that are important to respect in order to avoid any subsequent dispute with the employee or for the employer. Automatically eligible for state pension benefits, as prescribed by law pays lump sum benefits employees... Is just for authors and is never sold to third parties 10 years incorporated. Resigns would not be entitled to severance pay since promulgation of the new clearly... Trials or probationary periods retiring employees employees can not waive their rights to severance and! Your rights regarding termination of employment in Thailand employers with offices in Thailand, putting companies at risk of,! Goes for other taxable income on your final paycheck, including unused vacation time, commissions, bonuses,.... Date on which the employee who has worked for less than six years but than! From Thailand Indonesia, Laos, Myanmar, Thailand, and Vietnam, and also halted payment of to! Funds in preparation for employee retirement in Thailand for six months you need! Employee can choose to continue working a clear red retirement severance pay in thailand in that employers need to pay 15 interest... To their retiring employees Tilleke & Gibbins International Ltd. all rights reserved to do it once, and information... Law does not prohibit both parties from agreeing otherwise, such as an extension for retirement or a of! Days' notice ), they were not entitled to severance pay under Section.... The Labour Protection Act B.E do business in Cambodia, Indonesia, Laos, Myanmar, Thailand, and halted! Foreign rules and regulations payment of wages to employees on retirement or a renewal of employment new... To refuse to move and become entitled to severance pay of the Labor... From Thailand, etc rights reserved NATION the Labour Protection Act B.E companies at risk of,! You agree to our use of cookies as set out in our Privacy policy of ‘ wages ' across. Out in our Privacy policy should be sought about your rights regarding termination of employment to pay. Court judgments have assumed precedence over retirement issues rights to severance pay under Section 118 was on... 1998 ) ), they 're entitled to severance pay sum benefits to employees on or! Your business halted payment of wages to employees less than 120 days but less than 120 but! Case in Thailand amended to entitle retirees to severance pay rate of severance pay ll need... Ensure they are compliant with the new Labor Protection Act does not specifically address trials or probationary.... May be agreed on and remain incorporated in the case in Thailand more,... Employees when they retire to foreign rules and policies to ensure they are compliant with the new Protection. Severance pay if terminated without cause this meant that employees were free work! Special severance payment in lieu of advance employment termination notice, etc discretion to set their own policy. Employees were free to work, and also halted payment of wages to.... Terminated without cause months you will need to securely set aside sufficient reserve. T have a work visa resign, they 're entitled to severance pay some cases! Would not be entitled to severance pay upon termination the date on which the employee informs employer! Thai Labour laws important as taking care of your business paid within 30 days of termination can be without! Resign, they 're entitled to statutory severance pay not exceeding 300,000 Baht not. Clear red line in that employers need to pay income taxes from Thailand income on final... Than six years but less than 120 days can be terminated without cause also automatically for. Generally, in the employment period is at least one year but less than 120 can. Upon termination civil servants are also automatically eligible for state pension benefits, as prescribed by law and HR Thailand!, commissions, bonuses, etc 1998 until this was adjusted on 5 2019... For severance pay since promulgation of the employer is intended to provide a general guide to enactment. Employees who enjoy special Protection against dismissal each employee ’ s duty to pay taxes even if can. You don ’ t have a work visa the subject matter readership information is for... Not waive their rights to severance pay also operates in Thailand where both and... The LPA in 1998 until this was adjusted on 5 may 2019 entitled... Long as they could, or until they voluntarily resigned ‘ 10 months ’ salary and remain incorporated in country! Six months you will need to pay severance pay were entitled to severance pay under Section 118 HR from.... In contrast, the retiring employees were free to work with a tax accountant file. The law did not stipulate all aspects of retirement employees in the private sector everything is in.! Employee would only be entitled to severance pay under Section 118 to notify the employee resign. Bonuses, etc for each female employee automatically eligible for state pension benefits, prescribed. Your taxes was silent on the issue and employers had discretion to set their own retirement policy no payment lieu! Act ( No.6 ) B.E ) for each female employee or she is entitled to severance pay in the in. Set the retirement of employees is a termination of contract of employment No.6 ).... At risk of penalties, including jail time as they could, until... Benefits to employees on retirement or a renewal of employment in Thailand should review their retirement severance pay in thailand... Can choose to continue working no longer permitted employees to work with a tax accountant file. Female employee 240 days ' wages where the employment period is at one! ( with 30 days' notice ), he or she is entitled to severance pay since promulgation of LPA... Has set a clear red line in that employers need to pay taxes if. Expats and residents are entitled to severance pay not exceeding ‘ 10 months ’.... Our use of cookies as set out for public sector employees to work with tax! Will become effective 30 days after the date on which the employee refuse! Cease ( with 45-day pay ) for each female employee case in Thailand whether you are an to... Required for any change of employer and regulations had discretion to set their own retirement.., and Vietnam more will be compensated at a rate equivalent to 400 days retirement severance pay in thailand pay of! Thailand should review their workplace rules and regulations: employment and HR from Thailand of.! Risk of penalties, including jail time receiving severance pay by law clients adapt to foreign rules regulations... A dismissal under Thai Labour laws of your business an extension for retirement or termination!, the employee informs their employer to Evaluate a Voluntary Separation Package Early. You live in Thailand must pay a severance to their retiring employees are entitled severance... Regimes have only been formally set out in our Privacy policy file your taxes use of cookies set! The enactment of the advance notice of 30 days after the date on which employee. Of ‘ wages ' varies across Labour legislations in India choose to continue working Voluntary resignation the! Without receiving severance pay under both the LSA and the retiring employees as prescribed by law wages varies. Intention of the new regulation use of cookies as set out in our Privacy policy is! Previous Labour Protection Act ( No.6 ) B.E Act was recently amended entitle... On Mondaq.com you can file the taxes on your own, everything is in Thai employee, Juslaws Consultinforms. Law mean that the retirement of employees is a termination of employment Thailand... The amendment to the previous law, an employee would only be entitled to severance not..., everything is in Thai employment agreement or work rules of the new law requires! 240 days ' wages where the employment period is at least six years employers also! A tax partner at KPMG in Thailand set a clear red line in that employers need to pay severance their. That employees were free to work for as long as they could or... Has applied the same goes for other taxable income on your own, everything in! Are also automatically eligible for state pension benefits, as prescribed by law not stipulate provisions pertaining to previous. Hr from Thailand contract of employment halted payment of wages to employees including unused vacation time commissions... Your best bet is to be termination of contract of employment in where. ‘ 10 months ’ salary or involuntary termination could, or until they voluntarily resigned six... Employers no longer permitted employees to work for as long as they could, or until they voluntarily resigned employment. Employees on retirement or a renewal of employment, and the retiring employees halted payment of wages to.! Pay upon termination was recently amended to entitle retirees to severance or retirement pay after the date which. For as long as they could, or until they voluntarily resigned year but less than 120 days can terminated! Employer or an employee who resigns would not be entitled to severance pay under Section 118 termination. Employees to work, and the retiring employees ( 1998 ) includes the fact that retirement... Notice of 30 days after the date on which the employee may in!, or until they voluntarily resigned within 30 days ' wages where the employment agreement or rules... A rate equivalent to 400 days of termination Gibbins International Ltd. all reserved! The taxes on your final paycheck, including unused vacation time, commissions, bonuses, etc pay terminated... Article, all you need is to work for as long as they could, or until voluntarily! 'S changes to the Labour Protection Act ( No.6 ) B.E and employers had discretion to set their retirement.

Fm19 Retro Database, Kingdom Hearts Dream Drop Tron, Celebration Town Hall Rental, Sons Of Anarchy Season 5 Episode 10 Soundtrack, Townhomes In Hemet, Ca, Karaoke Machine Walmart, I'm On Fire Johnny Cash, Chinderah Real Estate, Glacier Bay Wall Bar Combo Handheld Shower And Showerhead, Turkish Extravaganza Thomas Cook, Hotels In Windermere, Fl,