by：Sunida Mahapiroon、Surachai Thetphuk
In November 2024, Thailand issued a Royal Decree, Ministerial Regulations, and regulations concerning the Employee Welfare Fund, which were enacted under the Labour Protection Act B.E. 2541 (1998). The purpose of the Employee Welfare Fund is to provide financial security for employees in cases of resignation or death, while also offering alleviate hardship in situations where an employer terminates an employee or terminates without paying severance or other entitlements. Companies with 10 or more employees are required to enroll their employees in the Employee Welfare Fund unless the company has already enrolled them in a Provident Fund, or has provided employee benefits in cases of resignation or death in accordance with the criteria and procedures set forth in the Ministerial Regulations, or if the company operates a business that is exempt under the law.
When does the employer start contributing? According to the Royal Decree on the determination of the Period for Starting the Collection of Contributions for the Employee Welfare Fund B.E. 2567 (2024), the Employee Welfare Fund is scheduled to begin collecting the Contributions starting from October 1, 2025. Therefore, companies must familiarize themselves with the Employee Welfare Fund to ensure compliance with the law.
What the employer Need to know On each payroll date, companies, as employers, are responsible for deducting a portion of employees’ wages as their contribution to the Employee Welfare Fund. Employers must also contribute an additional amount at the rate prescribed by law. Both the employee and employer Contributions must be paid to the Employee Welfare Fund. Employers are required to complete the Application Form Sor Gor Lor.3 to register employees as members of the Employee Welfare Fund. This form, along with the Contribution payment, must be submitted to the Department of Labour Protection and Welfare in the area or province where the company is located by the 15th of the month following the deduction. The first submission must be made by November 15, 2025. This requirement is in accordance with the Regulations of the Employee Welfare Fund Committee on the Submission of Contributions, and Additional Payments to the Employee Welfare Fund B.E. 2567 (2024).
Additionally, the rates for Contributions have been specified in the Ministerial Regulation Specifying Rates of Contributions to the Employee Welfare Fund B.E. 2567 (2024). Under this regulation, employers are required to deduct 0.25% of employees’ wages as their contribution and contribute an additional 0.25% of wages to the Employee Welfare Fund. These rates will apply from October 1, 2025, to September 30, 2030. From October 1, 2030, onwards, both the employee’s and the employer’s Contributions will increase to 0.5% of wages. These deductions must be made every payroll period.
As mentioned above, if an employer fails to submit the Contributions, or submits an incomplete amount within the specified timeframe, the employer will be required to pay an additional charge to the Employee Welfare Fund at a rate of 5% per month on the outstanding amount until the full payment is made. Furthermore, failing to enroll employees in the Employee Welfare Fund is a criminal offense. Employers who fail to comply may face imprisonment for up to 6 months, a fine of up to THB 10,000, or both, in accordance with the Labour Protection Act B.E. 2541 (1998) and the Regulations of the Employee Welfare Fund Committee on the Submission of Contributions, and Additional Payments to the Employee Welfare Fund B.E. 2567 (2024). As an initial enforcement measure, a labour inspector will issue a warning letter, requiring the employer to make the Contributions payments within 30 days from the date of receiving the letter. If the employer ignores the warning, the labour inspector has the authority to assess the amount of Contributions that the employer is required to submit, based on the Regulations of the Employee Welfare Fund Committee on the Criteria and Procedures for Assessing Contributions to the Employee Welfare Fund B.E. 2567 (2024).
However, employers are not required to enroll their employees in the Employee Welfare Fund if they have already provided equivalent or alternative benefits. This includes cases where the employer has enrolled employees in a Provident Fund under the Provident Fund Act B.E. 2530 (1987), or where the employer provides employee benefits in cases of resignation or death as specified in the Ministerial Regulation Specifying Criteria and Procedures for Employers to Provide Assistance in Cases of Employment Termination or Death B.E. 2567 (2024). Under this regulation, the employer must deposit the Contributions into a bank account in the employee’s name at a rate no lower than that required in the Provident Fund. Additionally, businesses that are not subject to the Employee Welfare Fund requirement, such as non-profit organizations as defined in the Ministerial Regulation (B.E. 2541) issued under the Labour Protection Act B.E. 2541 (1998), including foundations and associations, are also exempt. In these cases, employers do not need to enroll their employees in the Employee Welfare Fund.
Compared to the Social Security Fund, which provides compensation in cases of unemployment or death not caused by work, the Social Security Fund imposes specific eligibility requirements for compensation. For instance, in the case of unemployment, an employee must have contributed to the fund for at least 6 months and within 15 months prior to becoming unemployed and must meet other legal conditions to receive compensation of 50% or 30% of their wages, depending on the case. In the case of death not caused by work, the employee must have contributed for at least 1 month and within 6 months before their death. In contrast, the Employee Welfare Fund does not impose such conditions. Employees are entitled to receive their Contributions from the Fund regardless of the reason for resignation, termination, or death. Even in cases of serious misconduct where an employer terminates an employee without paying severance, the employee still retains the right to receive Contributions from the Employee Welfare Fund.
Compared to the Provident Fund, which is a voluntary contribution, regulated by the Securities and Exchange Commission (SEC). The Provident Fund is designed to serve as a long-term savings plan, and employees receive benefits upon resignation or exit from the fund, subject to the fund’s terms and conditions in the fund’s regulations. In contrast, the Employee Welfare Fund grants benefits only upon resignation or death, and employees cannot voluntarily withdraw from the fund while still employed. Moreover, employers who do not enroll employees in a Provident Fund are not subject to any legal penalties. However, failing to enroll employees in the Employee Welfare Fund may result in fines and/or imprisonment. Additionally, the minimum and maximum contribution rates for the Provident Fund are generally higher than those of the Employee Welfare Fund.
Regarding the Provident Fund, even if employers have already established a Provident Fund, some employees may choose not to enroll in the Provident Fund, in which case the employer is still required to enroll them in the Employee Welfare Fund. As a result, companies must manage both the existing Provident Fund and the newly established Employee Welfare Fund to ensure compliance with these legal requirements.
Some companies may have policies requiring employees to complete a probationary period before being eligible to join the Provident Fund. During this probationary period, employers must enroll employees in the Employee Welfare Fund, as it is a mandatory fund for employers. Once employees successfully pass the probationary period, the employer may allow them to enroll in the Provident Fund while also maintaining their status in the Employee Welfare Fund, depending on the agreement between the employer and the employee. In the future, we believe the Ministry of Labour may issue additional regulations on this matter.
The Employee Welfare Fund is established with the objective of providing financial security and alleviating hardship in cases where employees are terminated, resign, or die. Employers with 10 or more employees are required to enroll their employees in the Employee Welfare fund; failure to do so may result in legal penalties. Therefore, employers should prepare for the establishment and administration of the Employee Welfare Fund to ensure full compliance with the applicable regulations and promote employee savings, contributing to financial stability and security for employees after their employment with the company ends.
