Thai Employment Law for Expats: The Labour Protection Act, Notice & Severance (2026)

Thailand is one of the easier places in Asia to hire into and one of the more expensive to fire out of. The gap between those two facts is where foreign employers lose money: setting up a payroll in Bangkok is straightforward, but unwinding a senior hire eight years later, badly, costs eight months of salary plus whatever a Labour Court adds.

The reason is structural. Thailand has neither at-will employment nor a statutory cause requirement for dismissal. An employer may terminate an indefinite contract for any reason or none — but unless the dismissal falls inside a short, closed list of employee defaults, severance is payable as arithmetic. There is no exemption for probationers past 120 days, none for expatriates, and no useful way to draft around it.

Does the Labour Protection Act really apply to foreign employees in Thailand?

It does, completely, and this is the most common misconception on both sides of an expatriate hire. The Labour Protection Act B.E. 2541 (1998) — administered by the Ministry of Labour through the Department of Labour Protection and Welfare (DLPW) — regulates the employment relationship itself. Nationality, visa category and work-permit status are immigration questions; they do not change the labour-law answer.

A foreign employee therefore has the same entitlement to the severance table, pay in lieu of notice, the statutory leave floor and overtime premiums as any Thai employee, plus the same standing before the labour inspectorate and the Labour Court. Employers cannot maintain a less protective policy set for foreign staff, exclude them from bonus schemes, or apply a different disciplinary process.

The expatriate side is surprised because the headline package sits so far above the statutory floor that the floor looks irrelevant — yet the floor is what a court enforces when the package falls apart. The employer side is surprised because foreign-owned businesses arrive with a home-country mental model: a probation period you can exit freely, a notice period that substitutes for severance, a release letter that closes the file. None of those three assumptions survives contact with Thai law. Securing the right to work is a separate exercise, covered in our guide to the Thai work visa and work permit process for expats.

What must a Thai employment contract contain, and which language version governs?

Thai law is permissive on form and unforgiving on substance. Contracts may be written or verbal, and a written contract is not strictly compulsory — which is precisely why it matters. Where no clear written terms exist, Thai courts tend to resolve ambiguity in the employee’s favour, because the statute treats the employee as the weaker party to the bargain.

A contract that holds up should state the role, wages and payment cycle, working hours, overtime treatment, annual leave, sick leave, public holidays and the termination mechanics. Two details are specific to Thailand: monetary amounts should be in Thai baht, and the role and workplace should match the work permit, because work outside the permitted scope creates an immigration problem additional to any labour dispute.

The Thai-language question

Here practitioners genuinely diverge. Some treat a Thai-language contract as a legal requirement and list its absence among the standard compliance failures of foreign employers; others present Thai as strongly recommended rather than mandatory. The consequence is not in dispute: Labour Court proceedings run in Thai, so an English-only contract gets translated for the court, and the translation is argued over at exactly the moment the wording matters most.

The workable answer is a bilingual contract executed in both languages with an explicit governing-language clause and a Thai version that was drafted rather than machine-translated. Do not assume that clause settles which version wins: it allocates priority between two texts, but it cannot displace the statutory minimum, and a term less favourable than the Act is unenforceable to that extent in any language.

What is the minimum wage in Thailand in 2026, and did the THB 400 nationwide promise happen?

The honest answer is that it has not happened. THB 400 nationwide remains a policy commitment delivered in slices.

The rates in force come from the National Wage Committee’s Notification No. 14, which the Cabinet acknowledged and which took effect on 1 July 2025. It sets 17 distinct daily rates from THB 337 to THB 400. The THB 400 rate applies to Bangkok across all business types; to Phuket, Chachoengsao, Chonburi and Rayong; to the Koh Samui district of Surat Thani; and — nationwide, regardless of province — to hotels of types 2, 3 and 4 and to entertainment establishments serving food or alcohol, such as nightclubs, pubs, bars, massage parlours and karaoke venues. Type 1 hotels, meaning accommodation-only properties with fewer than 50 rooms, fall outside that nationwide category.

The preceding round, effective 1 January 2025, had already moved 17 rates by 7 to 55 baht a day — averaging about 2.9% — and introduced THB 400 in Phuket, Chachoengsao, Chonburi, Rayong and Koh Samui district. The nationwide extension keeps stalling: the target of THB 400 everywhere during 2024 was missed, and in May 2025 the Labour Minister was still describing a gradual move toward it. Part of the obstruction is procedural — setting a minimum wage needs a two-thirds quorum including at least two employer and two employee representatives plus a two-thirds vote, and in July 2024 five members of the 22nd Wage Committee challenged the resolution adjusting the formula to reach THB 400 as unlawful. The tripartite structure that makes the rate legitimate also makes it slow.

Two operational notes. The minimum is a daily rate, so monthly-paid staff must be tested per day; and once gazetted it applies equally to every employer in the covered area, with the notice posted at the workplace. For expatriate hires the binding constraint is rarely the minimum wage but the minimum monthly income thresholds applied by immigration and the Department of Employment, running from THB 25,000 to THB 50,000 by nationality — covered in our breakdown of what it really costs to relocate an employee to Thailand.

How do probation and fixed-term contracts actually work under Thai law?

Probation is not a dismissal right

Thai law contains no special probationary dismissal power. Section 17 is explicit that a contract with a probationary period is treated as a contract with no fixed term, so ordinary notice rules apply from day one and ordinary severance rules from day 120. A four- or six-month probation is a performance-management convention, not a legal status.

The only line carrying legal weight is 120 days of service. Below it, nothing is owed. At or above it, the first band opens and 30 days’ wages becomes payable on a termination without statutory cause — so an employer exiting a probationer in month five pays severance plus pay in lieu of notice, exactly as for a confirmed employee.

Fixed-term contracts avoid severance only in narrow cases

A validly constituted fixed-term contract expires on its own terms, attracts no severance and needs no notice. But the Act confines the device to three categories: special projects outside the employer’s normal course of business, work with a defined start and completion schedule, and seasonal work. The term must not exceed two years, and extending it once the work is complete destroys its fixed-term character.

The failure mode is predictable. An employer puts a core, ongoing role — a finance manager, a country sales lead — on rolling one-year contracts, renews three times, then treats year four’s expiry as a cost-free exit. It is not: the role was never outside the normal course of business, the renewals destroyed the fixed-term character, and three-plus years of continuous service is 180 days’ wages.

What are the working hours, overtime premiums and leave entitlements?

Working time is capped at 8 hours a day and 48 hours a week; hazardous work is capped lower, at 7 hours a day and 42 a week. An employee must get a rest period of at least one hour after no more than five consecutive hours, and at least one weekly rest day with no more than six days between rest days. Where the business requires it — hotels, transport, forestry, remote operations — weekly rest days can be accumulated and taken within four consecutive weeks. Unused hours from a short day may be redistributed up to a maximum of nine hours in any one day, with anything beyond eight hours under that arrangement paid at not less than 1.5 times the normal hourly rate. Overtime generally requires the employee’s consent except in emergencies, and runs to a practical cap of 36 hours a week.

Leave: the statutory floor and what the market actually pays

• Public holidays: not fewer than 13 traditional holidays a year, announced in advance and including National Labour Day. If one falls on the weekly rest day, a substitute follows on the next working day; if the work cannot be interrupted, the parties agree a substitute or the employer pays holiday-work rates.
• Annual leave: not fewer than 6 working days a year, and only after one full year of continuous service. Shorter service can be credited pro rata, the employer may fix the dates, and unused leave can be carried forward by agreement.
• Sick leave: as many days as the employee is actually sick, with employer-paid sick leave capped at 30 working days a year. A certificate from a first-class modern-medicine practitioner or a government hospital can be required for three or more consecutive working days; failing that, an explanation suffices. Work-injury absence and maternity leave do not count against it.
• Maternity leave: 98 days, inclusive of holidays and prenatal appointments, raised from 90 by the 2019 amendment. The employer pays full wages for the first 45 days; the Social Security Office covers the remainder at 50% of wages, subject to the contribution ceiling.
• Personal business leave: 3 working days a year, not deductible from annual leave. Military service leave: up to 60 days at basic pay.

Six days of annual leave is genuinely low by regional standards, and the market knows it. Competitive Bangkok employers — and essentially all employers hiring expatriates — offer far more, commonly mid-teens to twenty days, treating the statutory six as a floor that never appears in an offer letter. That has an exit consequence: unused leave is payable on termination, and on a dismissal without cause both accumulated and pro-rated leave is payable, so a generous policy quietly inflates the final settlement. Pregnancy also brings work restrictions rather than just leave — no vibrating machinery, no work on or in vehicles, no lifting or pushing loads over 10 kilograms, no work on a ship.

How much severance is owed, and when is none owed at all?

This is the centre of Thai employment economics. Severance is owed on any employer-initiated termination that does not fall within the statutory causes — and critically, it is owed regardless of notice. Notice and severance are separate obligations, not alternatives. An employer that serves a full pay period of notice still owes the entire severance entitlement; an employer that dismisses immediately owes pay in lieu of notice and severance.

The illustration column is arithmetic on a THB 150,000 monthly salary, taking 30 days as one month, because the day-counts understate the exposure when read quickly. The 400-day top band is recent — introduced by the Labour Protection Act (No. 7) B.E. 2562, effective 5 May 2019 — and it means a long-serving country manager carries more than a year of salary in accrued termination liability off the balance sheet.

The causes that remove severance

Section 119 sets out the closed list. No severance is payable where the employee:

1. performs duties dishonestly, or intentionally commits a criminal act against the employer;
2. wilfully causes the employer damage;
3. causes serious damage to the employer through negligence;
4. violates lawful and equitable work rules or orders of the employer — but only where a prior written warning has been issued;
5. is absent for three consecutive working days without reasonable cause, whether or not a holiday falls in between; or
6. is sentenced to imprisonment by a final court judgment.

The written-warning condition on ground 4 is where most employer cases collapse, and it is no technicality. Breach of work rules is the only ground covering ordinary misconduct, and it is unavailable without a documented prior warning on the same or similar conduct. Dismissing for rule violations with no prior warning does not produce a slightly weaker cause dismissal — it produces a wrongful dismissal, with severance, pay in lieu of notice and unfair-dismissal exposure all restored.

Section 17’s notice rules do not apply to section 119 dismissals, which is the one genuine advantage of establishing cause: a properly founded cause dismissal is immediate and costs nothing in severance or notice. Wages and overtime earned to the last day worked are payable within three days of termination either way.

Section 120 catches employers restructuring their footprint. Where the employer relocates the place of business in a way that materially affects an employee’s ordinary living, the employee who declines to move can terminate and claim statutory compensation rather than resigning empty-handed. These petitions are decided case by case and appear regularly in the Ministry’s own committee proceedings, so an office move across provinces should be costed as a potential severance event, not an administrative detail.

What does an unfair termination claim cost an employer in the Labour Court?

Thailand’s Labour Court is deliberately cheap and deliberately accessible, and foreign employers consistently underestimate what that means: filing is not a commercial decision for the employee in the way litigation is elsewhere. The forum is designed to be used.

The remedy sits in section 49 of the Act on the Establishment of and Procedure for Labour Court. Where the court finds the dismissal unfair it may order reinstatement at the same wage. Where it concludes the parties cannot realistically continue together, it sets compensation instead, weighing the employee’s age, length of service, the hardship caused by the dismissal, the cause of the dismissal and the compensation otherwise payable. Read that last factor twice: section 49 damages are assessed in addition to statutory severance, not in place of it. Severance is the floor, not the settlement.

In 2024 the court received 10,572 new cases and carried forward 4,658, for a total caseload of 15,230; it completed 10,718 and ended the year with 4,512 pending. A single case can carry several of the claims above, so the figures do not add to a case count — but the shape is unambiguous. Unfair dismissal, severance and pay in lieu of notice are the top three, and they are precisely the liabilities created by the botched termination described above. Duration compounds the cost: around 34% of the completed cases — some 3,660 — took more than six months, and 891 ran beyond a year.

Most disputes never reach court, because the administrative channel is easier still. In 2025 the Ministry of Labour handled 30,629 grievances involving 46,384 employees and issued 24,542 decisions determining entitlements for 37,006 employees, worth more than THB 1.92 billion — up from 11,585 grievances in 2019, a near-tripling in six years. Separately, wrongful dismissal carries a fine between THB 5,000 and THB 200,000 and/or up to one year’s imprisonment, and unlawful deduction of wages or overtime pay up to six months’ imprisonment and/or a THB 100,000 fine.

Work rules: the document that decides whether a dismissal is cheap or expensive

Written work rules are not paperwork hygiene; they are the precondition for ground 4 of section 119. You cannot issue a valid prior written warning for breaching work rules you never wrote, published or made available. The Act requires employers to maintain written work rules once the business reaches a modest size — it uses a ten-employee trigger for several obligations, including the new Employee Welfare Fund — and to keep them accessible to staff and inspectors; employers above a larger headcount must also constitute an employee welfare committee as a consultation body. Confirm the current headcount triggers and filing mechanics with the DLPW, as they sit in the Act’s regulations rather than its headline provisions.

The evidentiary point holds regardless of threshold. When a claim lands, the employer must produce the contract, the work rules, payroll and attendance records, correspondence, investigation notes and any prior warnings. An employer that can show a published rulebook, a signed acknowledgement and a dated warning letter is defending a cause dismissal. One that cannot is paying severance.

Non-compete clauses

Thai law does not prohibit post-employment restraints, and they appear routinely in senior contracts. Enforceability is discretionary and reasonableness-based: an unduly wide restraint is open to challenge as an unfair contract term under Thailand’s unfair-contract-terms legislation, and the courts’ posture toward clauses that disadvantage employees — visible in their reluctance to enforce waivers of statutory rights given during employment — points the same way. Draft narrowly on duration, geography and defined competitor scope, and do not price an acquisition or key-person hire on the assumption that a broad restraint will hold.

What compliance obligations change for employers in Thailand in 2026?

Employer and employee each contribute 5% of monthly wages to the Social Security Fund. The wage ceiling for that calculation rose from THB 15,000 to THB 17,500 with effect from 1 January 2026, under a ministerial regulation issued on 11 December 2025, lifting the maximum monthly contribution from THB 750 to THB 875 for each side. It steps up again to THB 20,000 for 2029–2031 and THB 23,000 from 2032; the contribution floor stays at THB 1,650 a month, and contributions are payable by the 15th of the following month. Because maternity pay beyond the employer-funded 45 days is a percentage of insured wages, the higher ceiling also modestly raises what the Social Security Office pays out. The wider picture, including personal income tax at 5% to 35% and the 180-day residency trigger, is in our guide to expat payroll, tax and social security in Thailand.

The Employee Welfare Fund switches on 1 October 2026

The Employee Welfare Fund has sat in the Labour Protection Act for years without collecting anything. That ends on 1 October 2026, after a postponement of the original commencement date.

• Rates: 0.25% from the employee and 0.25% from the employer from 1 October 2026 to 30 September 2031, then 0.50% each from 1 October 2031. There is no minimum or maximum wage ceiling — unlike social security, the contribution runs on the full wage.
• Who is in: employers generally become subject on reaching ten employees, counted at legal-entity level across all branches, and the obligation survives a later fall below ten. Fisheries, non-profit activities, schools and private higher-education institutions (for teaching personnel) and state enterprises are exempt. The provident fund exemption applies only to actual members of a qualifying fund, assessed employee by employee — so probationers, opt-outs and fixed-term staff outside the fund still need coverage.
• Foreign employees count. Membership turns on the actual employment relationship, which includes foreign employees and, on the facts, some directors and interns.
• Wage base: salary, cash meal and housing allowances, position and professional allowances, performance-based wages, annual leave encashment and statutory paid leave wages are in. Overtime, bonuses, diligence and shift allowances, target-based commissions, incentive payments, reimbursements and benefits in kind are out — classification follows the nature of the payment, not its label.
• Mechanics: Form SKL.3 for registration and monthly reporting, due the 15th of the following month. The first payment, covering October 2026 payroll, is due by 15 November 2026, with submission open from 1 November 2026. Late payment carries a 5% monthly surcharge, a part-month of 15 days or more counting as a full month.
• It does not replace severance. On termination — resignation, dismissal or redundancy — the employee can claim their own contributions, the employer’s contributions and accrued interest. That is in addition to statutory severance, not a credit against it.

The backdrop is a shrinking workforce: Thailand’s labour force is projected to fall from around 40.2 million in 2025 to 37.2 million by 2040 — roughly three million workers, and an argument for retention economics over churn. Employers building a Thai team should read this alongside our guide to employer compliance when hiring expats in Thailand, since these obligations run in parallel with work-permit ratios and capital requirements.

Frequently Asked Questions