Legal Update: Implementation of the New Employee Welfare Fund in Thailand Effective October 1, 2025
We would like to inform our clients and partners about the upcoming enforcement of the Employee Welfare Fund under Thai labor law, scheduled to start on October 1, 2025. This new regulation aims to strengthen social security protections for employees and establish a mandatory savings mechanism in cases of job termination or death.
Overview of the Employee Welfare Fund
Established under Section 126 of the Labor Protection Act B.E. 2541 (1998), the Welfare Fund is managed by the Department of Welfare and Labour Protection. Its primary purpose is to provide financial assistance to employees in critical circumstances, including resignation, death, or other situations as defined by the Fund’s committee.
Key Points and Responsibilities
- Mandatory Enrollment:
Companies with 10 or more employees are required to enroll their staff into the Employee Welfare Fund. This requirement applies regardless of whether the company already maintains a pension or other welfare programs, as the Welfare Fund serves as additional financial security. - Exemptions:
Non-profit organizations such as foundations, associations, or other entities with no profit motive are exempt from compulsory participation. - Employer Obligations:
Employers must-submit employee details and enrollments. Those opting to establish their own welfare schemes can do so if documented according to the regulations, but they are not obliged to participate in the Welfare Fund. - Voluntary Membership:
For companies not mandated to participate (e.g. foundations, NGOs, or associations as explained above), employees may voluntarily join the Welfare Fund with the employer’s consent, following the committee’s regulations. - Contribution Rates:
Contributions are set at 0.25% of wages from October 1, 2025, to September 30, 2032. From October 1, 2032, onwards, contributions increase to 0.50%.
Employers are responsible for deducting these contributions from wages and remitting them monthly, by the 15th of each subsequent month. - Calculation Base:
Contributions are calculated based on total wages, including performance-related pay. - Penalties for Non-Compliance:
Employers failing to remit contributions, or submitting false data, are subject to a penalty of 5% per month on the overdue amount. Labor inspectors will issue notices requiring overdue payments within 30 days. - Employee Benefits:
Upon termination of employment—whether by resignation, retirement, termination, or passing—the employee is entitled to receive accumulated contributions, benefits, and accrued interest. In the event of death, payouts will be made to designated beneficiaries as per the employee’s instructions. - Legal Penalties:
Failure to comply with reporting requirements, or providing false information, may result in imprisonment of up to 6 months, a fine of up to 10,000 Baht, or both.
Conclusion
The introduction of the Employee Welfare Fund represents a significant development in Thailand’s labor protections, emphasizing financial security for employees during employment transitions and after death. Employers are advised to review their compliance obligations and prepare for implementation starting October 2025.
For legal guidance on compliance or further clarification, please contact our office.