Legal Update: Postponement of the Implementation of Employee Welfare Fund in Thailand to October 1, 2026
On August 26, 2025, the Cabinet approved the agenda to postpone the enforcement of the Employee Welfare Fund to October 1, 2026. The cabinet provides reasons for this postponement that (1) the economy has an adverse impact from the new US tax and the border conflict with Cambodia, and (2) to relieve the financial burden for both employers and employees.
The new Ministerial Regulations need to be revised in order to reflect the postponement. However, we expect that the requirements of the fund will remain unchanged, which we summarized for you below.
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 must enroll their staff in the Employee Welfare Fund, unless they already provide provident fund incentives. - 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, provided they are documented in accordance with the regulations; however, 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 1, 2026.
For legal guidance on compliance or further clarification, please contact our office.