The Government’s proposed 300 Baht minimum daily wage is one of the most eye catching policies currently under consideration. Expected to be launched in 2012, we consider the significant points and their likely impact.
Keywords: Thailand, Legal, Minimum Wage, 300 Baht
Currently, the minimum daily wage ranges from 159 Baht in Phayao to 215 Baht in Bangkok and 221 Baht in Phuket.
Our understanding is that the new minimum wage will be launched on 1 January 2012 in an initial 7 provinces: Bangkok, Samut Prakan, Nonthaburi, Samut Sakhon, Nakhon Pathom, Pathum Thani and Phuket. Further provinces would be introduced gradually over the next four years.
Much publicised concerns include:
- An increase in production costs without any increase in production output.
- A shortage of skilled labour.
- Multinational companies with large labour forces are likely to consider investing in neighbouring countries with more competitive cost structures.
In response the Department of Skill Development under the Ministry of Labour, has announced additional training for new and non-skilled labour.
However, the wage increase is also an opportunity for companies in Thailand to further automate manufacturing processes. Companies should consider obtaining Board of Investment (‘BOI’) promotions which include incentives such as tax holidays and reduced import duties.
As further announcements are made the picture will become clearer, although the real impact of the proposed minimum wage increase will not be known for some time.