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Update: Thai Minimum Wage & the Impact on Work Permits & Visas

Transcript of the above video:

In this video today we are going to be discussing, as the title suggests, some updated information with respect to proposed minimum wage increase that appears to have gone through, and how this may or may not impact foreigners who have work permits here in the Kingdom, work permits and visas.

To be clear, I did another video discussing this topic before we were quite certain that the minimum wage was going to go through. There were some comments on that video and I just wanted to speak to those here really quickly. The thing to take away from this: It's not so much the specifics of the minimum wage itself or how it impacts the people involved with the minimum wage hike as  that directly does not impact foreigners here in the Kingdom. What does impact foreigners here in the Kingdom is the accounting documentation associated with a company's foreign workforce and that foreign workforce has a ratio quota system for the number of foreign employees it can have and provide work permits for. That documentation pertaining to the foreign workforce’s, for example wage as well as Social Security contributions, has an impact on how one applies for and renews one’s work permits and visas so the reason I am talking about this at all, is not particularly to discuss the wage hike itself, it's to discuss the knock-on impact that that wage hike has, in the sense that one has to have one's documentation pertaining to one's foreign employees in good order in order to apply for applications for work permits and/or visas, as well as renewals thereof. So the thing I am trying to get across with respect and the prior one is, these wage hikes will change the way that one needs to account for the wages for certain foreign employees and these wage hikes can result in changes in calculation of things like Social Security benefits or I should say Social Security contributions. Those contributions and the documentation pertaining thereto has to be properly filed and has to be properly filled out otherwise one can see a situation where either the labor department or probably more likely the immigration department sees that documentation, sees it is erroneous pursuant to the new laws and regulations, and may kick back an application for a visa and it could even result in an individual having to leave the country and return on a new visa because the prior application, the supporting documentation, didn't accurately reflect the law at the moment that the application was made. So the thing to take away from this video is not so much the specifics to the wages themselves and pertaining to the workers here in Thailand, but how it can have an impact on foreigners. So just to quote really quickly from the Bangkok Post, an article entitled, “Cabinet Confirms a Wage Hike Relief Measures”. Quoting “the Cabinet on Tuesday endorsed the daily minimum wage hike nationwide from April 1, so that's the minute that this stuff comes into effect, “an increase from 5 to 22 Baht as approved by the tripartite National Wage Committee on January 17. Spokesman for Deputy Prime Minister Somkid Jatusripitak said “the measures include tax incentives that let SME's deduct tax expense for minimum wages paid to employees up to 1.5 times from 1 at present, an adjustment that can absorb employment costs of 9 to 10 Baht a day per employee. Only SMEs with annual sales of at least 100 million baht  and 200 or fewer employees can enjoy the tax  privilege  and wages exceeding the minimum cannot be claimed”.  So, the thing to take away from this video is, first of all, there are certain companies that may receive sort of tax incentive or I should say a tax break, for lack of a better term, in order to sort of soften the blow with respect to these coming in; foreign companies not excluded. There may be companies under the Amity Treaty or companies under BOI that meet the criteria for receiving certain tax benefits as a result of this recent change to the wage scheme so from an accounting standpoint this can be important but the other thing to take into consideration is, this can change the way that certain documentation is filled out, the way that certain calculations need to be made with respect to one's workforce and therefore can have a knock-on effect with respect to one’s applications for work permits and visas.