When an employer’s workforce totals one hundred or more employees, the Skill Development Promotion Act (the “Act”) must be considered. The Act’s objectives are to promote and support occupational skill training and to upgrade skill standards for Thailand’s labor force. It also established a Labor Skill Development Fund (the “Fund”) to serve as a revolving fund for skill development initiatives.
The Act incentivizes private businesses and educational institutions to provide apprenticeships and occupational skill training. For example, any private business that provides occupational skill training — to the labor force generally or to its own employees — using curricula or activities endorsed under the Act is eligible for certain privileges stipulated by the Act.
Any employer with one hundred or more employees is required to arrange yearly labor skill training for at least 50% of its employees (note that teachers do not count toward this calculation for private school and college businesses).
If such an employer fails to provide the required training, it must instead make a contribution to the Fund before March of the following year — except for an employer:
- That is a ministry, department, or government agency;
- That is a foundation, charitable organization, or non-profit organization; or
- Whose activity relates to cultivation and planting, fishing, forestry, animal husbandry, or salt farming; that does not employ any employee for a full year; and that has no other business activities.
The required Fund contribution is currently calculated as 1% of the legal minimum hourly wage for the preceding calendar year (currently THB 300/hour) × 30 × 12 months × the number of employees who did not receive the required training.
If an employer fails to make the full required contribution, it must pay an additional 1.5% of the outstanding contribution per month until the contribution is paid in full.
If such an employer later has either:
(a) fewer than one hundred employees in every month of a calendar year, or
(b) an average of fewer than one hundred employees per month in that calendar year,
then the employer must continue to report its employee numbers but is no longer required to make any payment to the Fund.