Commencement of Mandatory Contributions to Employee Welfare Fund

For many years, the Labour Protection Act B.E. 2541 (1998) (“LPA”) has included legal provisions relating to the Employee Welfare Fund. Section 130, paragraph 1 of the LPA essentially provides that employees who work for businesses that have 10 or more employees are entitled to enroll in the Employee Welfare Fund. However, the LPA also states that the collection of contributions for the Employee Welfare Fund under the LPA will commence only upon the enactment of a Royal Decree, and no such decree was enacted until last year. Therefore, employers were not obligated to make contributions to the Employee Welfare Fund, and the establishment of a Provident Fund remained, by nature, an optional benefit provided to employees.

In 2024, Thailand enacted the Royal Decree on the Commencement Date for the Collection of Contributions and Supplementary Contributions to the Employee Welfare Fund B.E. 2567 (2024), together with other related subordinate legislation. Employers subject to these requirements must begin contributing to the Employee Welfare Fund, by remitting both their own contributions and the amounts deducted from employees’ wages. The mandatory collection and contribution initially was scheduled to start on 1 October 2025. However, due to economic conditions and uncertainties—such as the increase in U.S. tariffs and the mid-year minimum wage adjustments, which directly impact businesses—the Ministry of Labour realized relief was needed. A proposal was submitted to the Cabinet to postpone the commencement of contributions, and on 14 September 2025, the Royal Gazette published the Royal Decree on the Commencement Date for the Collection of Contributions and Supplementary Contributions to the Employee Welfare Fund B.E. 2568 (2025), which revokes the 2024 Royal Decree, sets a new commencement date, and effectively postpones the start of contributions to 1 October 2026.

The following explanation of the Employee Welfare Fund is noteworthy, and should be helpful to employers:

1. The Employee Welfare Fund is designed to provide financial support to employees upon the cessation of their employment or to their families in the event of their deaths.
2. The Employee Welfare Fund applies to employers with 10 or more employees.
3. The Employee Welfare Fund does not apply to employers that have established a provident fund for their employees, or that provide assistance to employees in the event of employment termination or death in accordance with the prescribed Ministerial Regulations. However, in those cases, employees also must participate in those programs. Therefore, even if an employer has established a provident fund or other assistance program, the employer still is required to enroll employees who refuse to participate in those programs in the mandatory Employee Welfare Fund.
4. According to the new Ministerial Regulation on the Rates of the Contributions and Supplementary Contributions to Employee Welfare Fund B.E. 2568 (2025), there are two stages of collection:
   • During the initial period, from 1 October 2026 to 30 September 2031, qualifying employers must make deductions for contributions from relevant employees’ wages at a rate of 0.25%, and remit those funds, together with the employer’s supplementary contributions (calculated at the same rate) to the Labour Protection and Welfare Office in the area in which the employer’s business establishment is located. 
   • From 1 October 2031 onward, the rate of contributions will increase to 0.5% for each contributing party.
5. There will be certain requirements relating to the submission of documentation and relevant forms to the authorities, similar to the Social Security Fund.

We recommend that employers monitor future developments relating to the mandatory Employee Welfare Fund, in order to be prepared for its official implementation.

This Newsletter is intended merely to provide a regulatory overview and is not intended to be comprehensive; it does not constitute the provision of legal advice. Should you have any questions on this or on any other areas of law, please do not hesitate to contact the following:

Chanakarn Boonyasith
Partner

Pitchabsorn Whangruammit
Associate

Atthawut Wuvanich 
Associate

Authors