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Employers face fines over minimum wage

Less than ten dollars a day, but companies trying to avoid paying it

Employers face fines over minimum wage
A slum in central Bangkok

Companies that have failed to start paying their employees a new daily minimum wage face legal action, a top civil servant warned yesterday.

Labour department director-general Arthit Issamo said that employers who include other benefits under the guise of increasing the basic wage have just one month to change or they too will be prosecuted and if convicted will face six months jail and/or a fine of up to 100,000 baht (US$3,250).

On April 1, the government imposed a new minimum daily wage of 300 baht but companies and trade bodies have been vociferous in their opposition.

Bhumindr Harinsult, vice chairman of the Thai Chamber of Commerce (TCC), told The Nation yesterday the increase could force some 200,000 small-to-medium sized businesses to close or quit the country “within six months”, while a car parts manufacturer claimed the new threshold might “force Japanese companies to relocate to neighbouring countries.”

Bhumindr was quoted as saying that security guards, maids, hotel staff and contractors might lose their jobs because their employers could not shoulder higher costs.

But Arthit denied it would be a problem. “"I don't believe they will be sacked because then who will guard and clean the business premises?" he said.

The TCC produced figures yesterday suggesting foreign direct investment would be hard hit by the 300 baht daily wage.

FDI to Thailand would drop by 25 percent from the annual average of 400 billion baht. Some foreign investors, particularly those in labour-intensive industries, would look at other countries in ASEAN with lower personnel costs, Bhumindr was quoted as saying.

Other commentators fear a sharp rise in employment of migrant labour from neighbouring countries as the new wage rule does not apply to them.

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