Severance pay for employees on daily wages
Employees that receive their wages on a daily basis are entitled to severance pay when their employer terminates their employment, the same as full-time employees.
Keywords: Mazars, Thailand, Legal, Severance pay, Labour Protection Act, Wage rate
28 February 2020
The Labour Protection Act sets out six severance pay rates based on the length of time that the employee worked, shown in the table below:
Length of Time Worked | Rate |
120 days or more, but less than 1 year | Not less than 30 days at the latest wage rate. |
1 year or more, but less than 3 years | Not less than 90 days at the latest wage rate. |
3 years or more, but less than 6 years | Not less than 180 days at the latest wage rate. |
6 years or more, but less than 10 years | Not less than 240 days at the latest wage rate. |
10 years or more, but less than 20 years | Not less than 300 days at the latest wage rate. |
20 years or more | Not less than 400 days at the latest wage rate. |
When calculating severance pay for employees that receive their wages on a daily basis, the following criteria must be taken into the account:
1. Length of time worked – This is the consecutive time worked starting from the first working day to the effective date of termination. The length of time worked must also include:
- Holidays;
- Days on which the employee is on leave;
- Days on which the employer has ordered the employee not to work in the interests of the employee; and
- Days on which the employer has ordered the employee not to work in the interests of the employer.
2. Latest wage rate – This is the daily wage rate for the employee.
Example: Mr. A started working by the day at XYZ Company on 1 June 2019. Under his employment contract, Mr. A is required to work 3 days a week at the daily rate of THB 400. Due to a recession, XYZ Company terminated his employment contract effective 30 September 2019.
As the length of time that Mr. A worked is 122 days, he is entitled to severance pay of THB 12,000 [THB 400 x 30 days (rate for length of time worked)].
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