Thailand Employment Contracts: What Must Be Included by Law

Do you know what the law requires to be included in an employment contract in Thailand? Are you hiring personnel or accepting employment with an employer and want to know if it is compliant under Thai labor law? We at PD Legal have helped employers, employees, and business owners across Thailand to make all employment contracts legal, clear, and safe for all involved. Here’s the fundamentals that you ought to understand when writing or reading a Thai work contract — simple and easy to comprehend.

Written vs. Verbal Employment Agreements

Thai labor law allows both written and verbal employment agreements. However, a written contract is highly recommended to avoid future disputes. A written employment contract provides clarity and a clear reference point in case disagreements arise later.

Even without a written document, once a person starts working under agreed terms, an employment relationship exists. Still, documenting the agreement protects both employer and employee under the law.

What to Include in Every Employment Contract in Thailand

To comply with Thai labour law, an employment contract should clearly include the following:

Full names and details of the employer and employee

• Job title and description of duties
• Start date and type of employment (e.g., permanent, fixed-term)
• Working hours and weekly rest days
• Wage or salary amount, payment schedule, and method of payment
• Any benefits such as allowances, bonuses, or leave entitlements
• Probation period (if any), including its duration and conditions
• Termination conditions and notice period

These elements help define the terms of employment and ensure transparency between both parties.

Working Hours, Rest Days, and Overtime

The standard working hours under Thai labour law are no more than 8 hours per day or 48 hours per week. Any work exceeding these limits is considered overtime and should be compensated accordingly.

Employees are entitled to:

• A minimum of 1 rest day per week
• Public holidays as announced by the government
• Annual paid leave of at least 6 working days after one year of service

The employment contract should outline these entitlements clearly.

Salary and Benefits

Every employment contract must include wage-related details. These may include:

• Basic salary
• Overtime pay (in compliance with legal rates)
• Social security contributions
• Allowances such as housing or transport
• Any non-statutory bonuses or incentives

Employers are required by law to register employees with Thailand’s Social Security system and contribute monthly payments. These legal obligations must be clearly stated in the employment contract to prevent misunderstandings.

Probation Periods

Probation periods are common in employment contracts in Thailand and are legally acceptable. However, even probationary employees are protected by the Labour Protection Act. This means:

• Termination must follow legal notice requirements
• Final wages and benefits must be settled properly
• Any earned compensation must still be paid

Typically, probation periods in Thailand do not exceed 119 days, as employees become entitled to severance pay from the 120th day onward.

Termination and Severance Pay

Termination clauses must be detailed and follow legal procedures. This includes:

• The required notice period (usually at least one full pay cycle)
• Circumstances that justify immediate dismissal
• Severance pays, which is mandatory depending on the length of service

Here’s a general overview of severance pay based on years of service:

• 120 days to less than 1 year – 30 days’ wages
• 1 to less than 3 years – 90 days’ wages
• 3 to less than 6 years – 180 days’ wages
• 6 to less than 10 years – 240 days’ wages
• 10 years or more – 300 days’ wages

Employment contracts should not contradict these statutory protections.

Confidentiality and Non-Compete Clauses

While not mandatory, some employment contracts include clauses on confidentiality, intellectual property, and non-compete restrictions. These clauses must be reasonable in scope and duration to be enforceable under Thai law.

If included, they should be clearly worded and balanced to protect legitimate business interests without unfairly limiting future employment opportunities.

Common Issues to Avoid

When preparing an employment contract in Thailand, it’s important to avoid:

• Using templates not aligned with local law
• Failing to specify payment and leave entitlements
• Ignoring the mandatory severance pay provisions
• Adding clauses that contradict Thai labour protections

Employment contracts must reflect actual work arrangements while respecting all applicable labor laws.

Why Work With PD Legal?

Creating legally sound employment contracts in Thailand is not something to leave to chance. At PD Legal, our experience in employment law ensures that your contracts are clear, compliant, and enforceable. Whether you’re a startup hiring your first employee or a multinational expanding your Thai team, we’re here to support you every step of the way.

Conclusion

Thailand employment contracts play a key role in protecting both employers and employees. Clear terms on salary, duties, leave, and termination aren’t just best practice—they’re required by law.

At PD Legal, we’re here to help you stay compliant and avoid costly disputes. Reach out to us today and let us guide you through every step of your employment matters!

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