Labour Minister Phiphat Ratchakitprakarn has confirmed that the nationwide minimum wage will increase to 400 baht per day starting October 1, despite concerns from businesses about the potential economic impact. Following discussions with business leaders and a detailed study by a Labour Ministry subcommittee, the decision will proceed as planned.
Phiphat acknowledged that the wage hike comes during a period of economic slowdown but stressed that thorough analysis has been conducted. “We are aware of the economic situation, and I have instructed the permanent secretary of labour, Phairoj Chotikasatien, to ensure all decisions are based on detailed information,” Phiphat said. A study conducted in collaboration with the Social Security Office (SSO) determined that the wage increase should primarily apply to businesses or factories employing at least 200 workers.
The Labour Ministry plans to further discuss the issue with the National Economic and Social Development Board and the Ministry of Finance to ensure a smooth implementation. In response to concerns from larger businesses, the SSO will introduce a measure to provide a 1% discount on Social Security Fund (SSF) contributions for companies with more than 200 employees. This discount will be effective from next month until September 2025.
For small- and medium-sized enterprises (SMEs) employing fewer than 200 workers, the wage increase will not be mandatory. Phiphat emphasised the need to support these businesses, which account for over 90% of Thailand’s workforce. “We understand the importance of SMEs and will continue to provide assistance until the economy recovers,” he said.
The Labour Ministry is also proposing to the Finance Ministry that they reuse compensatory measures introduced in 2012 when then-Prime Minister Yingluck Shinawatra raised the minimum wage to 300 baht. Additional proposals include working with financial institutions to offer low-interest loans to businesses to help maintain liquidity and cash flow following the wage increase. Furthermore, companies that offer career training to employees may benefit from tax deductions.
Despite these plans, concerns from the business community remain. Sanga Ruangwattanakul, president of the Khao San Road Business Association, expressed apprehension about the potential repercussions of the wage hike. “This increase will have direct and indirect effects, including slower employment growth, potential layoffs, and rising costs,” he said.
Sanga urged the government to introduce tax breaks and exemptions to help the private sector weather the economic challenges. “We need to focus on sustainable solutions,” he said. “Instead of cash handouts, the government should create jobs and invest in developing workers’ skills to boost incomes.”
Government officials involved in these discussions are expected to continue working closely with stakeholders to address concerns as the October 1 deadline approaches.