Nationwide daily minimum wage to be raised to 400 baht tomorrow

Labour Minister Phiphat Ratchakitprakarn confirmed plans to raise the daily minimum wage to 400 baht nationwide starting tomorrow, September 10, despite echoing concerns that the increase could negatively impact businesses.

Phiphat announced that after discussions with business operators and a thorough study by a subcommittee from the Ministry of Labour, the decision to implement the minimum wage hike will proceed as scheduled. He stressed that the ministry had considered the economic slowdown and instructed Phairoj Chotikasatien, the permanent secretary of Labour, to assess the issue using the most comprehensive data available.

Phiphat referenced a study conducted with the Social Security Office (SSO), revealing that the new minimum wage policy should apply to companies or factories with at least 200 workers.

“This is a summary that we will have to discuss with the National Economic and Social Development Board and also the Ministry of Finance.”

To mitigate the impact on larger businesses, the SSO will offer a 1% discount on contributions to the Social Security Fund (SSF) for companies with over 200 employees, starting next month and continuing until September next year.

Meanwhile, small and medium-sized enterprises (SMEs) with fewer than 200 employees will not be required to increase wages immediately. Phiphat highlighted the importance of supporting these smaller companies, which employ over 90% of the country’s workforce until the economy recovers.

New-generation leader

Expressing confidence in the new government led by Prime Minister Paetongtarn Shinawatra, Phiphat believes that the administration, described as being led by a new-generation leader, will be capable of stimulating economic growth.

The Labour Ministry plans to propose to the Finance Ministry the reimplementation of a compensatory measure used in 2012 when then-Prime Minister Yingluck Shinawatra raised the minimum wage to 300 baht. Additionally, Phiphat mentioned the possibility of seeking cooperation from financial institutions to provide low-interest credit to businesses to help maintain liquidity and cash flow after the wage increase takes effect.

Moreover, a measure to offer tax discounts for companies that provide career training to workers is under consideration.

President of the Khao San Road Business Association, Sanga Ruangwattanakul voiced concerns over the minimum wage hike, citing potential direct and indirect effects such as reduced employment, layoffs, and increased costs. He urged the government to support the private sector through tax discounts and exemptions until the economy stabilises.

“I want the government to rethink and find a way to increase the people’s income and allow them to survive. Handing out cash is not a sustainable solution.

“The government should replace that with creating jobs and developing workers’ skills.”

As the new wage policy is set to take effect, businesses and workers alike will be closely monitoring the economic impacts and the government’s efforts to support various sectors during this transition, reported Bangkok Post.